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Comment by jacquesm | Hacker News Reader

Any bets on whether IBM will be able to keep afloat until 2035?

They're still big but they keep making one unforced error after another. One surefire way to get your customers to research the competition is by such immense price changes. This sort of thing is done gradually unless you are trying to get rid of a certain segment of your customers. Which may well be the case, but if it isn't they have a problem, and regardless you can't really predict how many of the customers you wanted to keep will leave as well. And that's before we get into reputation damage.

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They have ironclad contracts with the DoD and other government organizations, and with the way those processes work if every person from the president to the peon decided they wanted to move everything off of IBM and were going to move heaven and earth to do it. They wouldn't even be able to start entertaining bids from other competitors until 2035.

Beyond this IBM's core competency is winning government contracts, a niche very few other people have the desire or the resources, or the proper understanding of the necronomicon to enter.

Now that you mention it. Isn’t the brand new FedNow program built using mainframe tech?

Shit man, IBM will live on for centuries (assuming we get that far)

Mainframes are technologically pretty interesting just wrapped in IBM poison

You are not forced to use the "poison" - you can get them as LinuxONE machines and run everything on top of a very thin hypervisor (which is necessary, since nothing runs on bare metal on the newer machines).

Am I not then throwing away all the cool stuff that makes them unique?

The poison I'm referring to is the IBM bean counters and lock-in not the software

AFAIK, the LinuxONE boxes come without lock-in - what you pay for is what you get and there aren't any monthly subscriptions as there are with z/OS and the various pay-as-you-go features (besides, of course, the maintenance contract you WILL want to have for a multi-million dollar machine that uses mostly bespoke hardware).

Am I wrong?

The FRB moved the last of its major services off of the mainframe around 2017 I believe. It does use MQ as an interface.

Don’t dismiss the possibility of IBM getting bought out for those easy cash flow government contracts. Someone like Amazon or Oracle could potentially goggle them up in 5-7 years when their stock price grows and IBM’s stagnates or drops.

I have a feeling US regulators wouldn't look too favorably on any IaaS mergers. Not to say it couldn't be done, but there would most likely be pretty high regulatory hurdles if any 2 major public cloud providers propose a merger or buy out

Full disclosure, IBM Systems employee here. I honestly think the server and mainframe development will remain regardless of what else happens. There's a niche between linux x86 box and supercomputer that won't likely disappear.

But half the top supercomputers are a cluster of Linux x86 boxes, and the other half are Linux on some other architecture.

I think it's not accurate to call their architecture a cluster of machines. Either way I'm not referring to Linux as an OS - it is really the only choice for enterprise scale computing.

Regardless of what architectures supercomputers use, their use cases are different from that of server/mainframe high performance compute. 8 cores with on-chip AI acceleration running at 5GHz sharing virtual cache, using ~256GB-1TB of of RAM at ~76-304Gbps transfer speed is something a major bank would use. It won't cut it for SoTA atmospheric modeling, molecular modeling, or something like rapid computational chemistry search space exploration. What it excels at is the ability to handle a blazing number of "ordinary" and AI inferenced transactions per second. Then there's the SAP HANA where entire workloads have data fully stored in the gargantuan RAM.

Could I be neglecting to foresee certain trends in technology or industry? Perhaps. What I'm doing here is highlighting that the current niche is well served by POWER and Z. I don't see the current users switching entirely to Cloud - that ship sailed 5 years ago.

Good points. Essentially Linux is the delivery mechanism for the power potential of the mainframes so that Linux is a convenience and not a sign that the tables are turning. It also helps to be able to run a mountain of software without having to develop it first for some proprietary OS. This is where the big difference between transaction processing software and massive parallel problems such as simulations lies. A bank doesn't need a supercomputer, it needs a reliable and scalable transaction processor.

Off topic, and I'm sure you are not in a position to comment, but I find the 'Watson' marketing ploy a massive turn-off, it is so tone-deaf that I really don't understand why they keep pushing it so hard.

I'll be honest I haven't seeked out how Watson X is being projected externally, and don't know much about the details internally - it's being driven by a different division of the company. So even if I were in the position to comment, I don't believe I have anything meaningful to say there.

You touched on a point I meant to add - reliability. Something that sets the Z mainframe apart from the Power server is the unyielding quest for absolutely no downtime (in exchange for compromise in raw compute/memory per drawer vs Power). I believe the quoted number is 3 seconds per year maximum. Because having huge throughput is well and good for business, but lost transactions could really strike at the bottom line with an unpredictable ripple effect. And in the case that a network of major hospitals is using the mainframe - no downtime could potentially save lives.

