The Future of Semiconductors and Mainframe Technology | TSG Ep. 911

Hey everyone, do I have a semiconductor for you? You're watching Textron gang. Happy Wednesday everyone.

Welcome to Wednesday's Textron Gang show. I'm Alan Hummel, and it's great to have you here. As I mentioned, uh, we're gonna be talking a lot about the semiconductor market, new report out at fu and we're gonna dive into, and we've got some other great things to talk about.

Clean energy, uh, a report of a a, a report from a class trip to share by our own Steven FST and more. Let me introduce you to our gang for today, though that we're gonna discuss it with. I mentioned already the man from Ohio, Steven fst.

We also have, we didn't know, she's also from Ohio, a Cleveland gal, Kate Scarcella, uh, Chris Blas, Dan o Dan O'Brien's joining us. So he looks like he's back home in the Boston area. And Mike Ard from a Dark Cave somewhere in Las Vegas is what the word is.

But gang, welcome. Thanks for joining us today. Let's jump right into it.

Mike, I mentioned a new report came out from Ray Wang over at fu. Uh, it was kind of an update to his Q1 snapshot of the semiconductor data center business. And it, it's gone, uh, I think in 2024, the number was 230 some odd million billion dollars.

And by 2029 forecast to go to $500 billion. So almost double in just a couple years here, four years. Um, I wrote an article, actually, I wrote two articles, one on text drawing it, and one on Techstrong ai.

The, the summary of the report I think is available on FU research, but what do you think? Well, when I was small, 500 billion sounded like a lot of money, but these days I'm not entirely sure. So Dan, kind of walk us through this report a little bit, if you would.

And is it your sense that this is a huge number or is this kind of like just steady as she goes? This is the course run. Uh, I think it's a good number.

Um, you know, encourage folks to head over to the new futurum website and sign up for a kind of early peak at this, uh, for all of our subscribers long into the future intelligence platform. You can see the report right there. Uh, listen, I, me, I, you know, I think it's pretty well, you know, regarded the consensuses that, you know, you get a trillion dollars semiconductor market coming up, um, in just a couple of years.

So, you know, half of that spending coming from the data center, you know, certainly passes the Smith test for me. Uh, that's about a 22% cop on annual growth rate over the next few years. So, you know, relative to the results that we're putting up, and obviously we've got Nvidia earnings tonight, so we'll check in there and kinda see how things are tracking.

But, um, I think it's a really reasonable number. Um, you know, really not just coming from the GPU side though, you know, Ray really kind of highlights the growth coming from the XPU side as well. You see these custom AI accelerators taking, uh, you know, taking some share, particularly on the inference side.

Companies like Broadcom, all Chip media, tech, Marvell, um, you know, a lot of growth happening there. You know, it's, it's the number one driver in the market right now, right? You know, it seems seemingly feels like the entire economy is kind of, you know, resting on the AI infrastructure build out.

We've got, you know, trillion and a half dollars in ai CapEx committed, you know, across kind of the large hyperscaler set over the next few years. Um, feels like a very reasonable forecast to me. You know, there's a question in there I wanted to add to that, though.

Does they, do these numbers take into account what we're seeing on the political front? And are we moving towards a world where, you know, each semiconductor company is gonna have a version of the same chip that they're making in different markets to comply with different political and economic rules and regs? And is this number low?

I, I, it could prove conservative. I mean, I think, you know, anybody who's forecasted this market, you know, the last several years has probably, you know, ended up having a conservative view relative to reality, right? Obviously, you, you see that in the market and, you know, just the growth trajectory of, you know, companies like Nvidia, um, and their supply chain.

But, you know, I think you're kind of alluding to Intel, the government support behind Foundry. Listen, dual sourcing is nothing new in the semiconductor industry, right? Um, we've gotten away from it in more recent years where, you know, TSMC has really kind of owned a lot of the designs, but, you know, think back to the big apple boom when, you know, the last big, you know, driver of the semiconductor market, the smartphone was happening.

You had Apple's dual sourcing across Samsung and TS and C with their Aeries chip sets. So, you know, I think the design companies would love to see, you know, those variations where you've got, you know, multiple different skews kind of happening outta different foundries to comply with this sort of stuff. I think you're seeing that trend happen anyway.

