It is proof that the silly season is not confined to politicians when Computergram is reduced to trawling and lunching the IBM watchers. The lunches don’t come free and waistlines are an expanding by-product, but fitting into that figure-hugging Valentino is as nothing compared to getting some copy for the Christmas hiatus. So how do the analysts feel about IBM and the 390 world? Is the Meta Group scaremongering when it forecasts that IBM is going to hike software prices by 25% per annum?

Mainframe is dying

Will ICL offer IBM-compatible hardware and put Amdahl’s nose out of joint? Given the attractions of downsizing and possible demise of the large systems, does it really matter what ICL does in the IBM mainframe arena? If the mainframe is dying, will imaging technology postpone the awful day? And is IBM scheming to re-nter the rental market? Sounds like a load of old soap, but the one thing our experts agree on is that ICL is to marketing what Animal Liberation is to Lucozade. The company has superb technical offerings, splendid manufacturing facilities and fully fledged functions that won’t be available to IBM users for another three years. Problem is, ICL keeps itself to itself, and even if the ownership has changed, company culture is still redolent of the civil service. Bearing this in mind, will ICL market IBM-compatible kit? Opinions diverge here, and some feel that Fujitsu has no reason to turn its face from Amdahl, a highly-successful company with traditionally good margins and a strong salesforce. Also, 1993 is not so far away, and at that point, Fujitsu could increase its minority shareholding in Amdahl. The company is having a difficult year, especially in the UK where there are mutterings of red ink, but if Fujitsu feels that Amdahl is not delivering the goods, increasing its holding by a few percent would give it majority control. But that is a worst case scenario, and most observers feel that so long as the new processors arrive roughly on stream, Amdahl is strong enough to weather the current climate. Nonetheless, some analysts be lieve that while Fujitsu won’t do anything to spike Amdahl’s UK business, it will insist that ICL push IBM-compatible kit. Despite ICL’s reservations about selling IBM-compatible systems – reservations that were all too obvious with the markedly unsuccessful Atlas – there is a feeling that the company will have to overcome its its finer feelings for the sake of cash-flow. British Gas wins are few and far between, much to the relief of Amdahl and IBM. That’s in the short-term, but a more strategic move and one that would put ICL in a very powerful bidding position, would be to enable ICL software to access IBM count key data disks. Such an application, combined with ICL’s fibre optic technology and long-established Sysplex – unlike IBM’s fledgling product would provide ICL with a key to traditional IBM sites, including the lucrative world of banks and financial institutions. So which direction will ICL take? It maintains that its relationship with Fujitsu is an arms-length one – when did Peter Bonfield changed his name to Bonfield-Wilmott? – but merging the two in the sense of taking the best technology from both worlds is much more attractive proposition.

Just what is happening in the mainframe world? – will ICL become a plug-compatible vendor? Will Fujitsu move to take control of Amdahl? Just how will the complex relationship between Fujitsu, ICL and Amdahl turn out? And why is it that IBM’s software pricing is becoming central to the future of the mainframe industry? With a little help from the Meta Group Janice McGinn raises a cynical eyebrow and seizes the festive season to take a long, hard look at the current mainframe scene.

Fujitsu seems to be ramping up to take on IBM in Europe in 1994 and having gambled UKP700m for an 80% share of ICL, it is entitled to demand that ICL contribute to its long-term objectives. Of course, Nippon’s ambitions are not confined to spoiling IBM’s European operations. They are keen to see Japanese software used outside the domestic market,

but so far, penetration has been largely limited to Australia. The traditionalists say the main problem is that the software is written in Kanji. Consequently, if a Rolls Royce or Barclays want to modify the software, they have to call in Fujitsu or Hitachi. However, that restriction may only apply to the high-end users, while those customers with intermediate systems and little need for modifications may find Japanese software an attractive and cheaper alternative. One way of getting the software into users sites would be to include it in systems integration bids, and in that case, both ICL and EDS spring to mind. Alternatively, PR/SM, MDF or LPF could run a Japanese operating system in a partition and applications could be developed on that partition. The idea has still to mature, but one factor that would accelerate the process is IBM’s software pricing strategy. The Meta Group’s Dale Kutnick believes that IBM will increase software prices at 25% per annum, indefinitely. Others say definitely not. IBM has to strike a careful balance between what users accept and what it can get away with. At present there is little or no competition, and it can get away with a lot. Inevitably, IBM will seek maximum increases, but market forces will take over at some point, and it is likely that more competition will emerge in the next few years.

Knock-on effect

Amdahl has entered the fray with UTS and Huron, as have the other plug compatibles with their OSF commitments. Some observers say that 25% per annum is too narrow a forecast, and that it does not take account of new technologies and their knock-on effect. For example, Sysplex demands software billing based on site, not serial numbers, and it just won’t sell if IBM insists on multiple licenses. Also, consolidation and the growth of megacentres, especially in the UK, mean that PR/SM is going to have to become a standard feature. A 4381 user transferring his application to a high-end system will not be happy to pay the high-end software fees, but PR/SM and reasonable usage fees would solve the problem. It is not just greed that prevents IBM from introducing usage fees, PR/SM is a prerequisite and smaller users have yet to adopt partitioning technology. In addition, there are technical problems. PR/SM depends on ESCON since three partitions become expensive and the channel problem untenable. Fibre channels can solve that, but ESCON is only at the rolling-out phase. So, don’t hold your breathe. Usage and site billing are several years away.