Tom Rosamilia – transforming IBM Systems group

I travelled up to London for the UK launch of the z13 mainframe this week. Launching a new mainframe is a very important task for IBM, which provided top rank local and worldwide execs to talk to multiple audiences in London. In the morning we had a chance to discuss the mainframe in-depth and the afternoon attended the launch event for 200 invited customers.

It gave me a chance, along with a few other analysts, to listen to and ask questions of Tom Rosamilia – the head of IBM Systems Group. He joined IBM in 1983 – the same year I began as a research analyst – and has worked with mainframes his whole career. He talked about how the introduction of Linux on the mainframe in 2001 came from an experiment by IBMers in Stuttgart – again, I remember going over to see at the time.

He encouraged us to look forward through new investments to new developments in 2015 – rather than just backwards to the divestments of 2014 – as he continues to transform his group. I know you’ll be interested in what he had to say.

The 5 signature moments

Tom listed 5 key announcements/developments. In particular:

1. The Open Power Foundation – designed to be an ecosystem along the lines of ARM’s – it has grown from 5 to 90 members collaborating on 100 projects; the group now includes 14 separate Chinese companies, giving Power a strong future there; the first third-party Power products are expected to be launched before the middle of this year
2. Little-endian Linux on Power – there are now 1,200 vendors working on this* and a beta version of Red Hat’s Linux distribution is now available
3. Storage is moving to a ‘Software Defined’ model, which will become more apparent at the beginning of March
4. IBM became the number 1 supplier of all flash arrays in terms of capacity shipped according to one research firm
5. z13 has been launched for the global economy with built-in analytics and encryption

Expanding on the new mainframe he noted that in the past customers always had to run analytics on a separate machine, as running it on the mainframe tended to disrupt transaction-processing workloads. Taking advantage of the (up to 3 times) larger memory of the new mainframe, users can now run workloads such as fraud protection as an in-line application.
He thinks Cyber security can no longer be run as a ‘moat and castle’ model, as you ‘can’t keep the bad guys out anymore – it’s more a question of what you do with them once they’ve got in and the new end-to-end encryption built-in to the z13 will help’.

Notes: *’endianism’ describes the byte order of how instructions travel through chips – x86 is ‘little’, while Power has always been ‘big’ until the latest version; making things the same now makes it easier to move applications from one to the other

The CAMSS approach drives modern workloads to the mainframe

Linux on the mainframe brought in new domains – in fact 82 of the top 100 z System users run Linux. IBM predicts that Cloud, Analytics, Mobile, Social and Security (CAMSS) will be new drivers of the mainframe. Tom disagreed with me when I suggested that such solutions could represent a middle ground revenue driver somewhere between the traditional (expensive) and Linux (cheap) workloads: for him it’s not so much about the revenue they generate – more about the new workloads they drive and the mainframe’s relevance to modern computing.

Greater integration between IBM groups

IBM has now created Cloud, Analytics, Commerce and Security units and is encouraging its various divisions to work together – ‘we’re spending a lot more of the time in each other’s offices’, he noted. As a proof point he noted that the advances in analytics on the new machine weren’t just a question of hardware development: IBM software group also spent a lot of time coding the maths licenses into DB2.
The Systems group has integrated a number of middleware offerings such as Websphere, bits of Tivoli, CICS, IMS, BPM, etc. Integration leads to simplification in what has often been a highly siloed company: the Software Group had 82 separate brands and ‘themising’ them has made things easier. The same is true of Watson – it was great in theory, but it wasn’t until IBM had got the research, software and services teams together that it started making sales, doubling the number of customers to around 100.

Offloads help stabilise the Systems business

For Tom the last year has been very busy – starting with the decision to sell System x to Lenovo. He reports that the process is now 99.9% complete and is proud that the industry believes it has worked out well – has been ‘smooth sailing’. Along the way it also decided to move its chip manufacturing to GLOBALFoundries – an important decision to find a reliable supplier in an attempt to stop spending the $600-700m each year on doing fabrication in-house.
As we’ve seen there were lots of signature moments, but he’s also is happy that what was STG has ‘stopped haemorrhaging profits’ and is taking advantage of its alignment with the rest of IBM to continue its transformation.
Alongside the new mainframe he believes the next year will be a good one for the first full year of Power 8 shipments, as Red Hat Linux ships on little-endian machines and Chinese products become available for the first time from the OpenPowerFoundation.

Some conclusions – a good captain for a stormy sea

I believe 2015 will be a pivotal year for the Systems group – the new Power and mainframe products will inevitably improve hardware revenues, reversing the decline in 2014 as customers waited for them. This along with better profitability should give some breathing space to complete the group’s transformation. I’m hoping that there will be no more divestment, that the group will go deeper into workload-optimisation, will simplify its marketing messages and become more agile in addressing new markets.
It was refreshing to hear what Tom had to say. He’s driving positive changes in his group’s strategy and products and active in breaking down the silos within and with other IBM groups. I think he’s a very good captain to steer the business through these stormy seas.