Yale honors the “Queen of Software,” the late Grace Hopper, in renaming Calhoun College as Grace Hopper College. Hopper worked on the Harvard Mark I, and she was a programming language pioneer. She invented the first compiler, and she had a tremendous role in the development and standardization of the COmmon Business Oriented Language (COBOL). She also helped educate and inform generations of IT professionals and the general public about how computers work (and should work).

Congratulations, Admiral!

IBM’s latest earnings report contains some great news: IBM z Systems had yet another strong quarter. I love to see that result, and (in my view) so should everyone in the industry who cares about systems innovation. Mainframes are where the future begins, and the future continues to look bright based on these results.

Please note that one must not give too much weight to this single financial result. The mainframe ecosystem is much larger and more complex than the revenue number that IBM reports for their IBM z System (and LinuxONE) machines suggests. The ecosystem includes IBM and non-IBM operating systems, middleware, tools, applications, services (including education and training), and financing, as examples. Also, the IBM z Systems revenue number is cyclical. A single quarter does not make a trend, much less an arc of history.

As background, IBM started shipping the IBM z13 model in March, 2015 (1Q2015) and the IBM z13s model in March, 2016 (1Q2016). Their LinuxONE Emperor and Rockhopper cousins started shipping in the same quarters, with the Emperor maybe one month earlier. The 4Q2016 revenue number is compared to the year ago quarter, to 4Q2015. It should have been a relatively “tough compare.” Yet IBM reported a +4% z System revenue increase. Outstanding.

IBM’s CFO provided a bit of “color” to explain that result: margins were up, and “new workloads” figured prominently in the win column. Margin improvement is predictable to some degree. When IBM starts shipping a new model, its assembly plants ship lots of physical machines with processors and other components. Physical goods always have real costs. Later on, the emphasis shifts to machine upgrades that involve shipping fewer physical components. In many cases mainframe customers at least tentatively committed to those upgrades back when they purchased their original machines (new or as hardware model upgrades), but IBM cannot book upgrade revenue until an upgrade is in place. Thus it’s reasonable to expect cyclical variation in profit margins. The 4Q2016 margin contribution was at least potent enough that it lifted the whole IBM Systems division’s profitability. (IBM Power Servers and Storage had a tough revenue quarter, unfortunately. Probably for cyclical reasons, though.)

“New workloads” is even better news. Although variable and cyclical, it’s reasonable to expect that mainframe customers’ existing applications and databases will grow at some pace along with digitization of the global economy. As a notable example, when the world is inexorably moving from paper and coin cash transactions to plastic and smartphone electronic transactions, the world’s electronic payment systems (heavily mainframe-based for entirely sensible reasons) will rise to meet the demand. That’s terrific, and what’s even more terrific is the addition of new applications and new information systems to those machines, and brand new customers joining the mainframe community. “New workloads” is shorthand for this phenomenon, the “horizontal” growth. Examples include blockchain technologies. IBM is betting heavily on blockchain, and in 2016 IBM introduced its High Security Business Network for Blockchain, publicly available through the IBM Bluemix cloud and run on IBM LinuxONE Emperor servers. LinuxONE and z System customers can also run blockchain technologies on their own machines, and many are. IBM is a member of the Linux Foundation promoting Hyperledger blockchain technologies, and the Hyperledger code is available as open source to everyone, including to mainframe customers. There is widespread industry agreement that blockchain technology solutions will not succeed unless they have the best security controls. The cryptographic math is well proven, but protecting the “rear flanks” of those blockchain solutions is the key (pun intended). IBM LinuxONE and z System servers handle that defensive part of the equation brilliantly, and that’s one part of the “new workload” story.

So, to sum up, mainframes keep expanding and growing, multidimensionally. Bravo.

Turning to IBM’s overall results for a moment, IBM is clearly a profitable, going concern. A couple decades ago there were some doubts about that, but not since, and not now. However, overall revenue was down 1%. IBM is still correcting course to change that minus sign to a plus sign. IBM’s investments in cognitive solutions, security, cloud (especially in hybrid clouds), and other areas are looking good so far. They’re all highly mainframe relevant, by the way.

Welcome to 2017.

Posted in IBM.

Make that a few mainframes for Yahoo! At least 500 million accounts were breached. In terms of number of accounts, Yahoo! has likely set a record for the biggest data breach of all time. (So far.)

If that’s not bad enough, it gets worse: Yahoo! reportedly did not tell its suitor, Verizon, about the data breach until at least two months after Yahoo!’s management found out — and only two days ago. In July Verizon agreed to acquire Yahoo! for $4.83 billion. Verizon might be able to pull out of the deal if it wishes.

Mainframes are widely recognized in the IT industry as the most securable platform. My “(Blank) Needs a Mainframe” series of periodic posts is a reminder that the IT community continues to fail at security, and that mainframes should form part of a holistic answer to fix this massive, growing, industry-wide failure.

This series of posts also reminds the mainframe community to be more vigilant than ever, not to assume that your mainframe environment is invulnerable. I recommend “healthy paranoia.” Every IBM mainframe ships with incredible security capabilities, many enabled by default, and more are optionally available. However, IT teams must know what they’re doing, must stay abreast of developments and technologies, and must competently operate their systems based on the latest information. And here’s a special reminder to CEOs, CFOs, and Chief Risk Officers: if you’re not caring for and investing in your workforce, you are significantly raising the risk of being the next victim of a security breach. “You get what you pay for,” including IT talent (or lack thereof).

Please be careful out there.