You know, look at the number of chips within the TPU family generation to generation. You know, the broad trend in the market is more heterogeneous compute. It's more custom built for the workload.

And, you know, certainly some of these new requirements around where things are made and, you know, the export restrictions around it, you know, that's only gonna accelerate that trend, I think. So Mike, I've a few thoughts on this. So, and I, I, you know, I had a chance to slack with Ray, actually didn't actually talk.

We slacked and, you know, read the report. Couple of things. First of all, it very much is an all in, right?

That $500 billion number could just as easily be six, 700 billion if AI goes hog wild, right? I think it's a conservative number in that scenario. By the same token, you know, we're seeing a lot of people starting to, you know, reign on AI parade a little bit.

It's become fashionable to become a doubter all of a sudden. And, and if that market slows down, you might see only $300 billion or, or some, you know, something less than 500 billion. So I, I think we're at a, you know, everybody's put their chips in the middle of the table here and, and we'll see, you know, what the inside drawer is or what, I forget what they call it, and you're not, the cards in your hand, the cards that are on the table.

I'm not a poker player, as you could tell. But anyway, it, it, it's, it's, it's in there. Um, I do think the whole chip sovereignty, if we could call it that thing, is going to be an issue.

Um, I wonder how many of these companies the US will have a stake in, you know, as the government. I don't know if that's a good or a bad thing, but here, here's what I, what I do know, I think we're going to see the world bifurcate in terms, not, not nation states. I mean the market.

I think we're gonna see the nation or the, the market bifurcate into companies that design chips, which is what we have now a lot, and companies that make chips, and quite frankly, that's T SMCs, uh, you know, yeah, that's their business. You know, how long I, I, I'll, I'll give Pat Gelsinger credit where credit's due. He recognized that, that that is a market, a huge market.

How long are we gonna let them have it to themselves? We've got to develop the capability. When I say we, I, I mean Intel, but I mean other foundries.

We need a strong, healthy, competitive worldwide foundry marketplace where people do have choices to go to two or three. You know, once I designed my chip, I could have a built in two or three different foundries, if you will. And if we could get there, then you've got a real market.

And you know what, I'm not a big fan of government ownership of means of production. I'm a, I'm a free market guy. I lose to see a market, what, right?

I mean, TSMC is government backed. You've got the Japanese separate with rapides, government backed intel, now backed by, uh, Well, there, there's a difference between government backed and government owned, but in, but look in Taiwan there that no one ever claimed Taiwan is, you know, Singapore's a great country too, but people there give up their freedom for economic stability. That's not our way.

But I'm not here to debate that. Yes, you're going to need governments involved in this, right? You need government blessing, you need government help.

And it, and it's more than that. It's a critical infrastructure imperative, a strategic imperative for governments to make sure we have that. But the best medicine we could have is a healthy market of multiple players, so that the people who are designing the chips, the apples and so forth, they have choices of where to go.

And, and you may get some who, who are both, they both design and, and fab like Intel always did, and more power to them as well. I think for me, when I think about this situation, it's that, you know, why we see billions being spent in the, in the data center. My concern is the, isn't the lack of demand, but the overbuilding.

So I think that we haven't seen AI unleashed and what it can actually do. And so I fear that we're gonna have all these huge data centers and, you know, and we're not gonna need them because AI will improve everything that we do. Yeah, that's, that's a real good point, Kate, because you know, one of the things that I've seen mentioned, people love to compare the current AI build out to the web, uh, build out, or the fiber build out from previous booms.

And yet, as you point out, uh, one of the challenges here is number one, that we haven't seen a really profitable application of AI yet. And that is, despite the fact that the true cost of the infrastructure and power is not yet reflected in the product, but also one of the things that gets pointed out by analysts is that a lot of the spending on capital equipment is on capital equipment that may in fact be obsolete in a few years by the time the, um, the market matures. So if we assume that AI will have productive and profitable applications, a lot of these things that are being built out, um, may not actually be all that useful.

And the, you know, investment may not come to fruition. Somebody pointed out the other day that you can currently buy a, um, a 48 gig, uh, a 100 Nvidia processor on eBay. Uh, guess what?

