IBM to Debut New Mainframe in Face of Shrinking Market
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IBM Corporate Headquarters

IBM Corporate Headquarters

On Tuesday, IBM Corp. is supposed to launch the latest iteration of its ever-popular mainframe computer which now comes with security upgrades and data analytics capabilities even as it makes an effort to reduce the steady fall of the company in the current slow state of the market for advanced business computers.

The largest manufacturer of mainframe computers, International Business Machines Corp., is reputed for selling devices that operate using powerful microprocessors designed by their own team. These machines carry a hefty price tag beginning at around $1 million. The company faces tough competition in the market from other high-end servers such as Oracle Corp. and Hewlett Packard Co.

Impact of Change

IBM recently stated it has spent over $1 billion in an attempt to modify the iconic machine, concentrating more on improving their computing power, ability and features.

Most analysts are of the opinion that the existing clients of the company will probably recognize the value of the new upgrades. But Charles King, an analyst associated with technology research organization Pund-IT, offered something of a warning by stating that IBM will face a lot of difficulty in attracting new customers and new prospects for the mainframe.

Representatives for IBM Corp. stated that the corporation has many mainframe computers all around the world, numbering in the thousands. But they did not offer any more details.

The yearly worldwide sales of mainframe computers are projected to fall during this year and every year all through 2016, falling an overall percentage of 14 over the course of 5 years to amount to almost $4.7 billion.

New products with upgrades are expected to begin shipping next month. Sales of mainframe computers usually increase for the duration of a number of quarters following the launch of a product because of pent up demand from consumers who are waiting to get their hands on the newest piece of technology.

Market Forecast

Jeffrey Hewitt, an analyst with Gartner, believes that the current mainframe clients are probably going to go with the technology. The company’s list of clients comprises of financial services corporations, government agencies and other industries that need a lot of computing power, high speed and a great level of reliability for specific tasks including the processing of transactions made by credit cards. He believes that the demand will increase at a steady rate for servers costing less which operate on x86 server chips produced by Intel Corp. and Advanced Micro Devices Inc. Software developers have come up with technology in the last few years that allow companies to put together those servers into groups that can handle a number of different tasks which were once tackled by mainframes.

According to Gartner, there have been projections that sales of x86 servers will increase by almost 10 percent this year alone to amount to almost $39 billion. In the five years leading up to 2016, yearly sales of those x86 server machines will increase by 33 percent to reach a total of $47 billion, which is actually over 10 times the mainframe market.

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