Dark Star Cloud Blog

Disruptive technologies

2013-05-04T16:57:00.000-04:00

Very interesting that Eric Schmidt Googles Executive Chairman acknowledges that the cloud is now what the mainframe was and still is. Aivars Lode. Avantce

http://www.mckinsey.com/insights/high_tech_telecoms_internet/disruptive_technologies

Total Cost of Epsilon E-Mail Data Breach Could Reach $225M, Including Up to $45M in Lost Business, According to New Report by CyberFactors

2013-05-02T16:55:00.000-04:00

Cost of having a data breach. Aivars Lode

Epsilon and Amazon episodes demonstrate how risk associated with cloud security issues is not being adequately addressed, company says

NEW YORK--(BUSINESS WIRE)--E-mail services firm Epsilon will face years of repercussions and up to $225 million in total costs as a result of its recent data breach, a massive event that indicates the often overlooked risk of cloud-based computing systems, according to a research report released today byCyberFactors™, a cyber risk analytics and intelligence company.

“While the attractiveness of the cloud model is hard to refute, the economics of business risk for cloud providers and their customers can no longer be ignored”

The recent breakdown of Amazon’s cloud computing services that disrupted services to popular sites like Foursquare and Quora is another example of a cloud failure that could prove extremely costly in the long run – and a hint of more troubles on the horizon, CyberFactors asserted in its CyberBrief on Epsilon.

According to research conducted by CyberFactors, the Epsilon breach may have affected 75 companies or 3% of Epsilon’s customers, not 2% as previously reported, and could eventually cost these companies as much as $412 million, for a total event cost of $637 million. Further, CyberFactors conservatively estimated the number of affected e-mails in the Epsilon breach at 60 million.

The total cost of the Epsilon breach – including forensic audits and monitoring, fines, litigation and lost business for provider and customers – could eventually run as high as $3 billion to $4 billion, according to CyberFactors, given that the compromised e-mail addresses could be used by hackers and phishers to gain access to sites that contain consumers’ personal information.

“While the attractiveness of the cloud model is hard to refute, the economics of business risk for cloud providers and their customers can no longer be ignored,” said Regina Clark, Research and Analytics Director, CyberFactors. “With the cost of technology failures rising at an accelerated rate, the Epsilon event suggests a much more profound financial risk environment is now upon us. Cloud companies would be wise to think more like banks, insurance companies and hedge funds, and not just aggregators of the world’s precious data and technology dependencies.”

Some other results of CyberFactors research on the Epsilon breach:

51% of the costs related to the Epsilon data breach will occur in year one, 42% in year two, and 7% in year three and thereafter
Loss of revenue related to customer churn as part of the Epsilon breach fallout could range from $6.1 million if just 1% of customers left, to $30.7 million if there were 5% churn.
CyberFactors research shows that since 2005, data events have cost individual affected companies in the range of $5.5 million to $12.8 million, depending on the industry and assuming no liability claims.

Ellison aims his first Oracle 'mainframe' at Big Blue

2013-03-26T15:14:00.000-04:00

Even Oracle now knows the only way forward is a mainframe class server. Aivars Lode

T5 takes the lead from Power and x86, Big Larry claims

By Timothy Prickett Morgan

Larry Ellison has launched the first mainframe-class machine that he can correctly say he made sure came to market, and now he is going to take a run at IBM's mainframe and Unix server businesses.
What's more, it looks like he will to be able to make some credible arguments as to why customers running Oracle software – and indeed any mission-critical app that runs on any Unix – will run better on the new Sparc T5 and M5 servers.
Oracle announced the new Sparc servers at an event in San Francisco today, and El Reg already gave you the feeds and speeds on the new T5 and M5 processors and their respective systems. At that event, Ellison touched on some of the salient characteristics of the new servers, but he spent most of his time explaining how Oracle would keep the pedal to the metal, pushing performance even further after taking the lead from Intel and IBM in terms of throughput-per-processor and bang-for-the-buck against IBM's Power Systems lineup.

At first blush, it seems a bit peculiar that Ellison should care so much about hardware – but maybe not.
When Ellison cofounded Oracle decades ago with Bob Miner, IBM mainframes and DEC VAXes were the main machines people used in commercial computing. And Oracle has always run its software on IBM mainframes and is well acquainted with their virtues: security, I/O throughput, reliability – and their excessive costs.
Ellison paid $7.6bn to buy Sun Microsystems a little more than three years ago to get Java and Solaris, but also to get hardware engineers who could build systems that would push back against the onslaught of IBM in the Unix space. And contrary to lots of talk, Ellison has maintained his commitment to both Sparc and x86 iron. Ellison likes to build and control his entire stack, and Sparc processors and systems let him do that.
When you are a multi-billionaire, you can indulge.
The Sparc T Series chips have more threads than any other processor out there, to be sure, but they have not been very good at raw, single-threaded, integer workloads. The situation got better with the Sparc T4, and it has apparently got quite a bit better with the Sparc T5 – and, presumably, its Sparc M5 "mainframe-class" big brother.

Oracle says it has passed IBM on integer throughput performance

"These machines deliver better integer performance than the IBM Power series," proclaimed Ellison. "The T5 microprocessor itself delivers better integer performance than IBM's PowerPC chip. Now that is really extraordinary, because IBM has had that lead for a very, very long time for integer rate performance, but that lead now moves over from IBM Power to Sparc T5.
"A lot of people are surprised by this," continued Ellison. "When Oracle bought Sun, a lot of people thought the Sparc microprocessor was a real laggard. There were a lot of people who believed that we would never catch up. Well, we have done better than catch up. We caught up, and then we passed the competition. We passed x86 and we passed IBM Power."

Larry Ellison's CPU roadmap throwdown to Intel and IBM

But, Ellison said, playing catch-up is easier than trying to go and double performance again as it has done with the Sparc T3 to T4 to T5. So what is Oracle going to do for an encore? Add database, Java, and other accelerators to its chips to make its software run faster, and free up those Sparc processor cores to do other tasks. Just like it added vector math units and encryption/decryption units to chips, Oracle is going to add database and Java accelerators.
Here's one example of a kind of database search acceleration that Oracle will cook into its processors in 2014:

Oracle is going to accelerate database functions directly on Sparcs

In this example, you want to extract a range of matching data from the database. So you load the data into main memory and the processor runs the database algorithms to make the comparisons to find matches. When you find a match, you save it, and when you don't find a match, you ignore it. The processor cores are obviously busy through this whole process. Now, etch that database search function in the chip. You drop the data you are searching for into a buffer and the database search accelerator looks through the entire database without invoking the processor at all.
"We think that this will give us a greater and greater advantage going forward," Ellison said.
It doesn't hurt that Oracle owns some of the most popular systems software in the world, so it has customers who will be eager for these accelerated functions even if they are probably getting nervous about vendor lock-in. But that said, with Oracle claiming up to a factor of 10X improvement in bang-for-the-buck versus IBM's Power Systems machines, it's already trying to claim it has a huge lead in value. The question is, can Oracle start penetrating IBM accounts, particularly those that used to be Sun accounts? That remains to be seen.
But with the kind of numbers that Ellison was throwing around at Tuesday's event, you can bet a lot more CIOs and CFOs are going to listen. Ellison claimed that the new Sparc M5-32, which has 32 sockets using six-core M5 chips and scales up to 32TB of memory in a single rack, offers three times the bang-for-the-buck compared to IBM's top-end Power 795 system, and has an order of magnitude better value-for-dollar compared to the high-end Sparc Enterprise M9000 machines from Fujitsu, which are indeed several years long in the tooth.
Of course, the real question is how the Sparc T5 machines stack up against x86 systems in terms of price/performance – and Ellison didn't have a single thing to say about that. Larry & Co. are obsessed with taking share back from Big Blue in the midrange and high-end of the Unix market. ®

For software giant Oracle, the cloud of doom

2013-03-20T15:05:00.000-04:00

The search for an enterprise solution continues. Aivars Lode

Oracle CEO Larry Ellison delivers a keynote address during the 2012 Oracle Open World conference on September 30, 2012 in San Francisco, California.

by Gigi Douban

Global software giant Oracle will release its earnings report today. In the past, the company has made its money selling traditional hardware and software to businesses and governments, including servers and database software. But experts say that while smaller startups are already staking their claim in the cloud space, Oracle is slow to follow.

Scott Pierce this year launched a cloud startup called 45000 Feet. He says one of the benefits in moving to the cloud is that a company pays only for what it needs.

"If you do only get 10 users, you're only going to pay for enough infrastructure to support those 10 users," Pierce says. "If you get 100,000, you're going to pay more but you're gonna have the ability to service those 100,000 users the way they expect to be serviced."

One mission of Pierce's company is to convince businesses that they don't need a big room full of servers, a concept that goes directly against Oracle's business model.

Krishnan Subramanian, a technology analyst, says when it comes to shifting to the cloud, Oracle is way behind its competitors, even old-timers like IBM.

"They are doing a catchup game right now and they have a long way to go before they can become a leader," Subramanian says.

Oracle declined to comment for this story.

Subramanian says for now, at least, the tech giant is bundling its cloud services so that customers also have to buy database software, which for Oracle, is still where the money is.

On Amazon, cloud service companies put themselves at risk

2013-03-12T17:47:00.000-04:00

The cloud has dangers. Aivars Lode

Analysis The power that Amazon Web Services wields over its cloud partners illustrates the new business reality brought about by pay-as-you-go rentable IT – and it's not a pretty picture.

Last week we reported on allegations made by Amazon partners that the cloud king was using its third-party ecosystem as a proving ground for products it could knock-off.

The article spurred a debate, with some reactions to it pointing out that businesses have always expanded into new fields, and that the companies we spoke with were always destined to have Amazon create low-cost derivatives of their products.

"I think for all of us entrepreneurs, it's incumbent of us to protect our assets and innovate and execute," Tom Lounibos, chief executive of Soasta, a cloud-based mobile and web application testing company and a long-time Amazon partner, told The Reg. "You live with this constant fear of someone catching up ... and that's what propels innovation."

Lounibos is unruffled because although Soasta uses AWS, his is a difficult business to clone since it depends on the use of multiple clouds. It is one of thousands of businesses that have built successful operations by using AWS's rentable resources.

But some businesses are not so lucky. They have built tools and devices for the AWS cloud itself, and are ripe for what the tech darlings term "disruption" by Amazon.

With Amazon pulling in revenues of well over $1bn a year, it's no wonder that companies are flocking to a business opportunity – however short term it might be.

These businesses will be aware that their model makes them ripe for cloning – all they do is automate some bit of business process that Amazon hasn't yet presented as a product, or they hold the hands of companies confused by Amazon's management interface or setup processes.

By participating in the AWS ecosystem, these companies help to suck more people into Amazon by making it a more attractive platform on which to develop. But they also give Bezos & Co. a form of costless research and development, which lets Amazon benefit from the hard work done by third-party companies working on its cloud.

Once a company has established a viable AWS business, then El Reg imagines some process kicks in within Amazon's HQ that sees an assessment of the technology get drawn up, then handed to some engineers to create a mock-up.

Soon, Amazon produces a low-cost derivative of the product, as has happened with the launch of products such as OpsWorks, Trusted Advisor, or the many language additions to its free PaaS Elastic Beanstalk.

This clonerama costs Amazon little, as the market research and prototyping have been done by third-party companies.

In the old days of building for operating systems – or before that, mainframes – it would take the mother-company significant amounts of time to develop its own version of a third-party's technology.

Major organizations such as IBM, Microsoft, or Oracle would have to either buy a company to effectively mimic its IP, or enter into cross-licensing agreements, as Microsoft did with DriveSpace.

What sets Amazon (and other cloud operators) apart is that owning a cloud platform gives a business a vast amount of live data about how software is being used and what makes the most money – information that was much slower to bubble up to the platform operator in the days of the mainframe or PC.

This means that cloud operators can become aware of successful third-party products very quickly, and can easily clone them because tech that services AWS must work well with Amazon's technology stack.

Cloud operators can always produce these types of business-process or ease-of-use services at a lower cost than third-parties, as they own the infrastructure on which the services are delivered.

Amazon's strategy of creating a huge ecosystem of third-party services has benefited the company by outsourcing its research and development costs, while bringing in more cloud punters.

The question El Reg thinks businesses should ask themselves is whether they want to help cement Amazon's cloud dominance.

"If you're not paying, you're the product being sold," is what people say to pooh-pooh the concerns raised by users of social networks when they complain about being served ever more ads.

Similarly, in the cloud if you're not paying for the underlying infrastructure, then you're nothing more than a trial business for the data center operator.

Every time a company yokes itself to a larger one, it puts itself at risk of being cloned – but in the past this would happen through acquisitions or cross-licensing, or the slow process of R&D on the part of the operator.

In Bezos's big yellow cloud, the chances of a company being bought or partnered with are slight when compared to the likelihood of it suddenly finding itself competing with a derivative product. (Even if the company is a partner and has paid Amazon for advance briefings, it will typically get no advance information on the competitive product.)

All users of AWS exist in an ecosystem defined by Bezos & Co, so companies should think carefully before linking themselves closely with Amazon itself. If they do, they may find themselves in a business race that they cannot win. ®

Microsoft's Azure service hit by expired SSL certificate

2013-02-23T15:57:00.000-05:00

Azure clearly not Enterprise class. Aivars Lode

Company also reported service problems with Xbox Music and Video Store services

By John Ribeiro

Microsoft's Azure cloud platform suffered a worldwide outage in its storage services from Friday afternoon because of an expired SSL (secure sockets layer) certificate.

The company also reported problems with its Xbox Music and Video Store services.

The service problems come on a day the company said it was recently a victim of a cyberattack similar to ones that targeted Apple and Facebook.

"Beginning Friday, February 22 at 12:44 PM PST, Storage experienced a worldwide outage impacting HTTPS operations (SSL traffic) due to an expired certificate," Microsoft said on its Windows Azure service dashboard. HTTP traffic was not impacted, the company said. It said it executed steps to update the SSL certificate and expected HTTPS traffic to notice gradual recovery in many sub-regions.

Hypertext Transfer Protocol Secure, a combination of the HTTP and SSL/TLS protocols, is an Internet communications protocol for secure network communications.

"Further updates will be published to keep you apprised of the situation. We apologize for any inconvenience this causes our customers," the company said.