$2,500 buys you and a 100 on eBay, uh, right now. And, um, that's because it's effectively obsolete by the next generation that's already being deployed. Well, what happens when the next generation can the next generation come out?

Uh, you know, unlike, for example, the fiber boom where all that dark fiber ended up being incredibly valuable, powering the internet as we know it, unlike even the data center boom where things go obsolete, but they don't go obsolete next year and not quite so radically. I mean, Google and Microsoft have announced that they're gonna have 3, 4, 5, maybe even six years of lifespan out of some of the servers that they've bought. Uh, will we get six years of lifespan out of the ai, uh, processors that are being bought?

I'm not sure. Nah, I don't think so. I think You have to worry about that, the financial engineering of this.

All right? I mean, you know, companies, to your point, Steven, are, you know, depreciating these assets over 4, 5, 6 year timeframes and, you know, realistically you could argue it could be a year or two is more realistic. So Really, or most, yeah.

Hey, Chris, Chris, if your mic's back on, you wanna weigh in? Yeah, I'll come on, on the buller side of this one for structural reasons. I mean, all the reasons you guys are, uh, laying out are, are, are accurate.

But look at what we've been talking about in this form in this show over the last several months, right? We've been building up massive stacks. We use AI on massive compute, and really, there's all sorts of horizontal space that we, and we've talked about the per proliferation of other chips, and, you know, this little thing, this little ai, you know, I'm afraid to say it's name because it, it'll be stupid needs so much more power.

So when I see, you know, I, all the factors, uh, you're bringing up geopolitical things are just driving it further, but we're, we're maxing out on the vertical verticality, you know, perhaps in the processor space and usage, which is leaving all sorts of, all sorts of room horizontally. So I think the, I think generally speaking, this is right. I'll leave the, you know, I'll, uh, in this particular topic, I'll leave the market analytics and timing to others, but it just feels right.

You know, this, this is, there's gonna be a lot more smart stuff in a lot more things, and that means a lot more chips and they're not all the same. Yeah. You Know, to Steven's point, though, when I talk to AI developers, I mean, it's amazing when there's a new chip out, that's all they want, and they don't want to hear from the old chips, and they're just like, as far as they're concerned, they're like, scrappy junk already.

So, but, But why is that any different than it's ever been? It hasn't, no. I, I mean, right.

We always want the, the greatest and Everybody wants the latest and greatest I, the pen I, the, the core, the I seven, no, I want that I nine. When's the I 12 coming, right? But as Dan points out, these things are heavily financially engineered as well.

And so it could very well be that we could both be right, that effect effectively today's, you know, CapEx build out may not end up being profitable, but the profitability of future applications may wipe out any, you know, even the tremendous CapEx that we've made now. And to Chris's point, I, I totally agree with you. So much of this market is unaddressed.

You know, if you look at this report, all of these companies that are developing, I mean, the thing that makes me excited is to think about sort of what is, you know, what we're gonna see from companies like Broadcom and Marvell and Media Tech and so on. Those are the companies that are gonna be building just incredible stuff on all of the, in all of these new fabs, there's an appetite for increasing compute everywhere, not just in Ai. Agree.

And, and I want to, if I could just drive that home a second. It's not just about NVIDIA's GPUs this report and, and do go check out the exact summary, and if you like it, get the whole report, be, you know, subscribe. But this report makes clear that while NVIDIA's going to get their fair share, and then some right.

Take no shed, no tears for Jensen, but it's the Broadcoms, it's the up and comers like Marvell. It's a lot of these other chip makers or chip designers, players in the market who are gonna reap the benefits here too. And you've gotta be, if you're gonna be smart about this market, you gotta be familiar with those folks on what they're doing too.

So I highly, highly encourage you. Go check it out. Someone else wanted to say something?

I just wanted to clarify one point about the separation of design and foundries. 'cause I believe credit for that belongs to Arm. I think they started that whole trend.

They did, They did pretty good with it. I heard. I think a MD might also deserve a little bit of credit there.

Yeah, listen, I mean, the, the fabulous trend, you know, has, has been playing out for, call it 20 years, right? The market's been moving that way. Where, where you see the IDM trend really still in play is not the leading edge, you know, it's all the trailing edge.

