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IBM seeks to make the mainframe modern tech

The company must go faster and faster, with performance improvements and price cuts, just to keep mainframe technology in place and relevant in modern corporate data centers.

That campaign has been remarkably effective, defying predictions of the mainframe's demise year after year.

But now, IBM wants to go further. It is to make a series of announcements Monday introducing software tools, academic programs and support for outside developers that IBM says are intended to bring new business and new programmers to the mainframe. IBM is trying to position the mainframe for corporate customers as a "hub of Internet-based computing."

The announcements, according to analysts briefed on them in advance, signal a shift from defense to offense in the company's mainframe strategy. Last month, IBM introduced a machine priced at $100,000, about half the previous starting price for its mainframes, which can run up to several million dollars. The announcement of the low-end mainframe was made in China, which IBM regards as a promising market for the machines.

"IBM is actually trying to expand their base in the mainframe business," said John Phelps, an analyst at the technology research firm Gartner. "It's trying to attack new markets."

Many companies have made the shift from a mainframe--a single computing engine--to clusters of small server computers powered by low-cost microprocessors. Ultimately, the change can reduce expenses and provide greater flexibility. But some companies still use mainframes because the switch can be a costly, time-consuming process that involves rewriting the software used to manage businesses, like accounting and customer records.

The mainframe business, while far smaller than it was, remains crucial for IBM. Sales of the machines alone account for only about 5 percent of IBM's revenue. But all mainframe-related hardware, software and services account for a quarter of its revenue and, more important, about half of IBM's total operating profit, estimates A. M. Sacconaghi, an analyst at Sanford C. Bernstein.

The trajectory of the mainframe business depends on how it is measured. IBM points out that even though prices are falling, the use of mainframe computing--typically measured in MIPS, or millions of computing instructions per second--is growing at a healthy clip.

Competitors say most of that growth comes from a comparatively small number of big customers like banks, brokerage houses, insurance companies and some government agencies, whose growing computing needs in general require continued investment in mainframes. The number of mainframe computers in use worldwide, analysts say, is about half what it was a decade ago.

"The installed base is clearly shrinking," said Tim O'Brien, a manager in Microsoft's platform strategy group. "The reality is that the mainframe is old technology and all IBM can hope to do is to limit the bleeding."

Two years ago, Microsoft founded the Mainframe Migration Alliance, a group of technology companies that helps corporations move software applications from mainframes to smaller computers powered by low-cost microprocessors and typically running Microsoft's Windows server operating system. The group, O'Brien said, is currently working on more than 50 projects.

IBM asserts that the mainframe is often the lowest-cost technology when running many different programs because fewer people are needed to maintain a mainframe, and it consumes less power, than a cluster of many smaller machines.

The software tools IBM is introducing will enable traditional mainframe programmers and programmers skilled in modern computer languages, like Java, to write software programs tailored for the mainframe but including Internet technology. This Web services technology makes programs more flexible as individual building blocks of code will be able to communicate with others automatically. Customer records, for example, can be accessible to several different software programs, like ones for marketing, shipping and sales analysis.

IBM will offer no-cost consulting to outside software companies interested in developing offerings for the mainframe. To encourage students to acquire mainframe skills, it is visiting universities, offering expertise and suggesting course curriculums. It will sponsor "master the mainframe" contests for students.

"We are getting a next generation," said Steven A. Mills, senior vice president in charge of IBM's software business, "by adding new people and enabling other programming languages on the mainframe."

The company is working with some big customers to convince university computer science departments that mainframe programming is a skill of the future. A group from the online brokerage firm Charles Schwab and IBM spoke last month to the faculty at Arizona State University.

There is a coming shortage of mainframe software engineers, they said, as this generation reaches retirement age. "Our message was this is a skill you can acquire and still use all the modern tools," said Jeremy Lamb, vice president for mainframe services at Schwab.

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