Microsoft also reported problems in its Xbox Music and Video services. It said users may be unable to browse, stream, download, or buy things at the Xbox Music and Video Store, also known as "Zune Marketplace." The company did not trace a connection between the Azure storage outage and the Xbox service problems.

The company said early morning on Saturday on the Xbox support site that it is working with its team of engineers "to get those jams back online and streaming properly." The company earlier reported that users were experiencing issues accessing content in Xbox Music and Video, and said, "know that we are aware of the issue and actively engaged working toward a fix to bring you back those sweet tunes !"

Microsoft also had a serious problem in its Azure service last February.

By Saturday, the company reported that Xbox Music and Video Store were "up and running." It also said on its Windows Azure service dashboard that it had "executed repair steps to update SSL certificate on the impacted clusters," and had recovered to over 99 percent availability across all sub-regions, but warned customers of intermittent failures for the next 24 hours. "We will continue monitoring the health of the Storage service and SSL traffic for the next 24 hrs," it said.

The company has not disclosed what led to the expired SSL certificate or the service problems on Xbox Music and Video Stores. Microsoft could not be immediately reached for comment

Tech Titans Clash in 'Cloud'

2013-02-03T15:54:00.000-05:00

The popular solutions are focused on the small start ups vs the enterprise customers. Aivars Lode

Microsoft and Google are increasingly trying to unseat Amazon in the lucrative business of renting out computing storage and number-crunching to thousands of companies.

Amazon dominates the market through its Amazon Web Services business, or AWS, which helps companies handle digital tasks, such as streaming Netflix Inc. movies over the Internet, and analyzing auto-accident records at insurance consultant Validus.

Now Amazon is trying to sell AWS to many of the big companies that are Microsoft's bread-and-butter, while Microsoft and Google are seeking to skim off the startups that have been AWS's best customers.

Along the way, the trio are poaching each other's employees, slashing prices, talking trash and upending long-held strategies to control one of the fastest-growing areas of technology, known as "cloud services."

"The great tech wars are expanding into nearly every area of business, and cloud services are the latest battlefield," said Bill Coughran, formerly Google's senior vice president of engineering and now a venture capitalist at Sequoia Capital. "Amazon has captured the hearts and minds of developers, but Google and Microsoft are gaining ground."

Firebase, a San Francisco software startup, has benefited from the battle. When Firebase got off the ground, Amazon offered it a $12,000 service credit for AWS. Another competitor, Rackspace Hosting Inc., offered $36,000 in free service. Firebase also got offers from Microsoft and Amazon through one of its investors, New Enterprise Associates, if it and other NEA-backed companies chose their cloud services.

James Tamplin, Firebase's co-founder, said his company opted for AWS "largely because Amazon has a more advanced infrastructure."

Firebase now pays Amazon monthly so when people surf to Firebase's Web services, it is AWS computers—and not Firebase's own—handling the load. Mr. Tamplin declined to disclose what he is paying for AWS. But consulting firm McKinsey & Co. last fall calculated a small computer server would cost a company an average of $31.55 a month to buy and maintain, while a comparable amount of cloud service from AWS or others costs an average of $16.06 a month.

Amazon, Microsoft and Google don't disclose revenue from their cloud products, but research firm IDC estimates "public cloud" services are among the fastest-growing areas of information technology, with a total market size of $40 billion last year.

Amazon has a roughly 70% share of the slice of public-cloud market for renting computing capacity and data crunching, Forrester Research estimates. AWS generates $2 billion or more in annual revenue from these services, according to Wall Street estimates.

There is more than money at stake. With cloud services, Amazon, Microsoft and Google are also vying to win the loyalty of software developers, and lock in companies to sell them more services over time.

For years, Amazon was largely unchallenged in the cloud market after launching AWS in 2006, giving it a chance to build a lead in an emerging market. AWS's rise also was aided by a boom of tech startups like Zynga Inc., which found it cheaper and simpler to let Amazon manage the software and servers their businesses needed to operate.

Last summer, however, the cloud war heated up. In June, Microsoft overhauled its cloud services, called Windows Azure, and added more bite-sized offerings similar to AWS, such as the ability to rent more flexible "virtual" computers that squeeze out extra computing horsepower on the cheap.

That same month, Google, which had previously dabbled in the cloud services market, unveiled an offering called Google Compute Engine to allow companies to run their Web applications on computers managed by the Internet-search giant.

The companies immediately began battling in pricing. Within roughly one week last fall, Google announced it was dropping prices on its computing-storage by about 20%, to a starting price of 9.5 cents a month for each gigabyte. Amazon quickly matched Google's lowered starting price, prompting Google to announce a further price cut to a starting monthly price of 8.5 cents per gigabyte.

Microsoft followed a few days later by announcing it was slashing Azure costs to similar levels of its two rivals. Amazon said it has cut prices for AWS services 25 times in its history.

For its part, Google is leaning on its résumé. "Our offering takes all the infrastructure we developed over the past 14 years that runs Google, YouTube...and we just make it available to others," says Shailesh Rao, who runs Google's "cloud platform" group.

Amazon, Google and Microsoft also are poaching employees from one another, leading to lawsuits. In October, Amazon sued to stop former AWS senior executive Daniel Powers from working at Google's cloud business. In December, a federal court in Seattle barred Mr. Powers until March from helping Google use his confidential knowledge of Amazon to pitch current, former or potential AWS customers.

Google, Amazon and Mr. Powers declined to comment on the litigation. A judge has scheduled a trial date for November.

Amazon also has hired more sales people and warmed to selling the service through corporate-technology "resellers," a conduit to big businesses. Amazon in November announced a new "premier" designation with 15 resellers that it blessed to sell AWS to corporations.

Amazon "recognizes now that they have to start catering to the enterprise," said Nand Mulchandani, CEO of ScaleXtreme Inc., which helps companies manage and use AWS.

Microsoft meanwhile has stepped up its courting of tech startups—typically AWS's sweet spot—for Azure. Satya Nadella, the Microsoft president in charge of the Azure business, takes regular trips to Silicon Valley to learn from venture capitalists and tech entrepreneurs how to make Azure better for them, and for bigger businesses that will have similar needs.

In a move controversial inside of Microsoft, Azure last June made it easier for developers to use the service with computer-programming languages that are popular with startups but that were long seen as a threat to Microsoft. At an Azure event last June in San Francisco, Microsoft also moved an executive presentation to 1 p.m. from 9 a.m. to accommodate night-owl startup workers.

"A lot of those (startup) companies will grow up to be very big businesses," said Bill Laing, Microsoft corporate vice president for server and cloud. Startups "are not encumbered with legacy; they tend to experiment and try things out."

Microsoft officials and some corporate-tech buyers said Amazon is underestimating the difficulty of selling tech services to big businesses, which often want years-ahead peeks at product changes, specialized services and reliable customer support.

"Amazon is nowhere near ready for this battle in the enterprise," said Bill Hilf, general manager of product management for Microsoft's Azure.

Adam Selipsky, vice president of marketing for AWS, said AWS doesn't discuss the competition, but added that "traditional technology companies" have conflicting businesses that make them incapable of giving customers honest advice about cloud services.

Amazon Outage Could Cost a Lot More Than 400,000 Pairs of Unsold Underwear

2013-02-01T15:51:00.000-05:00

Amazon still not enterprise class technology environment. Aivars Lode

Imagine the front doors suddenly locked on every Walmart in the country simultaneously right in the middle of the business day — and for nearly an hour, no one could find the keys.
That’s basically what happened to Amazon when, in an incredibly rare hiccup, its homepage went down for nearly an hour Thursday afternoon.
Pundits and investors have been chattering all week about the resilience of Amazon’s share price despite ending 2012 in the red. I pointed out in an earlier post that Amazon’s sales are growing at a faster clip year-over-year than Walmart’s during the big-box giant’s ascendancy in the 1990s.
So when that sales engine grinds to a halt, that’s a lot more money lost than it used to be.
Amazon’s net sales for 2012 came in at $61.09 billion, a tripling over the past five years. That comes to an average of $116,229.07 in sales every minute. Amazon says its homepage was down for 49 minutes, which puts the total sales missed at nearly $5.7 million.
(For the sake of this thought experiment, I’m setting aside the fact that Amazon’s product pages still appeared to be accessible during the homepage crash, which means purchases could presumably still go through.)
In terms of actual stuff not sold, $5.7 million means:
28,643 base-level Kindle Fire HDs (top-selling item, electronics)
428,893 pairs of ExOfficio Men’s Give-N-Go Boxer Briefs (top-selling item, clothing)
95,015 Maverick ET732 Long Range Wireless Dual 2 Probe BBQ Smoker Meat Thermometer Sets(top-selling item, patio, lawn and garden)
251,878 Angel Soft toilet paper 48-packs (top-selling item, health and personal care)
695,970 emergency mylar thermal blanket 10-packs (top-selling item, industrial and scientific)
So much stuff, but such a seemingly inconsequential amount for Amazon, like when a professional athlete gets fined more than $10,000 for wearing his socks wrong. But considering Amazon finished the year with a $39 million loss, just a few hours of lost sales starts to look like the difference between red and black. When your success as a company depends on skating by on razor-thin margins — and on the tolerance of shareholders for those margins — every million counts.
What’s more, reliability is a cornerstone of the Amazon brand. When you pay for two-day shipping, you expect to get your order in two days. When you sign up with Amazon as a third-party shipper, you expect them to keep track of your stuff and deliver it to the people who order it. Perhaps most tellingly in light of the homepage crash, when you build your website on top of Amazon Web Services, you expect your site to stay up. Amazon says yesterday’s outage didn’t affect AWS, which itself fails on a somewhat regular basis. But when Amazon can’t keep its own front door open, even if just for the length of a lunch break, the damage to its image could end up costing millions more.

Unisys watches ClearPath mainframe sales climb

2013-01-30T15:41:00.000-05:00

Companies are realizing that enterprise class requires a mainframe. Aivars Lode

The latest line of ClearPath mainframes from Unisys, launched in October and based on Intel's latest Xeon E5 processors, sold a bit better than expected in the final quarter of last year.

A mainframe selling better than expected is news by definition, and good news for Unisys in particular since the company's top brass has turned the company around in the past four years – and managed to do so during the Great Recession.

However, ongoing issues in the services business weighed Unisys down in the quarter ended in December, much as they had done through 2012. Some challenges were related to the company's dependence on Uncle Sam, some to larger macroeconomic issues, and some to Unisys' own execution in peddling outsourcing, systems integration, and other services.

As he has many times, CEO Ed Coleman explained when reviewing the quarterly report on a call with Wall Street analysts that the ClearPath mainframe business is best judged on an annual basis, not quarterly, given the ups and downs of the mainframe biz, which has its swings much like IBM's System z mainframes and other high-performance supercomputer items with big price tags.

Coleman said that during the quarter there was a big bump in ClearPath sales that closed earlier than expected, and that Unisys mainframes had sold better than it expected in the past three years.

The goal when Coleman took the helm was to just keep ClearPath sales steady year-on-year, but instead the company has been able to actually grow sales. This may not seem like a big deal, but the combination of increased mainframe sales and cost-cutting is a big reason why Unisys has largely climbed out of its pit of debt.

In the December quarter, the company's Technology division posted sales of $173.6m, up 15.7 per cent, while services revenues tallied up to $805.7m, down 3.5 per cent. Total revenues were $979.3m, down six-tenths of a point.

The revenue decline would not have been a big deal at all – other IT suppliers are having similar problems in services, IBM in particular – but unlike its larger mainframe rival, Unisys is not able to squeeze more blood from its stones. And thus profits fell 13.2 per cent to $81.8m. Some of that hit has to do with higher running costs, but the increased costs of getting those new ClearPath mainframes out the door also impacted profits.

Enterprise software and services accounted for $160m in revenues in the fourth quarter, up 13 per cent, and other technology (including resale of disk arrays, among other things) rose by 52 per cent to $14m. Gross margins were up 6.2 points in the quarter to 68.1 per cent, which helped the bottom line considerably. For the full year, the Technology division had sales of $514m, up 3 per cent, with enterprise software and services accounting for $480m of that and rising 8 per cent, and other technology making up the remaining $34m and falling 34 per cent.

Within the Services division, gross margins were essentially flat across all services, which is a bit of an accomplishment considering the issues that Unisys is managing after not getting renewals on some big government contracts and chasing new business outside of the District of Columbia.

The systems integration business was down 4 per cent in the fourth quarter to $278m, and IT outsourcing fell by the same amount to $298m. CFO Janet Haugen said on the call that the company had a goal of growing these two businesses at "market rates" in the coming years, and is working to make that happen.

According to the latest numbers from Gartner, the global IT services business rose by 1.8 per cent in 2012 to $881bn and was projected to grow by 5.2 per cent this year to hit $927bn. Data center systems sales (including servers, switching, storage, and operating systems) rose by only 2.9 per cent last year to $627bn, so Unisys is already beating the market here.

That said, the systems racket is expected to grow by 6.3 per cent in 2013 to $666bn, so Unisys has some iron to push to keep pace.

Core maintenance services (covering Unisys hardware and software) were $51m in the quarter, up 3 per cent, and business process outsourcing sales were $67m, up 6 per cent. Infrastructure services, however, fell 9 per cent to $112m.

For all of 2012, Unisys' services business was down 5 per cent to $3.19bn, and operating margins were off a half-point. The declines in the core systems integration and IT outsourcing businesses are slowing, and the question is whether or not Unisys can reverse the declines entirely and get on with the growing.

There's good reason to believe that it can, with services revenues up 2 per cent in North America – if you take the effect of the US Federal government out of the numbers. Uncle Sam accounted for 14 per cent of all revenues, including technology and services, in 2012. It is a tough situation when your largest customer has huge budget issues.

For the full year in 2012, Unisys had $3.71bn in sales, down 3.8 per cent, and net income was up 7.4 per cent to $129.4m.

To help pump up future sales, Unisys plans to build a channel for its products. Coleman said that Unisys set up a channel for peddling its Stealth system security and virtualization technologies last year, and is now planning to expand its channel to cover other products. He did not elaborate further, but it is possible that Unisys could try to peddle low-end ClearPath mainframe through the channel, provided the numbers work out and channel partners can put more feet on the street than can Unisys itself.

