The iSeries and the Right App Deal a Blow to Unisys

by Dan Burger

As proponents of the iSeries, we often wonder what IBM is doing to introduce this box to new customers. Well, here is a good example, an opportunity for Big Blue to point to the iSeries and note that in head-to-head competition it is blowing the others guys into the weeds. As is frequently the case, the success of the iSeries is directly connected to a strong application. In this case, the application provider is a company called Information Technology, and the market in which it distinguishes itself is banking and financial services.

A little more than two years ago, Information Technology (ITI) ported its core banking applications to OS/400. Prior to that decision and the subsequent accomplishment of the task, its enterprise software ran exclusively on Unisys mainframe hardware. The software was originally written in COBOL for Unisys, and in the conversion to COBOL for OS/400, ITI programmers happily discovered considerable performance gains. (COBOL is somewhat different on both platforms, just as it is different between IBM mainframes and OS/400 servers, which is why the conversion took time.)

The fact that ITI software ran far better on iSeries hardware combined with a much better price/performance story in the hardware comparison, has led ITI to new business opportunities that it is cashing in on. It has also brought the iSeries to the attention of companies that otherwise would not have given it a second thought. And not to be overlooked, it has battered Unisys in side-by-side comparisons.

David Wegman, ITI's senior vice president and general manager of the Premier Account Management Solutions operating unit, said his company had contemplated porting its core applications to OS/400 for a number of years before launching into the project in 2002. "Over the years, we found ourselves in some competitive deals where we were excluded from the business because we did not offer a alternative to Unisys," Wegman says. "Because of IBM's strong reputation in the financial sector and because we were losing potential customers, our initial intent to support iSeries was to eliminate that hurdle and acquire more new business."

According to ITI company literature, more financial institutions are using Internet banking solutions developed by ITI than any other solution in the industry. ITI's installed base has exceeded 1,500 financial institutions. Since it began providing an OS/400 option in May 2005, ITI has 22 clients. "Roughly two-thirds of that number were existing clients that replaced a Unisys system with an iSeries," Wegman says, "and the other one-third were new clients that came on board after using some other solution. Some of those new clients--one or two--had existing iSeries systems. The majority of new customers come from either another platform or from an outsourcing environment and wanted to go in-house with a solution from us. We also have another eight that have been sold and are signed up for migrations next year."

One of ITI's long-time customers is the Bank of Utah, where a Unisys server was solely devoted to running the trustworthy ITI core applications for the past 18 years. Matt Baxter, vice president of information technology at the bank, unknowingly began the iSeries discovery process when it came time to refresh the company's Unisys mainframe. The Bank of Utah already had a proposal from Unisys when the ITI account representative suggested the iSeries alternative. At that time, no one at Utah Bank was familiar with the iSeries and ITI still had its OS/400-based software in beta.

Baxter learned enough about the iSeries and OS/400 to recognize it deserved some serious consideration. He took the idea to the technology committee at the bank. There was skepticism, he says, because this involved the core of the business. "We were a little leery of what it could do, but the more we dug into it and understood what it would be doing and that it would not impact our customers, the decision was pretty easy."

Scott Parkinson, senior vice president of retail banking, says, "At the time we chose to move to the iSeries, there was a significant cost difference. Unisys had given us quite a large quote on its mainframe. The IBM iSeries (an i5 520 with 330 CPW) was about a half-million dollars cheaper than the Unisys box." Even after the bank told Unisys it was "not even in the ballpark" with the iSeries bid and Unisys reworked its numbers, it still came in over $100,000 higher than the iSeries. "These are savings in the cost of the hardware right out of the box," Parkinson says. Additional cost savings based on performance gains are over and above these costs also played into the decision-making, he says.

Despite the rather dramatic price and performance advantages, Wegman says ITI didn't turn to the iSeries just so it could turn over its clients to IBM. "There is no doubt," he readily admits, however, "that because we have two hardware alternatives for our clients, they benefit from a very competitive situation. Our clients are seeing some real significant price decreases for their investments in enterprise-class servers. Even our Unisys clients are getting a significant windfall because Unisys has done some dramatic price decreases to be competitive in the space."

No matter which way they go, ITI's existing customers and its new prospects are happy about ITI's decision to port to OS/400. But it is obvious the iSeries and OS/400 are making an impact with a strong value proposition. It certainly doesn't hurt that IBM's reputation in the financial industry is practically golden and, for that matter, so is ITI's. The company is, after all, a subsidiary of Fiserv, a trusted industry leader.

The out-of-the-box cost savings was an eye-opener for Utah Bank, but Baxter says a major performance gain was realized when the iSeries went live at Utah Bank. "Every night we update the system to regenerate the new balances and the interest paid out on the different accounts. That update was taking between four to eight hours each night on the Unisys system. We have decreased that to 30 to 40 minutes each night. The iSeries is much more powerful and it runs the ITI software that much more efficiently."

Another benefit came in the area of tape backups. "With the Unisys system, we had a tape library and the tape backups were taking up to four hours. With the change in systems and the use of tape cartridges, it takes 10 to 20 minutes for this process," Baxter says. "I have talked with other organizations that have upgraded their Unisys mainframes and their windows have not decreased like our 4 to 8 hour window decreases," Baxter says. "Their nightly updates continue to take them four hours."

When comparing the iSeries with the offerings from Unisys, Baxter was also impressed with the lifecycle and renewal of this system. "I don't think we'll be doing a 'fork-lift' update on this box every five years like we did with the Unisys mainframes," Baxter says. "Instead of fork-lifting this box, IBM can step the processors several times. They can add new disk arrays and add memory without taking out the box and bringing in a new one. Our experience with Unisys was that we were replacing a box every five years and running out of horsepower every four years."

The system administrators say the box is running at 3 percent to 4 percent utilization with incremental spikes that bring it up to 40 percent. "We ran our Unisys box at 80 percent for a year and that was miserable," Baxter says. "We would consider stepping up this processor--or possibly the memory--if we were running at a strong 20 or 30 percent." Since implementing the iSeries, the bank has added software for check imaging, overdraft protection, and online banking features--and nothing has bogged down the box. "I think we can also bring on a lot more users without impacting the box," he says. The bank has branches throughout northern Utah.

The learning curve for the iSeries was "relatively short," Baxter says. The deployment time, from the day the iSeries arrived to the "go live" date, spanned six weeks. Baxter describes this as a "very aggressive" schedule. "A lot of things had to happen at the same time," he says. "We converted without interruptions to our customers and only minor programming problems internally, which didn't impact our business." The green screen command line interface was difficult for a mainframe Unisys admin to grasp at first, but the proficiency is there now. In Baxter's opinion, all the staff has adjusted very quickly. "There's training we would still like to do on it to understand it in more depth, but we're very happy with what it is doing."