Exactly. I worked for a bank (using IBM hardware, as well as Sperry) in the good old days and back then the reliability factor is what drove each and every major purchase. Tandem made their whole business case around that. When the computers and the IT department surrounding them are a small rounding error on the total budget of your organization it makes sense to go for a solution like that and I guess there will always be customers that need that. Consider me convinced: IBM will still be around in 2035, or at least, the mainframe division will be. It also puts their RedHat acquisition in a different light, so thank you for that bit of insight.

Not IBM employee nor Shareholder but Agree. And even if they may disappear, it is obviously not before 2035. I am even willing to bet not even 2045.

People asking these questions obviously have zero idea of IBM's mainframe and server business. May be it is worth mentioning, as little as 5 - 6 years ago more than half of HN have never heard of SAP.

I actually agree with you, but there are too many applications using mainframes that shouldn't be. Processing FAFSA for instance.

IBM has a GSA contract, so they'll never fail.

Like Lowes. Home Depot might go out of business if the market crashes hard enough, but Lowes is protected as they're a GSA contractor. The Federal government will never let them fail. Too essential.

Many businesses have GSA Schedule contracts but most of them don’t get much business. For many, it’s not even worth the cost to obtain them.

For me, IBM is a quantum play supported by legacy mainframe business. Probably not long for this world, but if their quantum system 2 announcement actually goes well, hype may serve diligent investors well.

Meh, if you've been following their day to day business, mainframes are just one part.

IBM now is primarily a big IT consulting business (think Java, not zOS), one of those semi garbage shops like HP Consulting, Oracle Consulting, TCS, etc.

They're a 2nd or 3rd tier company as far as job quality and compensation is concerned.

I wouldn't worry about them, these companies will probably outlive the both of us.

Turning quantum into a business model that is not only self-sustaining but at the level of profitability of IBM's legacy business... that's a big ask for even the most agile company with the best technologists in the world. And if they internally knew their Quantum System 2 was game-changing - why do this desperate move in their cloud business?

> that's a big ask

If practical quantum does pan out, it will make this current AI situation look insignificant by comparison. It may also become extremely synergistic with the current AI movement. Quantum search will allow for us to seek out global minima across gigantic parameter sets.

> why do this desperate move in their cloud business?

Everyone is jacking up their prices. Microsoft would have to triple our cost before we'd think about tearing up our tech stack and moving again.

> Quantum search will allow for us to seek out global minima across gigantic parameter sets.

Just like pouring water on the floor will find the global minima on it. Just wait until there is one puddle left. O(1).

I am yet to be convinced quantum computers are real at all and not just some slow convoluted variant of an analogue computer.

Pouring water on the floor is probably a pretty good example of finding a local minima

If the floor is the surface you are interested in and if you're not in space...

It's gravity that does the sorting for you, if you want to do this in space at a minimum you will have to have a spinning container and the surface you're interested in had better be the floor.

There's a significant gap of engineering effort between practical quantum at the scale of "rent time on the small handful of systems in the world that can do this" vs. at the scale of "anyone can rent or buy hardware to do this at scale."

IBM may possibly be able to recoup their investment in quantum by whale-hunting with the former (and certainly some of the crypto-breaking characteristics will make that quite lucrative to sell to state-level agencies), but it will likely be decades before every company in the world is asking the question "how can quantum help us" the way they are with generative AI.

I doubt global maxima are meaningfully different than the local maxima achieved today tbh. Especially considering the effort to avoid overfitting.

You’ve hit the nail on the head here, imho. The people running these clouds aren’t fools. Prices will absolutely continue to rise.

Because they can. Moving workloads likely too hard.

Without a problem, because HNers keep ignoring the whole set of services, patent records per year, R&D being done, its domain across Java, mainframe, micros, being the only UNIX that survived Linux, being one of the major Linux backers, being the main GCC driver while clang lags behind while Apple/Google backed away and everyone else enjoys its license, the xl toolchain used in some supercomputers...

They will be, their mainframe business is still pretty central to all things banking related. And I'm pretty airlines use them for critical services as well.

From a financial perspective IBM's model of buying up customer's by taking over smaller successfull outfits, maximizing profit's while the quality goes down the drain and using that profit to restart the process have actually been successful enough over the last 2 decades since they switched from being an engineering company to an capital fund with a tech focus.

This is probably just the same strategy ie IBM might have realized that their cloud department is as popular as it will ever be and is now entering the squaze phase of it's lifecycle.

The company will be around, but it might only be in the form of a patent portfolio and government contractor. No telling if the government contractor will have their own data centers or resell other clouds.

IBM is over 100 years old and will be around for another 100.

(Fortune 100 here) We're using their mediocre products and services and keep outsourcing even more crap to them!

By 2035, we will all be afloat.

I just hope they won't end up selling RedHat to MS in few years...

Would MS-owned RedHat be worse than IBM-owned RedHat?

I'd give it 99% chance to be worse.

Absolutely.

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