Unisys will also emphasize the fact that its Xeon-based ClearPath mainframes can run Windows or Linux, and boost sales of these operating systems and related software stacks on top of them. Unlike IBM, which has a mix of mainframe, Power, and x86 processors across its system lineup and seems content to keep it that way, the Unisys "ClearPath Forward" plan calls for the company to move all of its mainframes to Xeon E5 iron.

This effort should be done in a matter of years, at which time ClearPath mainframes should get considerably less expensive to build. It is hard to say if profits will expand or if the difference will just be eaten up in improvements in bang-for-the-buck that mainframe shops expect.

We'll know when we see the company's 2015 or 2016 financials. ®

IBM continues to squeeze blue blood from IT stones

2013-01-23T15:48:00.000-05:00

As we have said numerous times in the past, the only enterprise scale computing environment is the mainframe. Aivars Lode

Mainframe boost more than covers power dive.

As has been the case for so many quarters that it has become normal, IBM has managed to boost its profits even as its revenues were down a smidgen in the fourth quarter ended in December.

Sales across IBM's vast portfolio of IT hard and softwares was off six-tenths of a point, to $29.3bn. But thanks to Big Blue's constant restructuring and penny pinching and a shift to higher margin systems, software, and services – particularly in growth markets – the company was able to wring $5.83bn in net income out of the company, an increase of 6.3 per cent compared to the year ago period.

In a conference call with Wall Street analysts after the markets closed on Tuesday, IBM CFO Mark Loughridge attributed the stabilization of revenues and the increase in profits to a rebound in System z mainframe sales and the steady growth in software sales both related directly to IBM system software as well as running on competitive gear or further up the stack.

IBM does not report its server revenues in dollar amounts, but Loughridge did say that System z mainframe sales spiked 56 per cent in the final quarter of 2012. He added that that the aggregate amount of processing capacity shipped, as measured in aggregate MIPS (that's millions of instructions per second, and only loosely based on actual instruction-chewing capacity relative to prior mainframes), had risen by 66 per cent in the quarter, which was the biggest bump in capacity in the history of IBM's mainframe line.

Of course, that is probably a more accurate measure of how weak demand was for the System z11 machines, which came out in the summer of 2010 and which were a bit long in the tooth by last summer when the high-end Enterprise Class variants of the System z12 machines debuted.

Specialty mainframe engines, which are what IBM calls a regular mainframe engine that is only allowed to run Linux or algorithsm that accelerate Java or DB2 rather than the full-on z/OS mainframe operating system and which has a substantially lower price (like 75 to 80 per cent lower), accounted for about half of the MIPS shipped in the December quarter.

Mainframe growth was higher in the 30 growth markets where mainframes are not common, rising 65 per cent year-on-year, versus the 50 per cent revenue growth in the established markets of North America, Western Europe, Japan, and so on. This may be more of a reflection of the relative strength of the economies, of course, and not because mainframes are winning more server beauty contests.

IBM's Power Systems line, which has only just begun its transition to eight-core Power7+ processors, took it on the chin a bit, with revenues dropping 19 per cent compared to a year ago. Loughridge said that IBM nonetheless did 350 competitive replacements of Unix boxes from Oracle and Hewlett-Packard and that these deals brought in over $335m in hardware, software, and services revenues.

The rest of the Power Systems line will come out during the first half of 2013, according to Loughridge, and volumes for the already-launched Power7+ machines will start ramping in the second quarter. Whether IBM can get revenues back on track, given the competitive pressures from x86 iron based on Intel and Advanced Micro Devices chips, neither of which are slouches, remains to be seen.

IBM's System x and BladeCenter server business was off 2 per cent in the quarter, and its tape and disk storage businesses fell by 5 per cent. Disk sales were flat, and it was tape that took the dive. Loughridge added that the high-end DS8870 array that started shipping in October was sold out in Q4. IBM's external chip sales were up 4 per cent.

Add it all up, the Systems and Technology Group had $5.76bn in sales, down seven-tenths of a per cent. But if you back out the Retail Store Systems revenues that were in the year-ago period and that are no longer on the books because Big Blue sold that biz to Toshiba last year, then IBM's server, storage, and chip unit posted a 4 per cent revenue gain. Pretax income was up 23.2 per cent to $974m. Mainframes were pulling their weight for the first time in about a year or so.

Services: lots of heat but not enough light

The Global Services behemoth, which is the cornerstone of the Louis Gerstner era of IBM two decades ago and that largely saved IBM from itself if not oblivion, continues to generate a lot of revenues but not enough profits considering how many people it takes to provide services.

Global Services had just a hair over $15bn in revenues in the December quarter, down 2.1 per cent, which was the bad news. But the services backlog was up by $1bn at constant currency (flat as reported) to $140bn. Margins were expanding as Big Blue was rejiggering some low-margin deals and chasing higher margin services, such as "smarter planet" and big data engagements.

IBM's system outsourcing business generated just over $6bn in sales (down 3 per cent), while maintenance on hardware and software brought in $1.8bn (down 2 per cent). Application and process outsourcing, brought in a little more than $1bn (down 4 points), while consulting and systems integration raked in $3.6bn (down 3 per cent).

Integrated Technology Services, which even IBM cannot explain well, accounted for the remaining $2.55bn and was up 2 percent. (El Reg is no longer interested in the fake distinction between the Global Technology Services and Global Business Services divisions of IBM Global Services.

What you need to know is that the combined units as one beast had $2.8bn in pretax income, which was up 3.5 per cent. There's that margin expansion, and Loughridge said to expect more as 2013 keeps rolling.

Software Group is the real profit engine at Big Blue – and is about half useless without its systems business, but don't tell anyone. IBM's software biz has the steady monthly rental of mainframe software as its foundation, and on that builds the popularity of WebSphere middleware and the use of DB2, Lotus, and Rational wares by many shops on their systems, whether or not they have the IBM logo on them.

Big Blue has also done $12bn in acquisitions in the past decade, and this is what has helped transform Software Group from a $2.4bn business in 2000 to a $25.4bn in 2012.

Anyway, the take at Software Group was $7.92bn in the fourth quarter, up 3.5 per cent. Operating systems, which includes IBM's own z/OS, AIX, and IBM i as well as resold Linux and Windows, accounted for $709m in the quarter, flat from the year-ago quarter.

The key branded middleware that spans multiple platforms – WebSphere middleware; DB2, Informix, and other databases; Tivoli security, storage, and systems management tools; Lotus groupware and now social media software; and Rational development tools – accounted for $5.5bn in sales in the quarter, up 5 per cent.

WebSphere grew 11 per cent, Rational was up 12 per cent, and Lotus managed 9 per cent growth. The other middleware software – mostly all that stuff running on mainframes and some AIX and IBM i stuff – added up to $1.2bn. Software Group had a pretax income of $4bn.

This is considerably more than Systems and Technology Group and Global Services added together. But again, these distinctions are mostly arbitrary. The much more interesting set of numbers to see would be sales where companies buy the whole stack of hardware, software, and services from Big Blue and how that has changed and what kind of margin there is compared to those who buy only some part of their IT system from the company.

For the full year, IBM's sales were down 2.3 per cent to $104.5bn, but net income rose 4.7 per cent to $16.6bn. IBM generated $18.2bn in free cash flow in all of 2012 and spent $18bn on acquisitions, share repurchases, and dividends.

The company had $11.1bn in cash as the year ended, had $8.8bn in debts not related to its Global Financing asset portfolio, and says that its pensions are well funded and it is on its way to generate at least $16.70 in operating earnings per share in 2013. IBM did not forecast revenues, as it has not done for years. And that is because IBM doesn't care about revenues so long as profits are growing and it is moving from low-margin to high-margin businesses. ®

Protecting information in the cloud

2013-01-13T15:40:00.000-05:00

IT and business executives need to apply a risk-management approach that balances economic value against risks.

The use of highly scaled, shared, and automated IT platforms—known as cloud computing—is growing rapidly. Adopters are driven by the prospects of increasing agility and gaining access to more computing resources for less money. Large institutions are building and managing private-cloud environments internally (and, in some cases, procuring access to external public clouds) for basic infrastructure services, development platforms, and whole applications. Smaller businesses are primarily buying public-cloud offerings, as they generally lack the scale to set up their own clouds.

As attractive as cloud environments can be, they also come with new types of risks. Executives are asking whether external providers can protect sensitive data and also ensure compliance with regulations about where certain data can be stored and who can access the data. CIOs and CROs are also asking whether building private clouds creates a single point of vulnerability by aggregating many different types of sensitive data onto a single platform.

Blanket refusals to make use of private- or public-cloud capabilities leave too much value on the table from savings and improved flexibility. Large institutions, which have many types of sensitive information to protect and many cloud solutions to choose from, must balance potential benefits against, for instance, risks of breaches of data confidentiality, identity and access integrity, and system availability.

Critical Ruby On Rails Issue Threatens 240,000 Websites

2013-01-09T15:43:00.000-05:00

Ruby on Rails vulnerabilities for every site built using the product. Clearly not enterprise class. Aivars Lode

All versions of the open source Ruby on Rails Web application framework released in the past six years have a critical vulnerability that an attacker could exploit to execute arbitrary code, steal information from databases and crash servers. As a result, all Ruby users should immediately upgrade to a newly released, patched version of the software.

That warning was sounded Tuesday in a Google Groups post made by Aaron Patterson, a key Ruby programmer. "Due to the critical nature of this vulnerability, and the fact that portions of it have been disclosed publicly, all users running an affected release should either upgrade or use one of the work arounds immediately," he wrote. The patched versions of Ruby on Rails (RoR) are 3.2.11, 3.1.10, 3.0.19 and 2.3.15.

[ A successful crimeware toolkit author is going on a shopping spree. See Blackhole Botnet Creator Buys Up Zero Day Exploits. ]As a result, more than 240,000 websites that use Ruby on Rails Web applications are at risk of being exploited by attackers.High-profile websites that employ the software include Basecamp, Github, Hulu, Pitchfork, Scribd and Twitter.

Ben Murphy, a developer who helped to confirm the vulnerability, described the underlying flaw as "quite bad" to Ars Technica. "An attack can send a request to any Ruby on Rails sever and then execute arbitrary commands. Even though it's complex, it's reliable, so it will work 100% of the time," he said.

In a website post, Murphy further noted that the vulnerability affects "any rails version for the last 6 years," and said he'd written -- but not released -- proof-of-concept attacks that work for "Rails 3.x and Rails 2.x on Ruby 1.9.3, Ruby 1.9.2 and Ruby 1.8.7 and there is no reason to believe this wouldn't work on any Ruby/Rails combination since when the bug has been introduced." In addition, he said, "the exploit does not depend on code the user has written and will work with a new rails application without any controllers."

What's the exact nature of the vulnerability? "The summary is that the XML processor in RoR can be tricked into decoding the request as a YAML document or as a Ruby Symbol, both of which can expose the application to remote code execution or SQL injection," said HD Moore, the creator of the open source penetration testing toolkit Metasploit, in a blog post. (YAML is a human-readable data serialization format.)

"These kinds of bugs are close to my heart, as Metasploit itself is written in Ruby, and we use Ruby on Rails within the Metasploit Community, Express and Pro user interfaces," he said. But he noted that all versions of Metasploit have now been updated with a workaround to protect them against the vulnerability.

While security researchers haven't published a working, proof-of-concept exploit, many people are now hard at work studying both the vulnerability as well as techniques for exploiting it. "If this pans out, this would put thousands of production websites at risk of remote compromise," said Moore.

Vulnerability-wise, it hasn't been a good month for Ruby on Rails. Last week, the team behind the framework warned that all current versions of Rails were vulnerable to a SQL injection flaw. They simultaneously released updated versions of the framework that patched the flaw.

Whether it's for monetary gain, revenge or embarrassment, hackers want your organization's data, and they will stop at almost nothing to get it. In the How Attackers Find And Exploit Database Vulnerabilities report, we look at the vulnerabilities attackers target, how they get in and what they do once they get there. More importantly, we recommend how to close those holes and establish a layered security approach that includes products, processes and constant vigilance. (Free registration required.)

Gartner: Amazon Web Services, HP Have Worst Cloud IaaS Service Level Agreements.

2012-12-20T15:46:00.000-05:00

Clearly not enterprise grade. Aivars Lode

Gartner analyst Lydia Leong sharply attacked cloud IaaS (Infrastructure as as Service) service level agreements (SLAs) as being potentially "meaningless."

She called out Amazon Web Services to have the "worst SLA of any major cloud IaaS provider" and HP as a potentially worse example.

According to Leong, the problem with the SLAs provided by these companies is not just that they are very complex, but that that they are not defined in terms of instance availability, or in terms of availability zones, but in terms of region availability.

"In the AWS case, a region is considered unavailable if you’re running instances in at least two AZs (availability zones) within that region, and in both of those AZs, your instances have no external network connectivity and you can’t launch instances in that AZ that do; this is metered in five-minute intervals," Leong said. "In the HP case, a region is considered unavailable if an instance within that region can’t respond to API or network requests, you are currently running in at least two AZs, and you cannot launch a replacement instance in any AZ within that region; the downtime clock doesn’t start ticking until there’s more than 6 minutes of unavailability."

This strategy would result in an environment that does not provide customers a reasonable giveback on cost paid for the cloud services.

"Amazon’s SLA gives enterprises heartburn," Leong wrote. "HP had the opportunity to do significantly better here, and hasn’t. To me, it’s a toss-up which SLA is worse. HP has a monthly credit period and an easier claim process, but I think that’s totally offset by HP essentially defining an outage as something impacting every AZ in a region." In an update, Leong provided some explanations provided by HP, but stated that the "nuances" in HP's SLA make the HP SLA only "slightly better than the AWS SLA."

The Philosophy Behind Amazon Web Services’ Cloud Strategy

2012-12-02T20:51:00.000-05:00

Pity Amazons EC2 is not based on an enterprise platform. Aivars Lode

On stage at AWS re:Invent last week, CTO Werner Vogels discussed Amazon Web Services’ cloud philosophy, increasingly driven by a belief in building architecture that is cost-aware and designed to optimize economies of scale so it can do volume transactions at thin margins.

The talk, a first-day keynote with Senior Vice President Andy Jassy, predicated the group’s belief in a programmable infrastructure that has more instance types and object storage than any public cloud services provider. For example, Frederic Lardinois wrote about AWS introduction of a “Cluster High Memory” instance type that will offer a massive 240 GB of RAM and two 120 GB SSDs. Jassy also unveiled a “High Storage” instance focused on storage and will come with 117 GB of RAM and 24 hard drives for a total of 48 terabytes of HDD space.

