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The Custer connection.

IBM's mainframe business saw its revenues fall by nearly a third in 1993, with a further 50 percent decline expected by next year. Lou Gerstner, IBM's chairman, made a final attempt on April 5 to salvage the product line by introducing the new System/390 mainframes, which are based on “parallel-pro...

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Published in:Economist Vol. 331; pp. 69 - 71
Format: Article
Published: Economist Newspaper Limited 5/7/1994
Online Access:View this record in EBSCOhost
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      ab: IBM's mainframe business saw its revenues fall by nearly a third in 1993, with a further 50 percent decline expected by next year. Lou Gerstner, IBM's chairman, made a final attempt on April 5 to salvage the product line by introducing the new System/390 mainframes, which are based on “parallel-processing” technology. Rather than using costly, custom-made processors, parallel computers rely on many inexpensive, mass-produced microprocessors working together. Although competitors manufacture similar systems, they still lack IBM's “coupling technology,” which links the new parallel computers seamlessly to older mainframes. IBM is also changing the way it charges customers for the mainframe software. These new strategies and technologies should at the very least defend IBM's share of the big-computer market. However, Gerstner's hopes of attracting a new breed of customer to mainframes are unlikely to materialize.
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