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IBM's z9 mainframe -- worth $1 billion?

Marc Perton

old ibm mainframesIBM may have ditched its PC division, but that doesn't mean the company's abandoned the computer business. In fact, the company has just launched its latest mainframe, the z9, developed at a cost of $1 billion over the past three years. While some might argue that IBM has it backwards — that the company should have abandoned the hulking mainframes and stayed with PCs — the company is just following the money: PCs have become low-margin, commodity products. Mainframes, meanwhile, remain cash cows, since they generate lucrative software and maintenance contracts. Of course, not too many companies are all that interested in buying mainframes anymore — but at up to $1 million a pop, IBM doesn't need to sell too many of them. And if the market shrinks any further, we're sure the company can find someone to pick up what's left of its mainframe biz.

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