The two keynotes illustrated AWS’s view on cloud computing, which differs from enterprise vendors that have focused on selling hardware to customers for “private clouds.” It was the first time AWS has stated so clearly how it views cloud computing and its competitors, which they say have been “cloudwashing” customers into believing that their costly solutions are better than the rest.

AWS, through its programmable architecture, has built a $1.5 billion business on volume and thin-as-possible margins. The group has dropped pricing 23 times since 2006, including an approximate 25 percent cut that Jassy announced during his keynote. He attributed the drop in price to what he called a virtuous lifecycle.

On Thursday, Vogels showed how a business-driven infrastructure gives customers their own ability to develop businesses that are data driven and optimized to make their operations so tight that they can also operate on low margins.

Vogels explained how an architecture can adapt to changing business needs based on automated practices that use data to analyze and then program instances that auto-scale with expected increases or decreases in demand.

He described it as “cost aware architecture,” meaning that the infrastructure drives application development, as opposed to the other way around. Embodied in this is the increasing requirement for the applications to be controllable, resilient, adaptive and data driven.

Amazon.com started AWS because they needed more infrastructure in order for the business to scale. They also needed a better way to handle the fluctuations that would come when they had ups and downs in web traffic.

Customers will often have to estimate physical storage, for instance, based on the workloads of virtual machines. It’s a constrained method that gives little room for scaling without adding more machines that require manual intervention. Often, it’s purely guesswork.

Vogels reiterated that customers need to stop thinking of physical resources and focus on automation. He described how AWS has built an infrastructure that allows customers to build in small decomposable blocks that can be decoupled from the infrastructure. Vogels used IMDb as an example. Amazon had to scale the movie site as Amazon traffic increased. If Amazon went up, IMDb had to go up. After making changes to the architecture, AWS could loose couple the HTML code on S3 so if Amazon scaled up, IMDb wouldn’t have to.

AWS now offers this idea of hypothesis-driven development that gives customers a combination of instances, spot instances and reserved instances to keep the application optimized based upon its workload. Instances are the standard. Spot instances allow customers to make bids for the best price possible at the time. A reserved instance is a pay-in-advance service that sets a price at a lower rate than what the standard instance costs.

Pinterest has adapted its infrastructure to correspond with traffic loads. Ryan Park, Pinterest’s technical operations lead, said on stage that they have automated their systems to shut down 20 percent after hours. This reduces the cost when traffic is less. They use reserved instances for the standard traffic and then do on-demand and spot instances to handle the elastic load throughout the day. Since building this cost optimized infrastructure their costs have gone from $54 per hour to $20 per hour.

Vogels said this in a blog post this week:

The most important concept is that, when you are growing, your cost should grow over the same dimension your revenue is coming in over. For Amazon.com that dimension is number of orders. If orders go up your cost should be allowed to rise as well. Although if you are architected well, you will be able to exploit economies of scale and your cost will rise less than the rise of your revenue. If you are architected correctly for cost-awareness scale becomes your friend.

That sums up the AWS cloud philosophy. It reflects the group’s past and its future. AWS’s experiences taught the group what services to offer customers. The group learned early that to succeed, it needed systems that can adapt to business needs. It’s not about how much capacity a customer has available. It’s about building an infrastructure for the business and its natural ups and downs.

(Another hat tip to Aaron Delp for his detailed live blog of the AWS keynotes. His notes helped put the pieces together for this post.)

Shoring Up the Unbanked in the Philippines

2012-11-23T12:06:00.000-05:00

Rizal Commercial Banking Corporation (RCBC), one of the leading private domestic commercial banks in thePhilippines, has grown rapidly over the last five years. To continue this momentum, we’ve set a goal of adding 10 million new customers by 2014. Many of these will include the so-called “unbanked” – farmers, small business owners and others in provinces of the Philippines where ATMs and bank branches are more scarce.

Technology and the transformation of our business model will be two of the most important drivers behind RCBC’s ability to bring banking to the masses.

Traditional banking technology and business models were developed around the characteristics of urban areas: high density of clients, relative proximity to cash distribution centers and the availability of a telecommunications infrastructure, for example.

Not surprisingly, the economics of these models are not appropriate for serving clients in rural areas. Technology, however, has enabled new ways to interact with rural clients at significantly lower cost levels.

RCBC is teaming with IBM and Finacle from Infosys to transform our business and leverage new growth opportunities in an increasingly competitive consumer banking market. A new Finacle, IBM System z solution will provide the foundation RCBC needs to create value-added services that will increase customer adoption for our MyWallet electronic cash, debit and pre-paid cards, which gives the unbanked a great tool to conduct cashless transactions from their mobile devices or anywhere Visa cards are accepted.

The bank is targeting to grow our MyWallet card base by 4 million this year – more than doubling the 1.8 million users on-boarded last year. Among our initiatives to reach that goal are more partnerships with merchants that will lead to increased consumer acceptability and usage. The bank has already forged tie-ups with the Super 8 Grocery Warehouse chain, Enchanted Kingdom in Laguna, LBC Express Inc. and Mercury Drug. We plan more such partnerships in the months ahead.

RCBC also recently introduced a business loan program for small and medium sized enterprises (SMEs) called the Women’s Enterprise Loan developed specifically to address the needs of Filipina entrepreneurs. It’s one way the bank is responding to the government’s call to help empower local entrepreneurs through improved access to credit.

Since we re-launched it four years ago, RCBC’s SME Banking has expanded its portfolio by over three times to its present level of about P $15 billion. We are planning to expand total credits to this market to P $20 billion in the next 12 months.

RCBC is now positioned as a smarter bank, able to anticipate client needs and deliver innovative products to the unbanked and all our clients faster and more consistently than the competition. We are able to respond quickly and nimbly to changes in market conditions.

Easy to use, virus free, secure: Aaah, how I miss my MAINFRAME

2012-11-16T20:34:00.000-05:00

Ah reminiscing the days of central mainframe control. Aivars Lode

Mention mainframe computers today and most people will conjure an image of something like an early analogue synthesiser crossed with a brontosaurus. Think a hulking, room-sized heap of metal and cables with thousands of moving parts that requires an army of people just to keep it plodding along.
A no-name PC today would blow a high-end 1970s mainframe out of the water thanks to the miniaturisation of electronics and vast improvements to performance in the decades since. At the same time, a desktop computer typically has to worry about just one user, its owner: machine cycles don’t have to be shared with potentially hundreds of other people and their processes, and the configuration of one person’s workstation can be completely different from the workstation at the next desk over. This is all a very good thing.

However, some of the “limitations” of mainframes were blessings in disguise.

Mainframe users didn’t need to know or care where the computer was physically located: it could have been, and often was, halfway across the country. It was an abstract thing that just worked, not much different from an electricity utility. You didn't have to pull up a chair to the actual beast, you connected to it remotely.
Developers didn’t have to concern themselves with “maintaining” the machine or peripheral devices such as disk or tape drives, and in fact couldn’t do so if they wanted to. All these things were just there, always “on”. With mainframes, there were well-run, disciplined, knowledgeable teams dedicated full-time to making sure everything was in working order. No one but the operations team had to worry about disk errors or bad memory cards. In short, as a mainframe user you had people watching over you, your data, and your apps. A benign Big Brother who made sure everything was kept humming.
Granted, this is all far too restrictive for 21st century computing needs, and certainly not enough to make anyone wish for a return to the days of the IBM System/360.
But these kinds of “lifestyle” benefits did allow mainframe users to concentrate on more important things. For programmers, as a side-effect, the restrictions of the corporate mainframe environment also prevented certain bad practices and enforced a kind of healthy discipline that to a great extent no longer exists.

Where did I leave that document?

Today developers can, if they want to, build tools and applications on isolated machines, with no checks and balances. With mainframes, applications and data were stored centrally, not on users’ personal desktops. Everything was more or less locatable. Now, it can be impossible. A “find” command run across a network is not very useful if some machines aren’t on the network to begin with, or if the data in question lives on a local drive unshared with the rest of the pack. This makes it easier to hide or bury things, intentionally or unintentionally.

At one bank I worked for, when a certain senior developer left it took months to track down all the mysterious systems and components he'd built because he hadn't told anyone where they resided, exactly what they did, how they worked. A tech manager had to check one machine after another manually until he located all the various applications the former employee had set up.
A related problem that comes with desktop decentralisation is the ability to use the job scheduler cron (or an equivalent) locally. On mainframes there was generally one central scheduler where a system operator could see the details for all batch jobs across users and applications. In the client-server world, job-management packages such as Autosys use databases that similarly live on central servers: Developers and support staff create and modify Autosys jobs via a web app that controls this shared database, and all of these can be browsed and searched. But anyone with a Windows or Linux box, even one connected to a central server, can still schedule private jobs using Task Scheduler or a local crontab file. Not a very rare occurrence.
There may be perfectly reasonable uses for these localised tools, but they’ll be unknown to the official company-wide scheduler and effectively invisible to system administrators. If a developer who has set up local batch jobs leaves the firm, there’s a chance no will even be aware of the existence of these jobs, much less be able to find them.

All that code wrote last night before checking it in? Well, your dying C:\ ate it

Working locally on a desktop workstation means being excluded from various safety nets that are provided by centrally managed networks and were literally unavoidable with mainframes. The most obvious of these is backups. Since there was no hiding from the central storage devices connected to a mainframe, everything you did, every line of code you wrote and every database record you stored, was backed up at least nightly and sometimes as often as hourly.

Today many users and even developers store data, whether work-in-progress or live applications and databases, on local C: drives. Even “temporary” storage of files on a local drive has a way of becoming permanent through neglect or laziness. Needless to say, having one un-backed-up copy of any file is living on the edge: One wrong keystroke on the command line is all it takes to vaporise a lot of work before you could check it into the version control system.

One under-the-radar use of desktop workstations that is the bane of system administrations and tech managers everywhere is the installation of unauthorised software.
The most obvious risk is malware. Viruses and worms unintentionally installed on your machine and possibly spread from there throughout the corporate network. (This brings together the worst of both worlds: the ability of PC users to load software directly onto their own machines and the ability of malware to cause widespread damage when installed on a networked computer.)
Far less devastating, but still a potential source of problems if you’re part of a much larger IT group, is the introduction of legitimate software that deviates from the company’s standards. This is not to advocate blind obedience to the arbitrary, if not outright ridiculous, rules often set down by management. But when everyone at your firm is using CVS for source control and you (or even you and three colleagues) make an impulsive decision to switch to Git, chaos ensues.

Is that a USB stick in your pocket?

A more common situation is one where a developer loads an obscure and possibly questionable software package or compiler onto a local PC. This can lead to ugly infrastructure splits, where one person has unilaterally decided to develop an application using a pet language or package that no one else in the group knows or, worse, introduces incompatibilities with other apps. Naturally this situation can also arise with networked workstations, where the unauthorised software is downloaded from the web and installed on the corporate network—obviously a much more common and easier approach than loading software locally from a CD or flash drive.

But with mainframes, the in-house machine was effectively walled off, and you were required to go through proper channels to get something like a new compiler installed. A potential bureaucratic nightmare, certainly, but one that at least ensured people were adhering to standards and using well-tested software.
Just as local drives allow PC users to introduce arbitrary software and data onto a corporate network, they also allow the opposite. If you’re a system administrator concerned about the possible theft of sensitive code or information, the ability of users to download gigabytes of data onto a USB drive with no effort probably keeps you awake at night. Again, theft or unauthorised distribution of code is far easier via email or FTP, though any competent network administrator can detect that. But either way, with a network that is essentially wide open to the outside world, and ports that allow data to be copied to a device smaller than your palm, pretty much any collection of bits can leave the building easily. Score another point for mainframes.
The development of tiny, powerful, and fully user-configurable computing devices (and, for that matter, the microchip itself) represented a leap forward that no reasonable person would want to undo, and I admit that my defence here of the glory days of the mainframe is somewhat tongue-in-cheek. Though I do occasionally get nostalgic for the gargantuan Amdahl 470 I developed systems on at my first job.
However, it’s silly to think technology can regularly take five steps forward without even one step back. There were benefits to working on mainframes: a full-service environment where round-the-clock teams took care of virtually all support, allowing application developers to focus on their real work; the freedom to be blissfully unaware of how the 20,000-kilogram computer, six-foot-tall tape drives, and other monstrosities in the computer room operated; and, mostly, enforcement of various kinds of discipline in building and maintaining code that are often non-existent today.
There’s no reason developers can’t be just as disciplined in the post-mainframe era, but rather than being forced to by the rigid topology of the development environment, they have to rely on themselves and their human colleagues to keep each other honest. Good luck. ®

AT&T Moves Dramatically Towards 'Internet Everywhere'

2012-11-08T20:27:00.000-05:00

As the world is changing enterprise solutions are being sought and the telcos are having to reinvent themselves in the services they have to deliver. Aivars Lode

At a much-reported analyst conference yesterday, AT&T announced plans to accelerate upgrades to both its wired and mobile networks, pledging an additional $14 billion over the next three years, in addition to several billion already committed.

When completed in 2015, according to the company, the new infrastructure will offer AT&T customers faster and more reliable network facilities, which will operate natively in Internet Protocol (IP). Text, voice, and data will begin life as packets, travel through the network as packets, and arrive on customer devices as packets.

The plan marks a dramatic step forward in a long move by AT&T and other carriers toward a 21^st century network infrastructure, signaling the final stage of convergence for old proprietary voice, video, and data networks to the open standards of a single IP network.

Think of it as “Internet Everywhere.”

In a related development, the company also filed a petition with the FCC asking the agency to relax legacy regulations the company argues are impeding even faster retirement of legacy networks. This despite the agency’s own clarion call, in the 2010National Broadband Plan (NBP), for carriers to quickly replace their aging copper physical plant with native IP running on fiber.

Specifically, AT&T plans to retire much of its legacy copper networks running obsolete Time-Division Multiplexing (TDM) technology, replacing it with fiber optics transmitting all content as IP packets. DSL Internet service will be replaced with high-speed broadband. Slow and inefficient 3G and lower mobile networks, at the same time, will be upgraded to 4G LTE, in large part by deploying new “small cell” technologies to better serve densely-populated areas.