It's the Texas instruments of the world that Are still, don't, don't forget how many chips they ti I still does a lot of calculators On that note, let's take a break here, and we're going to come back and talk a little bit about clean energy to power all these chips for $500 billion. You're watching Textron Gang Discover Textron Group, the epicenter of tech innovation. We are your go-to for reaching IT leaders and practitioners worldwide.

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We're gonna have a little chat about clean energy and big tech. The big tech companies sent a little memo back to Washington saying, please don't kill those clean energy credits. We need them to drive data center investments, especially around things like nuclear energy, which everybody and his brother seems to be now saying that they want to be a part of.

Alan, I know you kind of looked at the space and, um, you know, I know you have opinions about what happens in Washington, but yeah, do you think we can, you know, save this clean energy credit thing? 'cause maybe it is one of the few bipartisan things that's good for everybody. We, what's bipartisan me?

And even today, some stop, just stop. There is no more bipartisan, it's ruled by fiat. But here's the thing.

I happen to agree, I think, look, when 92% of the energy that came on last year, new energy that came on in Texas last year was solar and wind. It's a little bit crazy to try to just kick that to the curb. That being said, we don't have bipartisanship in our government, nor do we have rule by a a committees like that.

It, it's whatever they decide. And they've decided that clean energy, and I don't even think they like to use the word clean energy. You know, they don't like solar and wind and we're not using it.

God darn it. And that's the end of it. Um, the good news is, the good news is that it's funny how nuclear energy has been brought in from the woodshed and, and is now everybody's little darling.

And, you know, I, I, including mine, I'll be honest with you, I'm looking forward to see container sized nuclear plants, powering data centers, powering medium sized cities. You know, I, I think we've come a long way since, uh, three Mile Island. And, you know, in New York where I grew up, where I grew up, what was it, Indian Point, Mike was the, the nuclear power plant.

Never had a problem there. It supplied New York City with tons of power. Um, but those were, you know, those were designed in the fifties and sixties.

It's been a minute. We've made improvements. We need, we need, we need all good energy that we could get.

If you, if you buy into the 500 billion trillion dollars semi market, we need all the energy production we can get. And, and nuclear might be our, our best bet. And then, given the current political climate, it is, given the current political climate, it, it might be the fastest road to getting there.

Yeah, I'm with you with, uh, nuclear energy. When I did my thesis for, um, for information security and securing the electrical grid, I actually went to nuclear plants to look at what we were talking about from a cybersecurity point of view. I love nuclear energy.

I think it's this untapped. Um, it's really something that we have been scared of, uh, I think growing up because of Three Mile Island, uh, the movie China syndrome, which some of you may remember. But, um, but it, it's good.

I mean, it, it's nuclear energy. And at the same time, I don't think we should stop the wind projects that we have in, you know, the New England area. Um, I think like all technology, the more that we use it, the more that we understand it, the more that we understand, the more that we're able to, you know, understand, you know, storage capacity.

And, you know, this almost leads me to, you know, um, I was gonna say IBM and storage, but the whole other, that's the next section. But Chris, what do you say? Yeah, I, I'm a nuclear hippie, right?

You know, I, I, I agree with everybody else, and, and frankly, I've never been in, been worried about a nuclear power. In fact, you know, I, I, as a young person, I thought I might, uh, spend some time with Greenpeace and I talk to an actual Greenpeace person. It's like, save the whales again, anti-nuke.

I have no nuclear war. It's like, no, we mean no nuclear power. It's like, wait, that's actually better.

But to, you know, to weave this into the point we, you know, the reason that I'm bullish about the future writ large is that we have a million reasons to need the same thing. And that's visibility, right? It's not about supply chain security and knowing where your software bill of materials is necessarily, maybe.

And it's not necessarily about knowing where you're green, your impacting the environment because your usage and production of, of power, maybe. But it's all of those things sometimes. And the same systems do the same thing.

The the lake. Great. Surely Goodman, in 2019, when Medi and Ari and I first, you know, had that angry conversation and ended up putting together the Deb bomb attestation ecosystem, we meant supply chain security.

We had mainframe securities. We talk about the next segment, but, uh, but it turned out that surely wanted to, uh, um, had a system for carbon credits. How do we actually track them?

Is it better? Is it not? Look, you know, recycling, you know, consumer recycling in my generation was mostly a scam.

