UK Markets closed

IBM Launches New Mainframe Generation to Combat Cybercrime

Olivia Carville

(Bloomberg) -- International Business Machines Corp. is introducing a revamped mainframe server geared to combating cybercrime across public and private cloud services.

Mainframes are the world’s most powerful computers and one of IBM’s signature hardware products. The latest model, called z15, launched Thursday and was designed with extra-secure privacy capabilities to help businesses shift critical data on to multiple cloud networks, known as hybrid cloud.

“We read in the press every day about data breaches that happen because of cybercrime and the fact that our personal information and business information is being stolen and used against us,” said Ross Mauri, general manager of IBM Z, the company’s mainframe program. “This mainframe is specifically designed to completely thwart that.”

Moving data between third parties is often the root cause of privacy breaches, Mauri said. Last year, about 60% of businesses reported they suffered a data breach caused by a vendor or third party, according to research by risk management company Opus and Ponemon Institute.

Through z15, businesses are able to control who can access their data -- and revoke that access at any time. They will also be able to enforce their own internal privacy policies, creating different views of their data for different employees and teams, even if they are using multiple private and public cloud providers, the company said in a statement.

“This has never been done before,” Mauri said. “From the privacy point of view, this is a game changer.”

IBM created the first mainframe computer about 55 years ago. Today they run everything from credit card transactions to airline reservation systems for two thirds of Fortune 100 companies. Each mainframe is custom-built and can cost anywhere from $500,000 to $3 million, depending on a client’s business requirements. On average, IBM upgrades its mainframe Z system every 2 1/2 years.

Mike Chuba, an analyst at Gartner, said IBM was moving beyond introducing its new mainframes as just faster and more efficient computers. Instead, it’s connecting the upgrade to the company’s overall business strategy, he said. “This is a big shift away from the traditional speeds and feeds focus of these announcements,” Chuba said.

IBM is interlocking the z15 to the hybrid cloud, in a bid to boost its $34 billion acquisition of open source software maker Red Hat. After lagging in the cloud market for more than a decade, IBM is pegging its future to a hybrid cloud strategy that will allow it to offer services on companies’ private clouds and also third-party public clouds.

The 108-year-old tech giant has been struggling to adopt cloud-related technologies and has weathered almost seven straight years of shrinking revenue. Mainframe sales make up about 10 percent of IBM’s overall sales, according to a 2018 annual report.

To contact the reporter on this story: Olivia Carville in New York at ocarville1@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Molly Schuetz, Andrew Martin

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.