Skeptics and self-styled consumer advocates seemed determined to find storm clouds hanging around in front of these silver linings. But there is no downside here. Customers will see faster, more reliable service. The company will reduce its maintenance costs for increasingly expensive dying technologies and better position itself to compete with cable, satellite, and other wired and mobile carriers. And the FCC will see its vision of an all-IP network delivered well within the timeframe called for in the NBP.

For his part, FCC Chairman Julius Genachowski praised the announcement. “Today’s announcement,” he said in a statement, “adds to nearly $200 billion of investment in wireless and wireline broadband networks since 2009, and powerful growth in the Internet economy. As our National Broadband Plan said, extending wired and wireless broadband across America is the ‘great infrastructure challenge of the 21st century.’”

Critics Miss the Point…Actually, Several of Them

That great “infrastructure challenge” has so far been met almost entirely with private funds. And while AT&T Chairman Randall Stephenson made clear in his remarks that the company’s overall goal was to improve shareholder value, critics who dismissed the $14 billion investment plan as anti-consumer simply miss the point.

The website GigaOM, for example, harshly criticized the proposal as one that would leave rural customers without affordable basic telephone service, let alone Internet Everywhere. But rural customers will not be abandoned as part of the plan. Rather, many more will now have access to high-speed wired networks that rely in large part on fiber, with short copper loops serving the last mile.

Instead of spinning off its rural customers, in fact, AT&T will spend billions bringing high-speed broadband to an additional 57 million customers through expansion of its U-verse technology. For residents in areas where U-verse technologies will not be immediately deployed, the company has committed to providing an “economic path” to broadband through wireless services based on high-speed 4G LTE networks.

But in no case will residents in AT&T’s service area be left without affordable basic service. Indeed, under existing federal and state regulation, the company must continue to offer any resident dial tone on demand, at prices often set by local regulatory agencies, even if that means serving those customers at a loss or continuing to maintain outmoded TDM networks.

(Oddly, GigaOM’s founder Om Malik later offered an opposing view, agreeing that “The puny Internet speeds [AT&T and Verizon] continued to offer via the old DSL has [sic] no part of this bandwidth-hungry future.”)

Enterprise Modernization: Business agility and commercial edge through application reuse and modernization

2012-11-08T20:26:00.000-05:00

Many organizations are now realizing that they need to look at a scalable platform and that the mainframe is just that. Aivars Lode

A strategy towards smarter computing and IT processes

A Creative Intellect Consulting Thought Leadership Paper Sponsored by IBM

Technology advances such as Cloud computing and mobile, and the myriad programming architectures and delivery models see many enterprise organizations struggling to employ their existing systems and infrastructure effectively or efficiently. Business units want solutions that give them a commercial edge over the competition. They not only have to be best of breed but also flexible and adaptable to change.

With all this pressure it is too easy to believe that the answer is to simply migrate current business critical systems to newer computing platforms. This introduces cost and risk when IT budgets are under immense stress and constraints. Modernization focuses on the stability of existing systems, whilst providing a platform from which applications, middleware and infrastructure can be transformed to meet new business demands.

This paper looks at the drivers for end-to-end modernization, the principles of implementation, and the role it can play towards a roadmap for smarter computing and IT processes. Smarter IT is crucial for putting in place infrastructure, application services, and delivery models able to maximize opportunities for future growth.

Bola Rotibi, Research Director, Creative Intellect Consulting Ian Murphy, Principal Analyst, Creative Intellect Consulting Paul Herzlich, Principal Analyst, Creative Intellect Consulting

June 2012

Creative Intellect Consulting is an analyst research, advisory and consulting firm focused on software development, delivery and lifecycle management across the Software and IT spectrum along with their impact on, and alignment with, business. Read more about our services and reports at www.creativeintellectuk.com

The path to modernization can take a number of routes across all tiers of the IT estate. However, what is important for achieving a robust end-to-end modernization strategy is planning, along with an awareness of what is available and what can be achieved. As always, crucial to planning is clear focus on desired outcome in the context of wider drivers and impacting factors. In this executive summary we outline a number of important drivers for IT modernization and highlight key considerations for those looking to embark on a modernization or transformation journey.

Business competitiveness and organizational agility requires

modernized IT

The Competitiveness of a business requires good products, efficiency, productivity, responsiveness, flexibility, adaptability and innovation. IT contributes to many of those same characteristics and for companies where IT is the business, the link to competitiveness is direct. IT automation for executing development and service management tasks has a huge impact on the enterprise’s agility to respond to changing market conditions, the ability to meet customer expectations, cost effectiveness and productivity of business operations and the ability of a company to take the market by storm through innovation. Ultimately, we modernize line-of- business (LOB) systems to achieve competitiveness.

The mantra of doing more with less has never been more pertinent or challenging

Demand continues for organizations to use what they already have in place. Current budget limitations and a constrained economic climate mean that there are limited funds to replace systems entirely. But the demands for new services continue to increase as do the demands to store and process more information. Ultimately, IT must make better use of the business critical systems it currently possesses and which are working well. Not doing so will have long term implications for future agility and productivity. But IT is struggling with the need to securely adapt and expose existing critical business systems to those technologies and solutions the business is demanding. If IT cannot provide them the business will go outside of the organization to take advantage of technology and delivery models such as Cloud computing and the mobile platform.

Core to a modernization strategy is the focus on regeneration and reuse

Enterprise modernization, as it often translates to, should not be viewed as the automatic replacement of existing platforms. An enterprise modernization strategy must be driven by business needs and workloads. What matters most is the ability to easily make use of IT systems optimized for business critical workloads within applications that can leverage advances in technology.

The regeneration of IT systems can come from upgrading to newer versions that have seen significant investments in improving operational capacity and management capabilities. It can just as easily come from improvements in middleware technologies better able to extract data from established systems and serve in a more modular, service oriented fashion. Or it can come from development environments able to utilize the latest development productivity features (e.g. team and context collaboration) for the continued development of applications deployed on legacy platforms. A significant benefit of these environments is the ability to support those with development process and application design skills, enabling them to easily make use of established application systems to support new business and operational demands.

Architectural focus is crucial for a unified approach to infrastructure, middleware and application modernization

A successful enterprise modernization strategy looks to a unified approach that addresses infrastructure, middleware, and the application delivery and lifecycle management processes. It must do so to support

technology advances within the context of business and operational transformation strategies such as Service Oriented Architecture (SOA) and virtualization. Architectural and technological strategy teams become vital support services towards determining a sustainable approach for supporting the business, including identification of enterprise modernization tasks.

Extracting the most out of existing technology platforms is as important to an architectural strategy supporting business agility and productivity, as the adoption of new technology and delivery strategies (such as the on- demand elastic Cloud computing model.)

Modernization focuses on adaptability not rip and replace

Evaluating and assessing the value of core business critical systems and the true extent of their workload and dependent processes is a vital start point to any modernization. Good awareness of the strengths of key technology platforms, and the skills and tooling support from the vendor community, will ensure that all the advantages will be attained, particularly when looking to execute a technology update strategy.

A specific business process, application or workload may not run well, or even at all, on another computing platform. Moving software may also result in additional license charges. In large enterprises, a significant amount of the core business critical software has been customized and written in-house, and any change to the underlying platform or software could mean rewriting and redesigning software. This is both time consuming, expensive and carries business risk with a small net gain in feature/function.

Vendors like IBM continue to improve and invest in their mainframe technology and platforms: System z hardware, the operating system, and System z software, middleware, and development tools. If organizations don't incorporate their mainframe platforms in their technology update strategies, they are wasting money on maintenance and compute cycles, and are leaving the door open to degraded or static performance.

Enterprise modernization underpins the strategy towards smarter

computing

Enterprise modernization looks to unify and evolve the working strategies and best practices within IT towards the delivery of a smarter computing environment that can support business agility, innovation and growth demands going forward. The key management stakeholders within an IT organization need to work smarter using existing infrastructure, particularly mainframe workloads and systems. This is so that they can maximize the benefits of such assets in delivering the application and IT demands of the wider business/organization.

Detailed report: The move towards Enterprise evolution and modernization

Any business that does not evolve will not be around for long. The key is making that evolution happen without harming the business, allowing it to grow in a stable and sustained way.

With technology, we have a set of tools that are well established in the core of the business. These tools are proven, solid, foundational and essential. Yet the IT department finds itself at the centre of a perfect storm. Core tools are evolving, software, hardware and operating systems are changing and the datacenter is transforming to a more services oriented and highly virtualized environment.

A perfect storm for IT evolution

The landscape of IT is changing. Business units have taken notice of the value proposition that Cloud computing vendors are espousing: data that can be processed and accessed from anywhere, immediate access to tooling, compute resources and large numbers of applications available when required at a low cost.

To be competitive, business units want the latest technologies with support for mobile devices such as smartphones and tablet computing. They want the same ease of use, sophistication and productivity of consumer facing applications and mobile devices in their work systems. And meanwhile, the explosion of data sources is driving a greater focus on analytics. The IT organization is now at the heart of a business growth and value agenda. However, budget constraints and an explosion in new technologies, programming architectures and delivery models are stretching IT resources. Not only is the IT organization struggling to deliver new IT systems, it is struggling to employ existing systems effectively or efficiently. In essence, IT is challenged with the need to securely adapt and expose existing critical business systems to those technologies and solutions the business is demanding.

Inside the IT estate for many organizations

The datacenter is an environment of mixed infrastructure platforms and workloads. Mainframes and mini- computers run mission critical workloads, while commodity servers, storage and network equipment perform general purpose computing. The transformation of the datacenter has been achieved using well established technologies such as virtualization. Servers that used to run single applications now run multiple workloads. While the datacenter footprint has reduced, capacity, capabilities and power consumption have increased.

The move towards a services based architecture (SOA) has seen the datacenter transformation evolve further. Cloud computing with its various “as a Services” models (infrastructure, platform, software, business processes etc.) and the pursuit of mobile application services support adds another perspective to the transformation process. With this mix of infrastructures, “hybrid” becomes a strategic direction for workload optimization and fine tuning, as well as application development. Figure 1 below outlines the complexity potential within IT that presents a modernization challenge.

Figure 1. Outline of the IT estate serving many organizations

Infrastructure Platforms

• Mainframe platforms

H/W

Software (SW)

•Distributed systems Hardware (HW) HW HW •Business critical apps

SW SW SW Software Hybrid Management Services

Middleware & Service Layer

(e. g. ERP/CRM/BI) •Databases

•Message broker •ESB •App Server •SOA

•Platform as a Service (PaaS)

•Mobile •Desktop •Browser (web app) •Software as a Service (SaaS) •Embedded device •Composite Software application

Delivery & Deployment Platforms

Source: Creative Intellect Consulting

In this diagram we see the challenge for IT managers. The systems that make up infrastructure platforms are complex. They range from dedicated hardware platforms running a single application, to hardware platforms supporting multiple applications, and applications that are distributed across multiple sets of hardware.

Below this is the middleware layer that helps IT expose these systems to new platforms and applications. This might be as simple as messaging software managing interactions between different layers of a software transaction. Similarly it could be Enterprise Service Bus (ESB) and Service Orientated Architecture (SOA) components exposing parts of the critical business systems on legacy platforms, so that the data can be consumed via new applications.

At the bottom we see the complexity of the end user delivery environment: new applications, different hardware platforms, multiple device types and multi-tier applications, that all create and consume data from the legacy systems. Each of these has its own tooling and often management components and relies on the middleware to connect it to core business systems inside the software estate.

An application rich environment going forward

At the heart of the business, core enterprise applications revolve around large suites, complex databases, bespoke industry applications and an extensive amount of in-house code. Meanwhile, the demand for mobile applications is constant from arrival of the first smartphones, then netbooks, and now the more sophisticated tablets and smartphones. Cross compilers common runtime environments are making it easier to develop applications that can be delivered on multiple mobile platforms.

Other new technologies such as Software-as-a-Service and Platform-as-a-Service, both part of the Cloud computing model, allow for the delivery of multi-tenanted application services. Social applications are seen as being increasingly important to organizations, especially within the enterprise, where they provide collaborative working and the ability to create ad-hoc online engagements and context aware connections. An

• Contextual Collaboration services •Process and workflow orchestration, continuous integration & delivery

Development Services – unified platform

inevitable consequence is that enterprise IT is increasingly moving towards a hybrid architecture, in which both existing and new models co-exist to support the delivery of services to the business.

With organizations across the broad spectrum of industry and market segments now realizing the value of the data they hold, along with access to large volumes of data generated from a range of new sources the demand for analytics has increased. Analytical processing and the correlation of different intelligence points herald a future drive in intelligent based applications.

Streamlined evolution and modernization: Strategy guidance

Business units look at the availability and accessibility of applications on mobile and tablets, and want comparable solutions for their systems. The dilemma for IT is that anything connecting to core systems has to be enterprise quality. Hacking together code to create a quick and dirty solution clearly does not espouse enterprise quality and opens the way for vulnerabilities. Moreover, it leads to rising technical debt that will eventually hamstring the organization and limit productivity.

Speed of delivery is a facet of competitive advantage, as are cost and quality. Therefore mobilizing resource investments already made to help support the fast delivery of solutions that comply with the governance requirements of the organization and the regulatory constraints is crucial. But so too will be dealing with the challenge of how the development and change management of applications targeting different systems is brought into a unified lifecycle strategy. What becomes important is provision for a common application lifecycle management platform that supports the productive development and change management of applications deployed to different environments. To achieve this requires a strategy that unifies infrastructure systems, middleware technology and application delivery and lifecycle management solutions.

A modernization strategy must address the management requirements

of a hybrid environment

With the rise of hybrid environments that now encompass mobile delivery and Cloud computing resources, management tools and services need to be able to address disparate platforms, and provide greater support for automation and rule-based management. Ultimate responsibility for service delivery remains with the IT department whether they are in-house and hosted. Therefore, the effective monitoring of all systems becomes important not only for satisfying key performance indicators but also for validating the long term economics of a deployed workload and process strategy. The increasing compliance and regulatory demands on IT has further emphasized this focus on management tools and monitoring services.

It is critical that enterprise IT teams look for an extensible management tooling strategy that provides multi- platform support. IT never stands still. Without an extensible suite of management tools based on open standards, any tooling update will be little more than a point solution to solve today's problem and the start point for tomorrow’s. In the face of growing complexity, ease of use and simplicity remain crucial requirements.

