International Business Machines Corp. (IBM) Launches New $1 Billion z13 Mainframe for ‘Mobile Digital Economy’

International Business Machines Corp. (IBM)

International Business Machines Corp. (NYSE:IBM) launched on Tuesday the z13, a new mainframe which cost the Big Blue $1 billion in investments, as well as development related research that generated 500 new patents. “This is a mainframe for the mobile digital economy,” IBM’s systems business  senior vice president Tom Rosamilia said, referring to the z13, as quoted by a blog in The New York Times.

International Business Machines Corp. (NYSE:IBM) stopped manufacturing PCs back in 2005, and it also quit making servers just last year. It seems bent, however on continuing to churn out mainframes. The z13, which took the company 5 years to build, can process 2.5 billion transactions in a day, encrypting mobile data and giving users the capability to detect fraud in real time. In a world where people are using embedded devices that interact with systems, “we need to make sure that those devices are secure, that the transaction’s secure, and that our clients get the level of analytics that gives them opportunities to improve their businesses,” IBM z Systems director John Birtles said, cited by WIRED in a report.

International Business Machines Corp. (IBM)International Business Machines Corp. (NYSE:IBM) have been grappling with declining sales figures on account of falling demand for hardware, and it reported a 15 percent slip in performance for the third quarter. Having put its last System z model in the market for the past nine quarters, revenue from that business also fell 35 percent. The latest System z model, z13, is a timely release even as the company needs to update old products that keep it in a position to sell software and services tied to the systems.

Mainframes represent a rather small portion of International Business Machines Corp. (NYSE:IBM)’s sales, only accounting for an approximate 3 percent. “The mainframe software business, though a very sturdy business for IBM, is not a growth business,” IBM Software and Systems executive vice president Steve Mills said at a tech conference in December last year,  as quoted by Bloomberg. Mainframe-related software services and storage, however, make up almost 25 percent of the company’s revenue and operating profit, according to estimates by A.M. Sacconaghi of Bernstein Research, as cited by The New York Times.

This article has been written by Nonito Guntan.

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