IT Management

As a senior industry analyst and member of the press covering the IT industry, it has come to my attention that the IT department at the Federal Reserve is interested in throwing out the mainframe and replacing all that functionality with distributed computer systems. As far as I know, there’s no new workload going on the mainframe at the Federal Reserve. This is, I believe, a mistake. 

My concern is that because the reliability and the security of the System z are superior to distributed systems, the economy is being put in jeopardy by this decision. Network intrusions are a constant daily problem for distributed server environments. Security systems on distributed servers are cobbled together and individually server-based. Virus protection, Public Key Infrastructure (PKI), firewalls, and security appliances are implemented separately on each distributed server. System z provides a high level of security through RACF. 

Reliability is another issue. The System z provides five nines of reliability; 99.999 percent reliability with five minutes of downtime per year. Several banks in Germany have been running the mainframe for six years with absolutely no downtime. Downtime on distributed servers is typically 200 hours per year, per server. The server hardware is highly reliable, but unreliability occurs because of the clustered environment and integration challenges. Spikes in demand cause distributed system crashes and lack of reliability. As distributed server workload is backed off, the servers end up running at 15 percent availability; not a very efficient system. IT consolidation on System z increases efficiency and provides reliability and security. 

IT is the last large cost center that hasn’t been consolidated to achieve economies. IBM has led the way, consolidating 330 data centers onto 30 mainframes, in part because of rising electricity costs. A distributed data center costs $60 million to $90 million, and can be replaced by a $6 million mainframe. 

The Federal Reserve is a core resource for the U.S. economy and needs to run efficiently. In its role of setting monetary policy to promote employment, stable prices, and moderate longterm interest rates, it needs to have a stable, secure, cost-effective IT department. The challenge for the Federal Reserve is to provide an information processing resource that’s the best we can get, not one that’s less stable and less secure. Jeopardizing the very economic stability of the country is the central issue to be considered here. 

It is my considered recommendation that the System z be implemented by the Federal Reserve full speed ahead, with all new workloads going on the mainframe. The actual costs are far less than that of distributed servers and the available financing options are significant. Having just returned from speaking at the IMPACT 2008 event in Las Vegas, it’s clear from the buzz there that consolidation is the right direction for IT departments in general and the Fed in particular.