RE: NY Times Reports "Little Blue "- IBM to Offer Smaller Versio n Of Its Mainframe Computer

I may be the only person thinking this, but isn't this new 'smaller
Mainframe' going to cut into new System I sales?

======================

Larry Ketzes
Senior Security Project Analyst
American Life Insurance Company

One ALICO Plaza
600 King Street
Wilmington, DE 19801
Phone: 302-594-2146
Mobile: 302-559-1631
Email: larry.ketzes@xxxxxxx

-----Original Message-----
From: midrange-l-bounces@xxxxxxxxxxxx
[mailto:midrange-l-bounces@xxxxxxxxxxxx] On Behalf Of Glenn Ericson
Sent: Thursday, April 27, 2006 6:53 AM
To: MIDRANGE-L@xxxxxxxxxxxx
Subject: NY Times Reports "Little Blue "- IBM to Offer Smaller Version Of
Its Mainframe Computer



Financial News
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Updated 12:01 AM ET April 27, 2006

IBM to Offer Smaller Version Of Its Mainframe Computer

By Charles Forelle

Call it Little Blue.

<http://www.smartmoney.com/att/eqsnaps/index.cfm?story=snapshot&symbol=ibm>I
nternational 
Business Machines Corp. will soon begin selling a 
junior version of its flagship mainframe 
computer, pitching the machine at small and 
medium-size businesses concerned about the 
security and reliability of lower-cost servers.

The economy model, called the z9 Business Class, 
will start at $100,000, well below the 
quarter-million-dollar figure that is a typical mainframe starting point.

The move, expected to be announced today in 
Beijing, represents an effort to extend the life 
of the venerable machine, whose lineage goes back 
more than four decades. The mainframe, though 
less central to Big Blue than it was in eras 
past, remains a substantial source of profit, 
since the pricey machines have few competitors. 
Sales of mainframes also drag in other business, 
such as software and services needed to set them up.

<http://www.smartmoney.com/att/eqsnaps/index.cfm?story=snapshot&symbol=Stall
ings, 
Jim>Jim Stallings, IBM's general manager for the 
mainframe unit, said the announcement is a 
"statement that long term," the mainframe "is a growth platform."

The mainframe, once derided as ancient and 
obsolete, is alive and kicking, if not flying out 
the door. Sales have been up and down: They rose 
15% from 2003 to 2004, then fell 8% from 2004 to 
2005, IBM said, though it doesn't disclose precise figures.

The big machines were long aimed at financial 
institutions and government agencies that value 
them for their tight security and heavy-duty 
processing horsepower. But in recent years they 
have taken on nimbler tasks. IBM has designed 
special modules that allow users to run the free 
Linux operating system on the mainframe, as well 
as applications based on Java software technology 
that is popular for Web-based programs. At the 
same time, IBM's competitors have tried to lure 
longtime mainframe users to cheaper machines.

But sales of the special Java and Linux modules 
have been growing, Mr. Stallings said, indicating 
that some companies are devoting mainframe space 
to tasks that once ran on low-cost servers.

Write to Charles Forelle at charles.forelle@xxxxxxx

Copyright (c) 2006 Dow Jones & Com