For Zavod za zdravstveno zavaronanje Slovenije (ZZZS), a Slovenian health insurance provider, their underlying hardware was a hybrid of mainframe and BladeCenter. Using the IBM zEnterprise Unified Resource Manager (URM), the company was able to get a more effective balance of resources to meet critical application demand.

Vendors have done much to support standards that open their tools, allowing the exchange of data with third party tools and the alignment of workflows. But it is an ongoing challenge that requires further attention if continued support for third party solutions is to happen in an appropriate timeframe.

Developing a charter for Enterprise Modernization

Enterprise modernization is about the IT organization supporting business agility. It encompasses people, processes, technology and operational systems. Success requires an alignment between business units and the IT organization and operational systems to create an IT estate that supports the business more dynamically.

The integration layer is the middleware where the focus is on services, unified communication and messaging. Underneath is the support of workload optimized infrastructure which establishes a role for the mainframe platform in line with other computing systems. Above is the application layer delivered and consumed as user expectation and usage demand dictates.

Responding to these needs requires seizing the bull by the horns, developing an enterprise modernization strategy that looks to:

• Address the disconnection between the silos of working practices and skill sets in order to bring about unified operational and organizational collaboration, particularly one that delivers more effectively and efficiently the demands and goals of the business.

• Delivering a tooling and common services strategy for uniting new skill sets with seasoned ones and supporting multiple environments within a unified lifecycle, process management and governance framework.

• Support alignment between individual, team and organizational productivity goals. Process evolution and modernization for optimal business process delivery.

• Establish agility across the various boundaries within infrastructure, middleware and the application lifecycle. Establish agility across multiple teams, from architecture, through development, test, and production operations.

• Accepting and leveraging the cultural and behavioral requirements of individuals, teams and organizations.

Overhaul and adapt not rip and replace

Achieving the above goals through enterprise modernization is not simply about going on a buying spree to acquire new hardware, technology or software. It is about making the most of the IT assets that exist within the organization and adding to these, processes and services that make those assets more easily accessible.

For Trustmark National Bank (TNB), moving off their mainframe was not practical owing to the level of transactions experienced daily and heavy customization. In short, TNB modernized their middleware and tooling using WebSphere MQ and Rational Developer for System z (RDZ) to deliver information from the mainframe to the variety of devices customers were using.

Confidence through stability and relevant migration

Balancing the confidence and value in established IT systems with the flexibility and gain from newer and more dynamic technology is crucial. Stable systems keep the company running – too much change leads to instability andincreasedrisk. Determiningwhattoopenupandwhattomigrateisdrivenbyworkloadrequirementsand business demand. This is not about repeating the rush to transfer the logic from the mainframe to a distributed environment. It is, however, about modernizing the process of IT and governing how fast it can be delivered. Just as importantly, it is about understanding the value of IT assets, financial or otherwise. And these assets include the mainframe platform.

Recognizing the value of the modern mainframe platform

The move to distributed environments, which are seen as being flexible, cost effective, and for which there is a constant supply of updated tools and software, is regularly seen as a sensible move for IT. However, with distributed computing, the size of the computing space and the constant network traffic, as data and applications are moved around, impacts performance and increases costs when buying additional hardware.

In reality, tooling support has significantly evolved for many established systems running core business applications. Management models now apply across all systems, and agile application development methodologies are used for software development on all platforms, mainframes included.

The mainframe platform is a vital asset for many organizations

For many organizations, the mainframe is still considered the correct technology for the workloads and types of processing that they are doing today and looking to do in the future. Batch and transactional processing, complex analytics and the management of very large databases have always been core mainframe workloads. In a data rich world, analytical insight and correlation becomes critical to smart targeted application services.

Mainframes utilization rates are also very high, typically over 90%. Even though virtualization has driven the use of commodity hardware, few environments get near to a consistent utilization level of more than 60%. While commodity servers can have resource allocation and management issues, the mainframe has highly stable, mission critical proven virtualization support. The mainframe can also run more virtual machines than commodity hardware because it has more efficient dynamic resource allocation features. The mainframe's unique I/O architecture allows for central processors to run computations, while separate processors deal with network and disk communications.

With all of this data and all these different platforms, it is important not to forget the network. As applications and data get spread over multiple platforms, including the Cloud, there are significant concerns over performance that must be planned for (e.g. latency, bandwidth and costs).

The challenge for the mainframe is that it is often seen as being less flexible than commodity servers. However, a number of other factors question this proposition.

• Compatibility – Modern mainframes backward compatibility for code that can be over a decade old. While languages are being brought up to date there is no budget for a complete rewrite of enterprise software packages. Commodity servers can support some backward compatibility through virtualization of instances, but much of the software they support has a vendor supported lifespan of less than a decade.

• Mainframe CPUs are designed for specific workloads, making them much more powerful and efficient than commodity computing CPUs.

• Software costs – Software licensing for mainframes can appear high compared with commodity costs until you look more closely at the resource limits. When the two are compared, there is rarely any difference.

• Recovery and fault-tolerance – Mainframes were designed to be always on. As a result, backup and recovery, whilst not instantaneous is measured in minutes not hours and the mean time between failure (MBTF) rate for a mainframe is orders of magnitude less than for an array of servers.

• Second-hand value –Mainframes hold their value based on the number of instructions the mainframe can execute, and the specialist chips and boards can also be sold on separately. Commodity hardware loses much of its value within a year. This should be factored in to the Total Cost of Ownership (TCO) calculation.

Given the correct workload and utilization levels, the mainframe platform remains as relevant to large scale computing use, in a dynamic IT environment, as it ever was.

Delivering developer productivity and lifecycle management in the hybrid environment

Enterprise architects and the application delivery team must not only look to take advantage of the latest advances in software application technology and delivery models, but also of the workload mixes that a hybrid environment offers.

Application workload optimisation and developer productivity in a hybrid workload environment is crucial. Tooling, licensing and education differ across a hybrid workload, as does management and security. Mainframe and mini computers have enjoyed the benefits of multi user and virtualisation. These are now the driving forces behind the move to Cloud Computing and the whole “as a Service” mentality. What many organizations need is to understand is that they already have the skills needed for designing and delivering multi user, virtualised environments, but within the context of a hybrid platform.

There is a concern that there is a shortage of mainframe skills at the same time that there is a rise in their applicabilityforfutureworkloads. Organizationsneedtorecognisethischallengeandinvestintoolsthat enable cross skill migration.

A tooling strategy for modernization

Modernization comes through automation of individual development and operations activities, integration of activities across the lifecycle and overall IT-wide management. This work has been software supported with individual Integrated Development Environment’s (IDEs), siloed Source Control Management systems, automated test execution, configuration management, separate defect tracking and automated operations. However, this infrastructure has some key shortcomings:

• preserves siloes in IT and does not communicate well with the business • provides wrong or incomplete pictures of progress and quality • wastes intelligence about I T overall

The remedies come at several levels:

• Application of business management tools to IT: workflow, collaboration and analytics

• Adoption of integrated ALM (and SM) solutions tuned specifically to the needs of IT, sometimes referred to as DevOps

• Changes to ‘point tools’ to meet the goals of enterprise software modernization.

The first two groups of tools are aimed at streamlining processes, improving communications among IT and LOB teams, and giving IT management better decision-making support. In general, existing point tools – such as IDE’s, build systems, testing frameworks and others - can interoperate within ALM solutions, but on occasion additional point tools need to be introduced to support modernization and the existing point tools used by developers need to be updated to make them ‘ALM-able’. Also, as developers find they need to switch between platforms in a hybrid environment, use of common tools across these environments keeps them engaged and on task.

Use of static analysis to identify ‘technical debt’ built up in existing systems is a case in point. Decisions about what to modernize have business dimensions, but they also have technical aspects, which static analysis can uncover, for example, identifying latent defects, weak security and redundant or dead code.

Bringing legacy languages into heterogeneous systems using the same IDE and execution frameworks as modern languages is another example. Reworking – by front-ending, wrapping, restructuring or full interoperation – COBOL code in which important business rules are embedded is often part of enterprise IT modernization. Toolsets that can facilitate the understanding of code structure for modernization are indispensable. Where heterogeneous systems are the norm, the ability to integrate COBOL code into Java and .NET is a powerful capability to have in the modernization armor. Toolsets like Micro Focus’s Visual COBOL and IBM Rational’s Enterprise COBOL for z/OS and Rational Developer for zEnterprise provide these facilities, and importantly, they work via the same IDEs and frameworks as the modern languages. This means that the ALM solutions, which typically interoperate with development in Eclipse or Visual Studio, need no extra interface to bring COBOL development within ALM.

Modernizing the tools and methods used by IT turns out to be a valuable part of the bigger picture of modernizing enterprise LOB systems themselves.

Aligning middleware with the needs of modernized IT

Middleware originally appeared as a way of asynchronously connecting disparate computer systems - primarily mainframes and distributed servers. Today, middleware plays a critical role when connecting any n-tier computing architecture and for new technology strategies, selecting the right middleware will have a significant impact on what one can achieve.

Middleware is about integration, workflow, extensibility and integration among other things.

• Integration – is key to enabling legacy systems, hardware and software, to be exposed to newer hardware, software and platforms, making it the glue in any heterogeneous computing environment. Two examples of middleware strategies doing just this are Service Orientated Architecture (SOA) and Enterprise Service Bus (ESB) frameworks. Both make it easier for developers to create services that link mainframes to commodity servers and then push to a wide range of solutions and platforms. Such services focus on transforming data from disparate systems so that they can be used in other applications and on other platforms such as mobile devices.

• Security – requires support for multi-vendor solutions from secure messaging to encryption both on the device and when data is in transit. Middleware must support industry standard approaches like HTTPS, SSL and encryption.

• Workflow – An important part of middleware for analysts, developers and operations is its ability to provide a workflow for the automation of business processes. While IT departments are overrun by workflow tools, the role of middleware makes it an ideal candidate for managing and automating workflow between systems. It can also act as a critical debugging and fault finding tool.

Laying the groundwork for modernization

Perhaps the biggest challenge to modernizing your application portfolio is balancing cost against risk and maximizing benefits to the business. The four main reasons for modernization are:

• Facilitate easier application creation and modification, either by internal developers, contractors or chosen third party suppliers.

• Improve the delivery of applications to the business units and meet their demands of IT. • Make it easier to integrate commercial software, such as management tools, into the existing IT estate

to improve oversight and control of IT. • Enable the smoother delivery of applications to use new platforms such as Cloud, Mobile and SaaS.

There are three steps that need to be addressed to ensure the most effective approach is adopted:

• Assess existing applications and establish what is critical to running the business. Decide which applications should be modernized, which should be retired and/or replaced and which can be consolidated into new application.

• Modernize any application and there is a risk to the business. Plan for disaster and it is easier to manage change. Review existing processes to see which are no longer applicable for how the business intends to grow. Revisit platform choices such as mainframe, Cloud, client/server and SaaS to see what they offer in terms of application enhancement.

• Managing and governing change means understanding how transformation will affect the business units and their relationship with IT. In a service orientated environment, the Service Level Agreement (SLA) is a key measure of effectiveness and must reflect the infrastructure and the software. This is an opportunity to assess the way IT and data are created, stored, maintained and accessed, especially as it relates to corporate responsibility, legal and compliance issues.

Platform evolution and refresh raises the prospects for progressive transformation and modernization

Across the broad landscape of industry verticals (Public Sector, Financial Services, Pharmaceuticals, Telecommunications, Aerospace & Defense, Automotive and Manufacturing for example), organizations have invested heavily in mainframe platforms that continue to successfully handle core application workloads. Many recognize the continued value and potential of these systems particularly for application workloads that they can see expanding with future demands. Although commodity hardware continues to come down in price, it still cannot compete with the mainframe platform when it comes to cost per instruction executed.

Mainframe providers like IBM continue to improve and invest heavily in their mainframe technology and platforms: System z hardware, the operating system, System z software, middleware, and tools.

They have evolved the platform to what is now a finely tuned, highly optimized and efficient environment that is designed for sophisticated data handling, transaction processing and smart analytics. Today’s mainframe platforms now deliver significant performance gains, along with the ability to easily manage virtual resources across multiple compute platforms. Support for multiple computing environments (Windows, Linux etc.) and the unified management of hybrid workloads offers a level of simplicity in the face of increasing complexity.

The move to unify portfolios of tools to enable seamless interoperability of services and capabilities across its server platforms is a driving strategy of enterprise vendors like IBM. It is one that supports a level of efficiency, allowing clients to leverage and maximize skills and sustain a higher degree of automation and collaboration. It is an approach that is driving competitive advantage and business value proposition.

Upholding the mantra of 'doing more for less’

Organizations cannot simply throw out the old, since much of their legacy environment will be running business critical systems. Yet, a great deal of an organization’s existing systems and middleware investments provide a fantastically powerful foundation for a whole variety of applications. So the smart approach is to look at how to get the most out of available infrastructure alongside new technologies, to deliver business-aligned services that take advantage of the benefits of the latest advances and delivery models.

Achieving this is as much about understanding and being smart with your existing computing resources as exploring opportunities to derive benefit from new innovations and hosted technologies from the Cloud. Leading edge organizations recognize that in the future, hybrid infrastructures that make the most of both in- house and Cloud-based services will become the norm. Against this background, never has it been more crucial to understand how to derive the most value from existing technology and IT systems.

Appendix A: Profiles of customer modernization experiences

There are many routes and reasons for Enterprise Modernization. There may be a need to provide new software, better support of hybrid infrastructure or a need to reduce costs. We look at two cases where enterprise modernization followed different paths using the IBM portfolio of products and servers.

Zavod za zdravstveno zavaronanje Slovenije (ZZZS)

ZZZS is the public body responsible for providing compulsory health insurance in Slovenia. With 890 employees working from 45 branch offices, they had a complex but antiquated computer environment. Previous attempts to modernize included the introduction of new electronic systems, one of which is an online system giving health providers access to patient health insurance status.

The underlying hardware was a hybrid of mainframe and BladeCenter. The increase in resource requirements following the introduction of the new systems could not be met with existing hardware. Rather than a wholesale replacement of all the hardware, ZZZS upgraded their mainframe and using the IBM zEnterprise Unified Resource Manager (URM), were able to get a more effective balance of resources to meet critical application demand.

