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Reading 3.1. Read the text



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3. Reading

3.1. Read the text

Back in Fashion

Geeks may roll their eyes at the news that Namibia is only now getting its first 

mainframe — a technology that most consider obsolete. Yet the First National 

Bank of Namibia, which bought the computer, is at the leading edge of a trend. 

Comeback is too strong a word, but mainframes no longer look that outdated.

Until the 1980s mainframes, so called because the processing unit was origi-

nally housed in a huge metal frame, ruled supreme

1

 in corporate data centers. 



Since then, these big, tightly laced bundles of software and hardware have been 

dethroned by 

distributed systems”



2

, meaning networks of smaller and cheaper 

machines, usually not based on proprietary technology

3

. But many large compa-



nies still run crucial applications on the “big iron”

4

: there are still about 10,000 in 



use worldwide. Withdraw money or buy insurance, and in most cases mainframes 

are handling the transaction.

Some companies like mainframes because they are reliable, secure and easy to 

maintain. But others have no choice. Banks, for instance, use decades-old appli-

cations to manage customer accounts. Moving these programs to other computers 

would be expensive and sometimes impossible. Most firms that can move off the 

mainframe have already done so.

1

  To rule supreme — играть важную роль, занимать главное место. 



2

  Distributed system — распределительная система.

3

  Proprietary technology — несвободная технология, являющаяся собственностью автора.



4

  Big iron — «большая железяка» (прозвище сверхмощного большого компьютера).




3. Reading

11

High “switching costs” explain in large part why mainframes are still a good 



business for IBM. It is the only big firm left selling them, at prices that start at 

$100,000 but often reach the millions. Sales of mainframes are said to have brought 

in about $3.5 billion a year, on average, in the past decade. Although this is only 

about 3.5% of the firm’s overall revenue, each dollar spent on hardware pulls in at 

least as much from sales of software and maintenance contracts. 

To preserve its mainframe business, IBM has regularly modernised its line-

up

5

 of machines, lowering prices and improving performance. It has also given 



cash and computers to hundreds of universities and schools to get them to train 

replacements for retiring mainframe administrators.

In addition, IBM is trying to get customers to use mainframes for more func-

tions. For some years it has offered specialised add-on processors at considerably 

lower prices, to run a greater variety of programs, mostly based on Linux, an open-

source operating system. And last year IBM started bundling

6

 mainframes with 



applications at a discount.

IBM is also trying to attract new customers, particularly in fast-growing 

emerging markets. Without mainframes, India’s Housing Development Finance 

Corporation and the Bank of China in Hong Kong would have a hard time dealing 

with their explosive growth.

All these efforts have had a degree of success, although mainframe revenues 

have been badly hurt by the recession. About 1,300 firms, a third of IBM’s main-

frame customers, have bought add-ons enabling them to use Linux. But IBM is 

in legal trouble again, as it was in the 1970s. It is accused of abusing its mainframe 

monopoly by refusing to license software that allows other firms to build cheaper 

clones of its machines. Regulators in Washington and Brussels are looking into the 

case.


More worrying to IBM is a run-in with Neon, a software company. It sells a 

program that allows computing tasks that usually run on a mainframe’s regular 

processors to be shifted to the discounted ones meant to run things like Linux. 

Predictably, IBM is not happy and is said to have threatened to charge higher li-

censing fees to customers using Neon’s software. This, in turn, has led Neon to 

file a lawsuit against IBM. Defeat would make a big dent in IBM’s mainframe 

revenues.

5

  A line-up — ассортимент.



6

  To bundle — поставлять в комплекте.




Unit 2

12

Still, the computer industry seems to be moving IBM’s way. The mainframe 



may well find a new home in corporate computing clouds, the pools of data-

processing capacity many firms are building. Many companies are also increasingly 

interested in buying simpler, more integrated computer systems, even if this means 

a higher price. Reacting to this, IBM’s rivals are making bets on mainframe-like 

products. On January 13th HP and Microsoft announced a pact to come up with 

tight packages of hardware and software. Brad Day of Forrester Research, another 

market-research group, puts it thus: “We are on the way back to the future”.

Adapted from the “Economist”, 16th November 2010 



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