back to article IBM continues to squeeze blue blood from IT stones

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 …


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  1. Anonymous Coward

    Chicken or the egg?

    "...that is only allowed to run Linux or Java or DB2..."


    "...that is only allowed to run Operating Sytem or Programming Language or Database..."

    I don't know much about mainframes, but how exactly do you run Java or DB2 independently?

    1. Anonymous Coward
      Anonymous Coward

      Re: Chicken or the egg?

      It's a licensing thing. The physical CPUs are identical, but it's a lot cheaper to run zLinux on a CPU than it is to run z/OS. Yes, it's weird. Yes, it doesn't make much logical sense, but this is how IBM is able to gouge a continued solid revenue from the mainframe.

      1. ScottME

        Re: Chicken or the egg?

        The logic is supply and demand. You can run Unix on just about any hardware vendor's kit, so there's no way anyone would choose to run it on a mainframe unless doing so was price-competitive. However the only readily available hardware that will run z/OS is an IBM mainframe CPU, so IBM can charge what it likes for that.

  2. Anonymous Coward
    Anonymous Coward


    "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."

    As someone who went to bed one day as part of GBS and woke up supposedly as GTS (in ITS... I think? now even my managers are certain!) I can only wholeheartedly and resignedly agree.

    (obviously AC in this case)

    1. Anonymous Coward
      Anonymous Coward

      Re: GBS? GTS? ITS? WTF?

      Me too. I probably know you :-)

      What gets me is that they all seems to have to compete with one another, fighting for revenue. Daft.

  3. AndyZos_AIX

    Under zos the processors will only be used to execute specific instructions related to db2 or java workloads. Ziip and zaap. Therefore license charges for these processors are charged at a reduced rate.

    1. Anonymous Coward
      Anonymous Coward

      ZiIIPs (z Integrated Information Processor) and zAAPs (z Application Assist Processor) are a wee bit more interesting than that. They (and other speciality processors) are a device to prevent a chicken and egg situation created by the pricing strategies used by IBM and other mainframe software vendors, which is typically based on installed processing capacity. They (IBM et al) want to sell you software, but that software, especially if it does something very useful, will use up processing power. Bearing in mind that a competently-run mainframe will be trundling along at pretty much close to 100% capacity 24/7, adding new software will potentially require a customer to increase the processing capacity of their machine(s), which in turn increases the licensing costs for the software installed, which... well, you get the picture. Not the easiest sell.

      Enter the zAAP. This essentially runs JVM-based workloads (not noted for their processor-friendliness), costs less to install/enable than a general-purpose CPU, but more importantly, does not count towards the installed processing capacity and thus incur increased licensing costs. This was obviously considered a good solution to the chicken-egg thing, because IBM then introduced the zIIP, which can (mostly) be considered a proper general-purpose processor, but the basic principle is that zIIPs and zAAPs are a cheap (in context) way to relieve capacity constraints without incurring extra software licensing costs.

      Contrary to the previous poster's assertion that zIIPs can only execute specific instructions, rather they can only be used for specific workloads, using software which is specifically written to take advantage of them. IBM's DB2, for example, will use a zIIP, if available, for distributed queries (i.e. from other machines), no doubt to swallow the overhead of converting EBCDIC to Unicode, and for the building of indexes. Other vendors, if they are competent, will increasingly take advantage too. There are quite a few hoops to jump through though, and for a number of other reasons it is more or less unlikely that a customer would be able to run their normal application processing on a zIIP. Neon Software offered a product some time ago which promised to do just that and got jumped on heavily by IBM for their trouble, but as a device for taking the overhead of running system software (lucrative to IBM and ISVs) out of the capacity/cost equation, they seem to becoming rather popular.

  4. Allison Park

    Compare IBM to HP

    I wish I owned IBM stock. I bought some HP right after the stock got crushed from the Autonomy writedown.

    Since 2006, HP has taken $26.1 billion in "restructuring charges, goodwill writedowns, and merger-related expenses," according to Rolfe Winkler of The Wall Street Journal. The company's current market cap is $23.5 billion. So in six years flat, more money was destroyed on overpriced, ill-conceived acquisitions than the entire 73-year-old company is worth today.

    1. Man Mountain

      Re: Compare IBM to HP

      But would you have made 25% in the space of a few weeks which is what I've just done on my HP stock (which I also bought at the post-Autonomy news slump). Buying a load of HP stock at sub 13 was a right touch!

  5. Allison Park


    Got mine at sub $12....but i still would not buy their gear. Even the touchpad which i bought for $100 i gave away

    1. Man Mountain

      Re: yes

      Shows how astute you are then as you could have made a profit on that!

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