IBM has launched its newest mainframe system, the z17, designed to manage AI models alongside customer data.

It includes enhanced security features developed with HashiCorp, which IBM recently acquired. This is the first mainframe update since 2022, aligning with IBM’s three-year release cycle.

Unlike cloud-based systems, mainframes are physical hardware owned by customers, giving them more control over their data.

Ric Lewis, IBM’s infrastructure chief, said the industry is moving toward a hybrid model, with some organizations keeping sensitive data on their own servers.

IBM’s physical infrastructure segment, which includes mainframes, brought in US$14 billion last year. The company expects modest growth in this area over the next two years.

🔗 Source: Bloomberg

🧠 Food for thought

A. Mainframes have defied extinction predictions for decades

IBM’s launch of the z17 mainframe represents the latest chapter in a technology that has consistently defied predictions of its demise since the 1990s with the rise of personal computing 1.

Despite numerous forecasts that all corporate data would migrate to cloud providers, the mainframe market is actually growing, projected to increase from $2.09 billion in 2017 to $2.9 billion by 2025, at a compound annual growth rate of 4.3% 2.

The banking, financial services, and insurance (BFSI) sector remains the largest mainframe customer segment, accounting for over 25% of the total market share, demonstrating the continued reliance on these systems for mission-critical transactions 2.

This persistent market presence mirrors IBM’s earlier mainframe evolution, when the company successfully navigated the transition from batch processing to interactive computing in the 1970s, proving its ability to adapt to fundamental computing paradigm shifts 1.

The growth trajectory contradicts the common tech narrative that newer technologies completely replace older ones, instead showing how established technologies often find specialized roles where their unique characteristics provide irreplaceable value.

B. AI-driven hardware renaissance benefiting even legacy systems

The z17’s focus on handling AI workloads reflects a broader industry trend where computational demands of artificial intelligence are revitalizing various hardware segments.

IBM’s strategic enhancement of mainframes to handle AI models with stored data demonstrates how the computational intensity of modern AI is creating new value propositions for processing capabilities that were previously considered outdated.

Recent IBM developments