IBM says its mainframe customers can save money by moving portions of their work from general purpose processors to specialty engines. Until recently, this helped some customers shave their software bills. But now there's a software company that claims it can do what IBM says is possible in a very big way. The company is called Neon Enterprise Software, based in Sugar Land, Texas, and its shape-shifting product is called zPrime.
Neon isn't making specific cost reduction claims, at least not publicly. But industry gossip suggests that it might be be possible for users to cut their software costs by a quarter to a half. We know of one respected mainframe expert who thinks zPrime could cut some customers' bills by more than 75 percent (although we remain skeptical). Whether the savings is one quarter or three, Neon's software could have a huge impact on IBM's mainframe software and hardware revenue. In addition, zPrime could radically reduce the cost of providing services. If IBM doesn't pass along potential hardware and software savings to its services customers others, such as HP or Dell, could clean IBM's clock wherever there is a competitive opportunity.
IBM has already come up with a scare letter to warn prospective users of zPrime that it won't take kindly to anyone who doesn't stick to the rules governing the use of IBM's Ziip and Zaap engines. Neon reportedly said it studied the rules (with the help of some smart lawyers) and that it's playing fair and square no matter what IBM says.
If recent history is any guide, IBM might try to crush Neon in the courts if it can't beat the company in the marketplace. But unlike Big Blue's other mainframe rivals, such as PSI, T3 and Fundamental Software, Neon is not a pissant. Quite the opposite. Neon's main backer is John Moores. Mr. Moores is a big player in technology and in professional sports. He is the boss of the San Diego Padres and has property overlooking the Pebble Beach golf course. He was the M in BMC, which he founded. But the most big leage fact about Moores is that he chairs the Carter Center, a job he took as President Jimmy Carter eases toward retirement.
Basically, John Moores seems like the kind of person who knows how to pick winners avoid losers. He is, at the moment, IBM's most daunting competitor. The only mitigating factor might be that Moores is above all else practical. If IBM buys Neon in order to kill it, as it did with PSI, the price could be pretty big but Moores is unlikely to say no. Moores just doesn't seem like the kind of person to hang onto the company out of pride and against all he has learned in business over the years.
Interested users must understand that there are limits to what zPrime can do. Neon's product doesn't work on all mainframes. It only works with current and recent z/OS on current or recent hardware. But it will work on mainframes that have tiny (and thus relatively inexpensive) general purpose engines along with Ziip and Zaap engines that always run at full speed. And for mainframe shops trying to trim their costs, the really crusty old legacy work they run on new engines can always be farmed out to services companies that run older and therefore cheaper mainframes that provide the kind of hardware a lot of that legacy stuff was written to work with in the first place.
We haven't heard the last from IBM on this matter of course. But it's safe to say that even now every mainframe shop that has taken a look a zPrime seems to be impressed. If these shops worry about IBM's revenge, that, took, is a tribute to John Moores' killer software, where the thing that could be killed is IBM's bottom line.
