With System z mainframe revenues down 39 per cent - and MIPS mainframe capacity shipments off 20 percent in the second quarter - IBM is keen on boosting mainframe sales. And it wants to use Linux as a lever.
Commercial Linux distributor Novell has a more than 80 per cent share of Linux revenues on IBM's mainframe platform. The company has been shipping its SUSE Linux Enterprise Server 11 since the end of March, and it wants to get more mainframe shops to add SLES 11 to Integrated Facility for Linux engines.
These are special low-cost 64-bit mainframe engines that use z/VM to partition the engines and manage multiple Linux instances on them. Novell makes a lot more money selling a support contract on a mainframe engine than it does on an x64 or Power server, so it wants to keep pushing SLES 11 hard into mainframe shops.
IBM, Marist College (in upstate New York and near Blue Blue's Poughkeepsie mainframe stomping grounds), and SUSE Linux (the formerly independent German Linux distro that was eaten by Novell in late 2003) worked together on an official Linux port to the mainframe in 1999 and delivered it in 2000. The first enterprise-grade SUSE Linux for the mainframe was delivered with SLES 8 in 2003, including official support at what x86 and x64 shops would call an outrageous price. But it looks like a bargain to mainframe customers used to paying IBM's outrageous monthly license fees for z/OS, z/VM, and z/VSE and their related middleware and database programs.
The word on the street is that Big Blue and commercial Linux distributor Novell are getting ready to announce big price cuts on support contracts for Linux on the mainframe (to help boost sales of IFLs) and for SLES 11 on the mainframe. In addition to pricing, Novell and IBM want to use some new technology that comes in SLES 11 as a lever, hoping to get more companies interested in putting Linux on mainframes in the first place.
Apparently, half of the mainframe shops in the world use Linux in some share or form, according to surveys done by IBM and Novell. (Not just on the mainframe, but on any platform). And both companies - because of the juicy profit margins that come with mainframe Linux support contracts - want to see more big iron running SLES 11.
First, let's talk about a few mainframe-specific features in SLES 11. Novell has added cross-architectural debugging, which allows a System z core dump to be downloaded from a mainframe and analyzed on an x64 server. SLES 11 also allows for mainframe processor cores and memory capacity to be dynamically added and removed from Linux guest operating systems running atop the z/VM hypervisor and the IFL engines.
SLES 11 also gives mainframe shops the disk subsystem performance analysis data and tools for disks attached to mainframes using the SCSI over Fibre Channel protocol. And it has made way fo the z10 engine's inherent NUMA clustering. It can boost Linux performance by scheduling processes to run on engines that are close to the appropriate data sets in the NUMA cluster's cache or main memory. (This is called CPU node affinity).
SLES 11 on the mainframe now supports the large memory pages (1 MB) of the z10 processors, and it has had its IPv4 HiperSocket networking tweaked and IPv6 networking added. The Mono open source .NET/C# runtime environment also runs on mainframes and is supported for the first time in SLES 11 (This is true across all server platforms where SLES 11 runs).
The pricing deal
Now, the pricing deal that is in the works. The basic license cost for SLES 11 (and any SLES release for that matter) on IBM mainframes is $11,999 per engine for a one-year contract. That gets you installation support and Web support thereafter. A standard 9x5 business hour contract with human beings providing support for a year costs $15,000 per engine, and for premium 24x7 support, it costs $18,000. With this impending promotion, basic SLES 11 support prices per mainframe engine are being cut 40 per cent to $7,199, standard support is being cut 32 per cent to $10,200, and premium support is being cut 27 per cent to $13,200.
If mainframe shops want to save some additional bucks after that, they can get a three-year support contract at 35 per cent of list and a five-year contract at 47 per cent off list. This can be some pretty substantial savings. A five-year SLES 11 premium support contract runs $44,999 per engine after the discount, which works out to $9,000 per engine. This promotion will be offered on the midrange System z10 BC mainframes (that's short for Business Class, and offering from 1 to 5 mainframe engines), not the full-blown z10 EC machines (short for Enterprise Class, and spanning from 12 to 64 engines). This promotion will run until December 31, apparently. It is not clear when it will be launched, but probably this week or next.
According to a presentation from Novell covering the promotion, the company has over 1,300 customers running Linux on IBM with over 4,000 IFLs using one version of SUSE Linux or another. In 2007, which apparently was a bumper year, Novell's Linux was plunked down on 1,700 mainframe engines. At around $100,000 per mainframe engine, that would have accounted for about $170m in mainframe revenues for IBM just for the engine cores alone, not counting memory, peripherals, support, database, middleware software licenses, and so on.
While all of this discounting is good news for mainframe shops - who apparently can push utilization on the mainframe engines up to 70 or 80 percent running Linux, according to Novell - SUSE Linux on x64 iron is priced based on the system level, not the core level as it is on a mainframe. A basic one-year support contract costs a piddling $349. A standard contract on x64 iron costs $799 per year per system, and the premium support costs $1,499. Licenses for support for Itanium and Power servers are priced by Novell at the socket level and cost $750 per socket for a basic contract for a year, with a standard contract costing $850 and a premium contract costing $1,000.
Let's do some math just for fun. On a five-core z10 BC mainframe, even with the discount deal that IBM and Novell will announce, you're talking $66,000 for one year if premium support. That is a little bit more dough than it would cost to get the same level of hand-holding for SLES 11 running on two whole Power 595 machines with 128 cores. Now, if you want to get a really crazy comparison, look at what it would cost for premium support on a 96-core "Dunnington" Xeon 7400-based server.
At $1,499 per year, that's 44 servers, or 4,224 cores, of processing capacity compared to the cost of supporting those five mainframe engines. Even if you only want to compare to a two-socket server to be more fair to the mainframe, you can get eight Xeon Nehalem EP cores and twelve Istanbul Opteron cores into a single box today, which works out to either 352 or 528 x64 cores for the same $66,000 as it takes to support five mainframe engines for a year.
That is just an utterly embarrassing price disparity, no matter how good z/VM partitioning is. Proving once again that a monopoly is a terrible thing - unless you happen to own one.
Bootnote: After this story ran, Novell contacted El Reg to say that the mainframe Linux support discounts for SUSE Linux were actually announced in October 2008 and were set to expire at the end of 2009. And the extended support contract (which gives customers five years for the price of three or three years for the price of two) was originally announced in April 2008 and was set to expire on July 31, but was extended recently to December 31, 2009. ®