IBM unveils faster, smaller mainframe

IBM 1401 The mainframe has been a staple of bigger businesses for decades

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IBM has unveiled a mainframe computer it hopes will help head off competition from lower cost PC-based servers.

It said the zEnterprise EC12 had cost $1bn (£633m) to develop, producing a machine with processing cores 25% more powerful than earlier models.

The re-designed machine also had better security and data-analytics tools than older models, said IBM.

The launch comes at a time when, analysts say, the mainframe market is experiencing a long-term decline.

IBM is by far the biggest seller of mainframes and the machines remain popular with big banks and other organisations that use the large computers for their heavy data-processing needs.

Prices for a basic mainframe, which are based around IBM's own silicon chips, start at about $1m (£633,000).

Improvements to security, speed and processing power would keep existing customers happy but were unlikely to win IBM new clients, said analysts.

"It's going to be harder and harder for IBM to find new customers and new opportunities for the mainframe," said Charles King, an analyst with research firm Pund-IT.

Rather than buy a mainframe, many companies now rely on banks of cheap PC-based servers for their number-crunching needs.

IBM said it would start shipping zEnterprise EC12 computers to customers in September.

Market-research firm Gartner said the mainframe market was seeing a long-term decline.

It estimated that annual sales would fall in 2012 and keep falling every year until at least 2016.

During that five year period the market would shrink by 14%, it said.

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