IBM Rolls Out Cheaper Mainframe for Small Businesses

Hoping to expand the market for its signature piece of hardware, IBM Corp. (IBM) is rolling out a less expensive version of its top mainframe computer Thursday.

While IBM's top-of-the-line z9 mainframes cost $1 million and up — for banks, government agencies and other big organizations to handle complex computing tasks — the new "Business Class" of the z9 will be aimed at smaller companies, with a starting price of $100,000.

The less expensive version is designed to perform traditional mainframe tasks, such as encrypting data and processing transactions, though it will not be able to handle as much work as the top-tier z9s.

IBM chose to launch the new mainframe at an event in China because the company believes that market has the kinds of fast-growing companies that could use mainframe-level power without having millions to invest in the machines.

IBM also planned to announce a new mainframe development lab in Shanghai.

With low-end "blades" and other inexpensive servers becoming increasingly powerful, IBM has been working to keep mainframes attractive by expanding the ways customers can use the machines.

In its first-quarter results released last week, IBM said mainframe revenue dropped 6 percent because of price enticements aimed at encouraging customers to use mainframes to run less-complex software, such as Linux and Java.