Warren Buffett’s Berkshire Hathaway started buying up IBM stock in 2011 and bought still more of IBM later. Despite its disappointing short-term valuation, Berkshire Hathaway is standing by its IBM investment, which is one of Berkshire’s top four plays.
You can ignore the advice of Warren Buffett if you dare, but that hasn’t always worked out well. Buffett has reportedly based his bullish outlook on IBM on its steady “cloud-resistant” mainframe business. For many firms that thrived during the internet era, mainframes don’t enter into many architecture conversations.
That is an omission some may wish to rectify. To make this case, some statistics may be needed:
- The 2015 z13 system maxes out at 10TB of client memory.
- The z13 can withstand an 8.0 earthquake.
- z Systems enjoy the highest standardized security certification (FIPS 140-2, highest level 4 of 4).
- 23 of the world’s top 25 retailers use a mainframe.
- 92 of the top 100 banks are mainframe users.
- All 10 of the top 10 insurers have commitments in mainframe technologies.
- Around 80 percent of all corporate data is managed by mainframes.
- The z13 can process 2.5 billion transactions daily (that’s 100 Cyber Mondays, as IBM’s Mark Anzani, VP of z Systems Strategy, Resilience and Ecosystems, observed).
In fact, and notwithstanding perceptions to the contrary, the mainframe’s center-stage position in large corporations around the world has not budged. That’s the conclusion of an industry survey sponsored by Syncsort Inc. and conducted in 2015 by Enterprise Systems Media, a publisher of magazines for IT managers and technical professionals. Seven out of 10 respondents (IT planners, architects and managers at global enterprises with $1 billion or more in annual revenues) ranked the use of the mainframe for large-scale transaction processing as very important.
Also in 2015, BMC released its 10th annual mainframe research report. The “comfort” experienced with a mainframe solution may not be mere sentiment. In fact, the report identified security as a central driver to mainframe growth, which is further discussed in Syncsort’s eBook: What is the Mainframe Really Doing? “This year’s report confirmed the mainframe’s continued growth is being powered by today’s digital "Always On" world and its demand for secure access to applications and data, at mobile speeds and scale. Security was the largest factor for continued investment in the mainframe with 56 percent responding that they see the security strengths of the platform as an advantage. This was followed closely by availability, as 55 percent of respondents leverage the mainframe’s availability benefits.”
In the latest quarter available (2015 Q3), IBM’s mainframe business grew 15 percent. With the sale of its x86 server business to Lenovo in 2014, IBM’s mainframe business (along with POWER) has come into sharper focus.
Costs More? Think TCO
When asked whether they contemplated using a mainframe for a green-field project, many architectures would be expected to reply, “Too costly!” True? It depends.
Analyst Eric Cothenet at Novipro works through a “non-fictional” example for an insurance implementation of Oracle Siebel CRM paired with Oracle’s DBMS. The infrastructure selected used a 204-processor Intel setup, which required the customer to purchase 204 Oracle licenses. Cothenet argues that the architects of this system could have chosen four IBM processors and saved enough on Oracle licenses to pay back the mainframe hardware premium in as little as three years.