How things have changed. Back in March 1991 (PDF), Stewart Alsop, venture capitalist and one-time editor-in-chief of InfoWorld, said, "I predict that the last mainframe will be unplugged on March 15, 1996." In 2010, while IBM doesn't break out its profits by individual server line, IBM's systems and technology group, reported 1st quarter revenue of $3.4 billion. While IBM's System z, aka mainframes, revenue fell 17%, a billion bucks or so of business still isn't anything to sneeze at.
So what happened to give the mainframe a new lease on life? In a word: Linux.
Back in February 1999, IBM announced it would work with Red Hat to support Linux. By May 2000, Linux moved from being an experiment on mainframes to being a fully supported option. And in 2001, IBM announced it was spending a billion bucks that year on Linux. It wasn't that big an expense; as Bill Zeitler, IBM's senior vice president and group executive for eServer at the time, explained, "We've recouped most of it in the first year in sales of software and systems."
Today, IBM and Linux go together like peanut butter and jelly or, if you're prefer a tech business analogy, Microsoft and Windows. IBM does it because Linux brings in billions for the companies not only on mainframes but across its server line and its consulting businesses.
Dan Frye, IBM vice president of the Linux Technology Center, said, "Back in 2000, Linux was mostly found at the edge of the IT infrastructure and we were careful to advise clients to utilize it appropriately. Today we advise our clients to use Linux confidently in the most demanding enterprise environments. Linux continues to be the world's fastest growing operating system worldwide and is used across the entire IT infrastructure including in application and data serving, business critical workloads and as the foundation for emerging delivery models such as cloud computing."
Looking ahead IBM sees Linux being used everywhere. Frye told me, "There are many growth opportunities as we continue to see Linux advance in areas aligned to client needs. In the short term, this includes virtualization, server consolidation and cloud computing. This also includes data intensive work loads such as high performance computing. Linux will also mature in the mid-market where it can reduce complexity and cost."
And, while IBM has done very well by Linux on the mainframe and its other servers, Frye isn't ruling out the desktop. Frye said, "We're seeing tremendous interest in Linux on the desktop. A recent global survey showed that Linux desktops were easier to implement than IT staff expected if they targeted the right groups of users, such as those who have moderate and predictable use of e-mail and office tools. Netbooks with Linux provide a low-cost computing option to small businesses and emerging markets around the globe. This customer set--even those that typically cannot afford new, expensive personal computers--can now legitimately consider netbooks running Linux instead of PCs for business use."
Over the years, IBM has also been very good for Linux and other Linux businesses. Historically, IBM has been one of the top contributors to the Linux kernel. And Novell has the lion's share of IBM's mainframe Linux business.
Even as Linux is getting into consumer and mobile devices everywhere, Linux still remains strong in the enterprise's old IT core. Or, as an IBM tagline would have it: "Legacy systems are systems that work!" When it comes to IBM, Linux and the mainframe, that's the gospel truth.