SSE.LT

Over 80% of the world’s corporate and government data resides on mainframes.  Over $5 trillion worth of corporate application and data assets rely on its mainframes today.  Almost 95% of Fortune 1000 companies use its  Information Management System (IMS) for their most critical data management needs. More than 50 billion transactions—including financial ATM sessions, healthcare record access, tax accounts and other critical information—are running through IMS databases on a daily basis.

All these statements refer to IBM – worldwide data manager with an absolute market power.  Most essential global information is directly or indirectly controlled by IBM. Summary of the Computer & Communications Industry Association’s report follows.

IBM commercial at first:

Mainframes – are basically supercomputers used to process large scale data used by big corporations, governments, hedge funds and scientists. IBM holds a leading position in the market due to several things. First of all, IBM as the largest patent holder in the world, uses its legal benefit to either limit access of other companies to the market or require regular fees from competitors which makes it economically inefficient to sell your own servers. Secondly, it refuses to sell its software to be installed on third parties servers, creating customers lock-in. Besides, its software can not be used on other machines. Thirdly, IBM acquires its competitors. For instance, Platform Solutions. Fourhtly, that’s the size of the market and prisoner’s dilemma. Since everybody buys IBM, one should buy it either to render information faster than your rivals, or to obtain the same advantage as your rivals. As long all companies believe IBM mainframe will increase their profitability, everybody will buy it. In total, nobody but IBM benefits.

As a result, “the price for 1GB of mainframe memory is approximately $6,000 while the price for 1GB of memory for Intel or AMD based servers running Linux or Windows is less than $100″. Are you still concerned about Windows OS dominance of your PC?

Interestingly, would quantitative-research-loving hedge funds and major high frequency traders like to buy IBM mainframe to frontrun the market?  Or Goldman Sachs and co is not involved in that?.. I believe one’s power and another’s tools could be united in a perfect money making instrument. Good for them.