As part of the upgrade, ZZZS undertook a close investigation of the workload requirements and used this to inform their purchasing decision. Part of that investigation highlighted the need for more focus on data analytics and on the delivery of web-based applications.

The zEnterprise URM ensures that workloads are no longer limited to a single platform. Instead, as the workloads change, they are migrated across the platforms to match demand with the correct hardware. Modernization for ZZZS was in their hardware and workload solutions. Upgrading the mainframe gave them the opportunity to add specialist chipsets to support their increasing analytics demand. The use of zEnterprise URM to balance workloads not only improves performance, but lowers costs through higher utilization of assets preventing the need to increase assets.

Trustmark National Bank (TNB)

TNB wanted to provide near real-time eBanking services to customers as part of their competitive advantage and customer service program. Their challenge was how to deliver information from the mainframe to the variety of devices customers were using. Traditional web-based applications would require unique interfaces for different devices and screen sizes, creating a problem of multiple code paths and increasingly complex management. Any system being delivered also had to be available to the Contact Center and to bank tellers, so that they would have the same information as customers.

Moving from the mainframe to distributed servers in order to deal with increased demand from customers and staff is not practical for TNB because of the level of transactions experienced daily. At the same time, changing the existing critical business systems at the heart of the customer system was not a possibility. This is because their software has been heavily customized and tuned to meet the bank’s need.

Outsourcing the development of a new application for multiple devices would mean a complex mix of different code bases, so they sourced software that would leverage their existing assets and deliver a solution without risk, multiple code projects and the need to retrain developers. The solution was to use Rational Developer for System z (RDZ) and WebSphere MQ. Data is taken straight from the mainframe and delivered directly to the web application. The application is screen aware and capable of delivering customers an optimized User Experience. In short, TNB modernized their middleware and tooling. RDZ fits into their existing environment ensuring that the developers do not need to be retrained or write additional code that would add to the maintenance workload. WebSphere MQ ensures that the flow of data from the enterprise systems to customers, tellers and contact center is seamless.

Oracle Corp.: Notes from Oracle OpenWorld 2012

2012-10-10T20:20:00.005-04:00

Oracle has just got into true multi tenancy . Dark Star Cloud has had this natively for decades

We attended Oracle OpenWorld, Oracle’s users’ group conference, and the company’s Analyst Day in San Francisco this week. Although there was nothing to change our positive opinion of the shares, we believe the following should be of interest to investors. Remain Overweight.

· ‘Just didn’t know it was Cloud’ – positioned well with broad and deep product portfolio. It turns out that Oracle has been a Cloud company all along – it just didn’t know it. We actually agree with this assessment of CEO Larry Ellison, but we do note that of the various delivery mechanisms that Oracle plans to deploy (on-premise, hosted, Public Cloud, Private Cloud, SaaS), a true multi-tenant SaaS solution is relatively new to the company, other than through recent acquisitions. We believe Oracle continues to be the best positioned company of size in the Software sector, given the breadth and depth of its current product portfolio, which should drive meaningful organic growth over the next few years. While management’s impressive record of execution does not eliminate the risks involved, it certainly mitigates this risk relative to others.

· Exadata X3 refresh should add to recent momentum. We believe the latest Exadata X3 refresh, with in-memory capabilities, should add to the growing momentum of the Exadata systems, which we believe are likely to be a meaningful driver of growth for the overall hardware business starting in early CY13. See our note “All That Remains Is … Exacution” dated November 17, 2011 for a more in-depth analysis of Exadata opportunity.

· Focusing on organic growth, Oracle’s not pressed to make large acquisitions. Management reiterated that there isn’t a pressing need to make large acquisitions, given the strong portfolio, although compelling targets will certainly be considered. Oracle will continue to return cash to shareholders via buybacks and dividends.

· Continued specialization of sales force. Management reiterated their focus on increasing the sales force’s specialization to drive greater adoption of Oracle’s stack to its 390K+ customers. We do note that this approach likely means it will take longer ramp times for reps to become productive (12-18 months vs. 6-9 months typically). While there are probably risks associated with this different approach, we believe it is likely logical given the company’s size and breadth of products.

· We rate ORCL Overweight with a Dec. 2013 price target of $40, based on Scenario 3 of our DCF.

IBM TARGETS AMAZON IN THE CLOUD

2012-10-10T20:12:00.004-04:00

We applaud IBM finally coming to the table with an offering validating the mainframe as an option for cloud. This is something we have been promoting for a while. Aivars Lode

By SPENCER E. ANTE

International Business Machines Corp. is taking aim at a market where the technology goliath is more like the new kid on the block.

In a shift for a company that typically deals with the world's largest corporations and governments, IBM will ramp up its efforts to sell so-called cloud computing services to midsize businesses. The Armonk, N.Y.-based company has lined up partners to resell its services and is helping software companies adapt their products to IBM's machines.

The move, to be disclosed on Wednesday, puts it in more direct competition with Amazon.com Inc. and Salesforce.com Inc. Both have been successful in the mid-market and are expanding their offerings to the larger corporations that make up IBM's customer base.

IBM hopes its industry knowledge and broad technology offerings will help it win a big share of the market and that a bunch of little deals could add up to new and sizable revenue. But IBM isn't even on the radar for many midsize companies, which IBM defines as those with fewer than 1,000 employees, and it will be a challenge for its vaunted sales force to push these much smaller deals.

Spencer Rascoff, chief executive of Internet-based real estate company Zillow Inc., is a typical client for companies that rent computer power or provide software over the Internet, both cloud services. The midsize public company with nearly 500 employees and $66 million in 2011 sales said it has rented computing power from Amazon.com to run massive calculations from time to time.

When asked if he would purchase such service from IBM, Mr. Rascoff said, "I didn't even know they were in that business."

Technology research firm Gartner estimates sales of cloud computing services will reach about $58 billion this year, up from about $50 billion in 2011.

The phrase "cloud computing" is a catchall term that describes a host of technologies, including renting computer power and providing business software online to help companies manage their customers.

IBM identifies cloud computing as one of four major revenue-growth areas, including emerging markets, data-crunching analytics software and urban technology systems. But the company lags some of its rivals.

Amazon.com is considered the leader in the market for renting compute power, while Salesforce.com is the top seller of customer management software over the Internet, say analysts. But both companies have been using those power bases to expand into new cloud markets that serve larger customers.

"We haven't seen IBM deliver on their vision,"Salesforce.com CEO Marc Benioff said. Mr. Benioff said at the company's recent conference he got questions about cloud computing efforts from Amazon.com, Google and smaller companies but not one question about IBM's efforts. "IBM doesn't own the technology like they did in the last wave," he said. Amazon.comdeclined to comment.

Andy Monshaw, IBM's general manager in charge of small and medium sized businesses, said the cheaper cost of cloud computing will let the company reach a bigger base of smaller customers.

The company is working through partners to extend its reach. Charles Phillips, a former top Oracle Corp. executive, is now CEO of business software maker Infor Global Solutions, which is working with IBM on the effort. He said the company has been providing financing and marketing support.

Web application developer and IBM partner Highland Solutions said about 10% of its several hundred clients run their software on IBM cloud technology. Jon Berbaum, director of client engagement at the company, said: "We see it as a really viable alternative."

Separately on Tuesday, IBM's board of directors named current CEO Virginia M. Rometty chairman of the board, effective Oct. 1. Ms. Rometty succeeds IBM's previous CEO and current chairman Samuel J. Palmisano, who will become Senior Adviser to the company until he retires on Dec. 1.

Big mainframe shops embiggen, says BMC survey

2012-10-10T20:08:00.001-04:00

As we can see from this article the mainframe is alive and very much relevant in todays computing world. Aivars Lode

Like mainframe-makers IBM and Unisys, BMC Software gets a sizable portion of its $2.12bn in annual revenues – and presumably a disproportionately larger portion of its profits – from those venerable old card wallopers all gussied up as modern servers. This is why BMC has been conducting surveys over the past few years on the mainframe base to help steer its own business decisions and show that the sector is stable.
BMC's mainframe products, which it breaks out as Mainframe Service Management tools, drove a hefty $829.9m in revenues in the fiscal 2012 year ended in March of this year, with license sales up 6.7 per cent and growing more than three times as fast as the tools BMC sells to manage distributed and virtualized systems. You may wonder why IBM hasn't bought BMC already, but the US Department of Justice might have something to say if IBM tried to buy or BMC tried to cash out.
So BMC will continue to compete with IBM, CA Technologies, and a handful of others that peddle tools that help mainframe shops crank up the utilization on the boxes. And as the seventh annual mainframe survey shows, it doesn't look like any more mainframe shops are looking to dump their boxes than have in past years, and those that are looking for an alternative are generally on the low-end of the market.
In any given year, somewhere between 5 and 6 per cent of the IBM mainframe base that BMC polls says they are looking to move off their mainframes, says John McKenny, vice president of strategy and operations for the MSM line at the company. This year was no different, with 6 per cent of the 1,264 customers polled say they were looking for the exit signs. Another 40 per cent said they expected to keep mainframes around for the long term for existing applications, and 50 per cent said they were looking to grow their mainframe complexes for growth on existing workloads and to run new workloads. The other 4 per cent in the survey said "Other" ... so heaven only knows what that means.
When customers do leave, they generally are not doing so by porting their applications to Java, but rather by replacing the mainframes and their legacy applications with shiny new servers (generally Unix or Windows machines) with off-the-shelf packages. That said, those who are sticking with the mainframe absolutely are adding Java applications to their machines, either from third parties or homegrown – and they're also, where practical, trying to replace COBOL/CICS, PL1, and assembler programs with Java. "Customers want to be able to hire college students to write their applications," says McKenny.

Bean counters, mainframes and IT budgets

As you might expect, customers operating mainframes cite the high resiliency, the high throughput, and the security of mainframes as reasons to keep them. But as usual, the mainframe sticks out like a sore thumb in the IT budget, and so is a constant target for bean counters and IT execs and developers who know and like other platforms. "The mainframe is a big, single line item in the budget because it is a consolidated system," McKenny tells El Reg. "It really pops out."

The shops that are looking to jump off the mainframe tend to be smaller shops with modest amounts of MIPS, the traditional and now largely abstract measure of relative performance in a mainframe which used to count how many millions of instructions per second a central processor could crank through. Those who stay tend to continue to add MIPS. "The small tend to get off the platform or get smaller, while the medium and large customers tend to get larger," explains McKenny.
McKenny says that more than half of the shops that BMC has as customers are smaller mainframe shops, with fewer than 1,000 MIPS of capacity, with the biggest shops having several hundred thousand MIPS of capacity. BMC reckons there are around 3,500 unique IBM mainframe customers worldwide, and IBM has said in recent years there are around 4,000. The site count and the footprint count are both obviously quite a bit larger since main shops have multiple frames for high availability and scalability reasons, and often mainframes in different locations for the same reasons.
The annual mainframe survey has never been restricted to BMC shops, and the company uses a variety of ways out there on the web to reach the 1,264 customers who took the survey in 2012. About 60 per cent of those polled came from the Americas, 30 per cent were from Europe, and the remaining 10 per cent were from the Asia/Pacific region. By industry, 43 per cent of those polled for this year's survey came from the financial services and insurance industries and 19 percent were from local, state, and national governments. A little more than half had revenues – or in the case of governments, budgets – in excess of $1bn.

Mainframe shops still want lots of MIPS – particularly as prices drop

Not everyone who was polled by BMC was willing to talk about their plans for adding MIPS capacity, and if you look at the number of survey respondents to this question for the past three years in the chart above, you can see that the number has been dropping as well. About 4 per cent of those who did talk about capacity said they were dropping their MIPS capacity by 10 per cent or more and another 7 per cent said they were cutting back from 1 to 10 per cent compared to a year ago. These are general purpose MIPS for running z/OS, z/VM, z/VSE, and z/TPF operating systems, not so-called specialty engines with lower prices on hardware and software for running Linux on the mainframe (IFL engines) or accelerating DB2 (zIIP engines) or Java and XML (zAAP engines) workloads.
About 30 per cent of the mainframe shops have stood pat with their MIPS this year, and 44 per cent – a slightly larger percentage than in 2010 and 2011 – said they would added a modest amount of processing capacity (between 1 and 10 per cent of their current pool) in the past 12 months. And consistent with prior years, about 15 per cent of those polled said they had increased their aggregate MIPS by more than 10 per cent this year.
Specialty engines are being increasingly adopted by mainframe shops, and it is no surprise at all when a System z processor core running z/OS costs four or five times an IFL, zIIP, or zAAP. Here's the trend line for the zIIP engines from the past three BMC surveys:

zIIP specialty engine use on the rise at mainframe shops

As you can see, 68 per cent of the companies polled who answered this question (again, a very large portion of the mainframe shops polled didn't want to answer the capacity questions) had zIIP engines, with about half with a handful and a small percentage with dozens. (The fact that all mainframe shops don't have them is really an indicator of how popular CICS/VSAM and IMS flat-file databases are out there in COBOL land, even to this day. zIIPs don't accelerate these systems programs, only the mainframe variant of the DB2 relational database.)
There were two other interesting things in the mainframe survey.
First, as you might expect, mainframe shops are concerned about finding and retaining the DB2, IMS, and mainframe management skills they need to make those card wallopers sit up and roar like a T-Rex. Only about a quarter of those polled said they are not worried about future staffing issues as the pool of mainframe talent continues to gray and bald (or both). IBM has put new interfaces on its systems software to make it easier for newbies to learn and run these systems, and Big Blue is also pushing lots of students through its Academic Initiative (particularly in Asia) to get college students at least acquainted with the System z mainframe. Companies are also hosting their own boot camps to train college graduates in the ways of the mainframe.
The second thing that jumped out was that for all the talk about the ruggedness of mainframes, 39 per cent of the mainframe shops polled said they had one or more unplanned outages in the past year. Of these, 29 per cent said the outage it had negligible impact on their companies, but 10 per cent said the surprise downtime had a significant impact.
Hardware failures were the main cause of 31 per cent of these outages, with system software crashes being another 30 per cent, in-house application crashes driving another 28 per cent and a failed change process (a patch or some other tweak) accounting for 22 per cent of the causes of unplanned downtime. Obviously, there were multiple causes in some cases (and perhaps most cases) but given all the talk about the legendary uptime for mainframes, 10 per cent of customers experiencing significant unplanned outages seems like a high number. You can take a gander at the 2012 mainframe survey from BMC here. ®

Westpac to stick with mainframes

2012-10-03T12:09:00.000-04:00

If it needs to be enterprise mainframe it is. Aivars Lode

Bank has no plans to use external cloud or reduce mainframe numbers, says mainframe chief engineer.

Mainframes will still be in use in the future for Westpac Group despite the bank’s stated goal to reduce costs through its IT transformation strategy known as the strategic investment program (SIP).

Speaking at a BMC Software press briefing in Sydney, Westpac mainframe chief engineer Glenn Bowden said that the banking group currently operates a total of 10 mainframes with six used by Westpac, two utilised by St George and the other two mainframes located in New Zealand to serve its operations there.

Westpac to introduce SAP integrated real-time payment system

Q&A: Westpac Group CIO, Clive Whincup

Westpac’s mainframes are located in Sydney across two sites for disaster recovery and failover purposes.

According to Bowden, it has the “right number” of mainframes for the workflow that the bank handles with no plans to reduce mainframes or consider public cloud services.

“We have been running what I would consider an internal cloud on a mainframe for many years through the fact that we share environments across multiple machines,” he said.

“I don’t think in the foreseeable future that we would look at external cloud for mainframes. It’s just not viable because of data and security issues.”

According to Bowden, mainframes are still the best platform for high volume transaction processing.

In terms of transaction volumes, he said the bank is seeing upwards of 20 per cent year on year growth. This growth is due to the rise of mobile banking with Westpac customers eager to check their account on either a smartphone or tablet.

“It used to be that our capacity was driven by a finite number of retail outlets because there is only a certain amount of automatic teller machines [ATMs] and tellers so we could determine how much capacity we needed,” Bowden said.

However, there is no longer any real quiet time for Bowden and his mainframe team because of online and mobile banking transactions.

“My quietest time is the early hours of Sunday but Australians are still out there spending money in hotels around the world and I have to cover that. There is an expectation that customers can access money 24/7.”

Another issue Bowden faces is finding mainframe staff in Australia or overseas. To overcome this, the bank is mentoring younger mainframe team members and is also in talks with an Australian university which offers mainframe components as part of its ICT degree.

“The key issue is not finding COBOL programmers,” he said.

“The hard part is finding the guys who know how the system hangs together — the professionals who take full responsibility for the machine.”

Public Cloud Spend to Hit $100B by 2016, Says IDC

2012-09-13T22:49:00.000-04:00

My comment is that is why there is Dark Star Cloud. Aivars Lode

A new IDC report predicts $40 billion in public cloud spending in 2012, which it says will grow to $100 billion annually by 2016.

One big takeaway of this public cloud trend, per David Chernicoff’s report at ZDNet:

“[IDC's] expectation over this 5-year time period is that annual compound growth rate of the public IT cloud business will be five times greater than the growth of the IT industry, signifying a weather change to the acceptance of public cloud IT services across the board.”

Growth is primarily from “businesses evaluating and moving existing applications and internally supported services to the cloud, and that the major growth will be seen as companies begin to look to cloud services to drive innovative new offerings and innovations that will expand business opportunity,” the ZDNet report notes.

IDC defines five key areas of growth for cloud services and expects these services to provide more than 40% of the overall industry growth with these key technologies; basic storage, servicers, applications, systems infrastructure, and Platform as a Service (PaaS). This prediction for PaaS is the most tenuous of those offered as the growth of this service has not been as strong as analysts previously expected, with a significant amount of customer concern over turning this much control over to a public service.

Small- and medium-size businesses (SMBs) are also expected to go big on the cloud.

But there’s another bigger takeaway here for cloud watchers. Chernicoff notes the IDC reports lack of a focus on private clouds, highlighting “a presumption that as public cloud IT services mature, that they will eat into the market for private clouds as potential customer concerns about reliability, availability, and security are addressed by public cloud providers.”

IBM's New Mainframe Aims For The Clouds

2012-09-08T14:26:00.004-04:00

As you have seen in earlier discussion the mainframe of the only place top get enterprise scale and security. Aivars Lode

What has been will be again, what has been done will be done again; there is nothing new under the sun. - Ecclesiastes 1:9-14 NIV

Back in the early 1990s, the mainframe was considered Zombie Tech. A few old veterans still chugged along, but they were on the endangered species list, more a testament to IBM's (IBM) shortsightedness than a vindication of its business model. Mainframes were big and clunky and they consumed vast amounts of electricity. They took up a tremendous amount of space. The operating systems that ran them were minimalist enough to make Frank Lloyd Wright seethe with envy. They ran as hot as open-hearth furnaces and needed constant ventilation, or the circuit-boards would literally melt. They crashed all the time and required a small army of network engineers to operate them. Bill Gates had learned his way around on a mainframe in high school, but Microsoft (MSFT) never bothered to replicate IBM's achievement. Apple's (AAPL) infamous "1984" commercial wallowed in IBM's perceived stodginess and antiquity. It ran in the third quarter of Super Bowl XVIII, in front of 77.62 million viewers.

Fig. 1: IBM 7094 Mainframe in the early 70s

But IBM kept the mainframe alive, and Big Blue is about to reap a windfall for standing by its proven architecture. With the release of the zEnterprise EC12 line of mainframe servers, IBM is poised to dominate the Data Center market.

Mountains Of Data

The world's hunger for new data is producing mountains of consumer behavioral data as a by-product, which in turn generates new opportunities to profitably exploit. For sectors that routinely generate large amounts of transactional data, it's like sitting on the top of a mountain stuffed with gold deposits but no way to extract it. IBM has spent more than $1 billion at 18 sites worldwide developing the zEnterprise line to provide a solution.

Fig. 2: IBM's New zEnterprise EC12

(click to enlarge)

The zEnterprise EC12 has added capabilities for analyzing Web traffic and corporate databases to predict consumer behavior and quantify business risks. Much of this data is specific to the consumer, which would traditionally make it an ideal target for resale to advertisers. However, from Big Box retailers to casinos, shipping centers, multinational banks, social networks and wholesale e-tailers, the "big data problem" involves high-speed payment transactions.

According to Doug Balog, general manager for IBM System z products, "The heart and soul of the new server is its ability to monitor high-speed transactions and determine if they're genuine."

IBM = Inventing Big Mainframes

IBM is targeting an increasingly receptive market for heavy computing. The mainframe is still the plow-horse for telecommunications, financial systems and nation states due to its security features and stability, as well as its flexibility and the ease with which it can incorporate legacy applications.

Existing IBM customers tend to stick with the company. In 2011, Primerica, a financial services company, purchased its 19th mainframe in 30 years. According to IDC Canada, IBM mainframe revenue in Canada for 2011 doubled that of the previous year.

One of the reasons behind all the enthusiasm is that businesses are recognizing the importance of data centers in cloud computing. Forrester Research's projections for the cloud market 2011-2020 gives a pretty good indication of what all the fuss is about.

Fig 3: Projected Growth Of The Cloud Market

(click to enlarge)Mainframes are a natural fit for cloud centralizing data centers. The mainframe-terminal paradigm was the first "cloud", after all. According toIDC's white paper on the role of cloud computing in job creation, 75% of IT spending is tied up with maintenance of legacy systems and routine upgrades, or "legacy drag." Cloud computing allows IT organizations to shift some of that legacy work to the cloud. By 2015, one of every seven dollars spent on packaged software, server, and storage offerings will be through the public cloud model.

Fig. 4: Cloud-generated Jobs by Sector (IDC)

(click to enlarge)

Bottom Line

For the "old man in the room", IBM appears to be making some very smart positional plays lately. The Kinexa aquisition has given Big Blue one of the largest footprints in the business/social-networking space, and IBM's new server line has the potential to be an even bigger payoff: While mainframes account for only 2% of IBM's sales directly, the service packages and upgrades associated with the mainframe ecosystem account for 25% of IBM's revenue stream and 40% of its profits. The bottom line is that Cloud computing is very good for mainframes, and what's good for mainframes translates to outperformance for IBM.

IBM MAINFRAME - Unofficial Group

2012-09-01T12:32:00.001-04:00

As you can see the discussion group on linked in, the mainframe and its softwares are anything but dead. Aivars Lode Darkstar Cloud

The most popular programming language on mainframe environment is :

posted 1 month ago • 145 votes

Assembler
COBOL
PL/1
Not in list

Vote

Noel Marcos, Marco Serafini like this

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mauro marchetti • i vote for cobol because now can address the pointer and avoid write in assembler program.

is possible address ASCB, TCB, etc. call RACF routine in cobol as IRR* or CALL BPX1*
Unix system services .

3 days ago • Like

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Charles Shorter • Don't get me wrong -- I love REXX -- for automating utilies. But it's not the "high-volume" Transaction Processing language, like COBOL or PL/1, that I need to do large scale zOS DB2/MQ/CICS Performance/Scalability Tuning/Re-engineering of aging business systems, databases, and new applications,

2 days ago • Like

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Nobuyuki Yoshida • I used a lot of REXX, but I understand that REXX was developed primarily for a kind of Operations automation, meaning, it can run other programs, edit files, execute batch files, submit jobs to the Batch, and then gradually it was incremented to become a powerfull language, with each new release bringing more detailed handshaking with the operating system. It should be primarily used to substitute part of JCL use. I used a lot of it in VM/CMS environment, and I miss much of its facilities to process files in CMS. I now am using a product called AutoIT (in Windows environment) that allow me to automate some repetitive processing, like when having to install the same product (let's say, the BR Office or even the MS Office) in hundreds of computers, instead of losing time typing enter and yes and enter and so on ... you can automate the process using it. Besides that, like REXX, it can process files now, and its programming language is as powerful as REXX and complete with interfaces to Windows (even can read and write into Windows Registry). Altought its power and all, its a free product, that's the best part of it.

2 days ago • Like

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Steven Brown • Mauro,

Very, very cool.

You've hit on some very important new features with the IBM COBOL V4.2 compiler. When IBM finally releases CICS TS V5.1 we will start to give COBOL more seamless integration with Java JVM, JNI, JSON, HTML and XML with REST without having to resort to CICS Transaction Gateway to integrate with IBM or Apache HTTP Web Server and WebSphere.

IBM Enterprise COBOL V4.2 is turning into a very cool language and supports OOP's and can share Objects and Methods with Java and Enterprise Java Beans. CICS TS 5.1 will be the first release to start supporting Cloud Computing.

I love REXX/Rexx as well. I've used it with VM/CMS, TSO-E/ISPF/SDSF/PDS-E, Phoenix Software Online Programming and SCM Libraries, and on Windows in lieu of Microsoft's PowerShell. REXX compares very favorably with UNIX/Linux shell scripting languages like POSIX/Korn/Bourne/Bash and the Perl programming language.

The 2002 (4th revision) of COBOL, adopted by ANSI, included many other features beyond object-orientation. IBM included

• National Language support (including but not limited to Unicode support)
• Locale-based processing
• User-defined functions
• Object Oriented Programming
• CALL (and function) prototypes (for compile-time parameter checking)
• Calling conventions to and from non-COBOL languages such as C
• Pointers and syntax for getting and freeing storage
• Support for execution within framework environments such as Microsoft's .NET
• Callable services for Java Native Interface (JNI) for manipulating the COBOL objects of these types in COBOL
• Support for Java (including COBOL Enterprise Java Beans)
• Bit and Boolean support
• True binary specification within the Data Division
• Floating-point support
• Standard arithmetic results
• XML generation and parsing

IBM Enterprise COBOL Compiler Version 4 Release 2 supports

• ISO - ANSI 2002 Standards
• CICS Transaction Server with Command Level Support for DB2, IMS, and DFSMS VSAM.
• CICS Transaction Server support of COBOL processing of XML input and output, as well as, SOAP, REST, and JSON.
• DB2
• IMS
• DFSMS (VSAM)
• Calling conventions to and from non-COBOL languages such as Assembler, C Language, Java, and REXX.
• Processing of XML Input and Output including XML generation and parsing
• Miscellaneous argument types for COBOL and Java
• IBM CICS Transaction Gateway support which provides secure, easy access from Java Client applications to CICS applications, using standard Internet protocols in a range of configurations. It is a robust and scalable complement to a J2EE application server. You can implement it as an e-business connector for IBM WebSphere.

2 days ago • Like

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David Welsh • Rexx all the way.

1 day ago • Like

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David Kramf • Rexx but recently I dream in Ruby

1 day ago • Like

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Ilkka Repo • Yes, REXX is it!

1 day ago • Like

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Ronaldo Braslavsky • Seems that REXX is the BETAMAX of programming languages.

22 hours ago • Like

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Steven Brown • The COBOL programming language had its beginnings in 1959. The Basic programming language appeared around 1964. The C programming language appeared in 1972. Rexx/REXX has been around since 1979. The UNIX Bourne Shell has been around since 1977, with the UNIX Korn Shell appearing around 1983. Perl didn't appear till 1987. Then the Bourne Again Shell or Bash Shell appeared in 1989.

They all have their purposes and implementations. But COBOL and C programming languages have strong ISO and ANSI standards specifications behind them. I don't see any of these programming/scripting languages going away any time soon. But COBOL and C applications have had significant investments made in their use and implementations.

Java has only been around since 1991 and owned by Oracle. Backward compatibility and modularity have not been its strong suits. Therefore upgrades and enhancements have often been costly and have required significant efforts in rewrites and redesigns. But who cares when you have enormous number of inexpensive resources from foreign outsources, and H-1B and L1 visa holders.

14 hours ago • Like

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Charles Shorter • You left out FORTRAN (I coded in '67-68), APL (late '60s), RPG, II, III, etc., and Pascal (late '70s?/early '80s?). Then there's the more proprietary ones like (IBM) Autocoder, (Honeywell) Easycoder, and (NCR) NEAT-3 [National Electronics Autocoder Translator-3]. And PL/C (the "in between" for PL/1 and C/C++. I'm not sure where Algol (+derivatives) and Snobol come in (much less "Cobalt"). (CA) Easytrieve? (Honeywell) BESTOP? And "The Adolesence of P-1". ;-)

Have the H1Bs and L1s even heard of these? COBOL, PL/1, and C are the "survivors".