A field good scam that caused more pollution that it saved would've been better landfilling at all. You know, I don't care what the answers are, I don't think any of us do. But we would like to know what works and what doesn't.

And in each of these things, we are, we're developing the ability to know, and then we can decide. Yeah, the challenge, you know, I've said for a while that, um, one of the, the biggest challenge for nuclear is that it's frankly just not financially competitive with alternative energy sources. Uh, you know, as of today, uh, the projected cost for these nuclear, these small modular reactors, is actually three times the cost of installing solar and batteries.

And, um, and easily three or four times the cost of, uh, wind turbines or solar panels alone. And that is a big challenge. I said, you can't put that genie back in the bottle because you know, money, you know, essentially, uh, solar and wind are so financially competitive.

It's actually cheaper to build out a new solar plant with batteries than it is to continue to power your old gas, natural gas turbine today. But the challenge is apparently you can put that genie back into the bottle by denying permits and shutting down projects. So that's kind of where we're at.

Um, given that I actually am gonna come over to the Allen side of the table and say, let's go small modular reactors, you know, I mean, you know, if, if we need something, and these things are, you know, they, they are very promising. These are not your dad's nuclear reactors. These things are, are cooled with molten salt.

They have, uh, you uranium in, uh, pellets that is, uh, much, much safer. E every aspect of these things is much, much more attractive. No, they're not financially competitive with alternative energy sources or even with natural gas and coal, but they are competitive in other ways.

And if the externalities of especially fossil fuels were weighed in these things would be more than up to their, uh, competition. And I think we need 'em. Agree.

Well, I that's the word, right? Sorry, the word right there weighed in. Right?

We all of all ideologists all right, human beings, we just wanna know, and I have shared a lot of nuclear power, uh, uh, conferences and so forth, sell fields. Like you say, Steven, you know, the cost, no, they're completely outta line. That does not mean they will be forever aligned.

We, I think we made mis mistakes in choosing fuel cycles in the 1950s, whatever, right? But whatever the answers are, we, I, it's not safe to be locked into anything. Our mainframe is right or wrong.

Do we need more chips to where the power come from? None of us know. We do know, though, if we can see things clearly enough, not that much, but just enough to be able to see we can make reasonable choices on all these things.

We don't have to take sides, borrow sides. I don't, I don't think people really care whether it's clean energy, green energy, nuclear. I think that there's an imperative that we need more power and energy in the country.

Like we have created a new application that is incredibly power hungry. And I think the name of the game is just supply here. I mean, much like, uh, we've talked about in the previous segment, you know, the ability to build leading edge chips as a kind of national strategic, you know, imperative and, you know, strategic advantage.

I think having, you know, a huge amount of excess power that we can generate to drive this AI thing forward, I think is also just, it's the end game, right? I mean, you know, I think we're, we're looking at a world where having, you know, the most advanced AI clusters and quantum computing is, you know, a strategic military advantage even. Um, so I, I tend to think the name of the game is power at all costs.

And you know, I think if you look at some of the math on, you know, if you triple the power costs, what that means to, you know, JUULs per token, you know, it's negligible in the grand scheme of things, given the scale of the investment and all the other areas that we're pouring money in here. You said something though, Dan, excess power. I think one of the problems we have is we have nowhere to store excess power.

We need battery. I mean, this, this is a tech, this, this whole thing is a giant tech puzzle, right? If we, But on that note, uh, as of right now, global battery supply is actually running three times demand.

So we have, uh, actually excess supply of batteries right now, too. Amazing. But, but our batteries aren't as efficient as they need to be.

Again, there's so much that, you know, and, and Dan, we actually can care about multiple things at the same time. But I'm, I'm totally with you, Dan. You know, look, everybody who wants to go live green in the woods and eat granola, we're gonna use 10 times as much power get over it, right?

Everybody wants to burn coal. No, we can't do, you know, do that long term either. Get over it, right?

We just need to weigh these things out, right? And exact, there's so much room in the middle, we'll use a lot more power and we'll use it much more, more wisely. But, but we're using power now.

Let me just, my tree hugging hand here for a second. And Steven, I, I hope you'll join me in this, okay? You're a hundred percent right Dan.

You're a hundred percent right too. That's why it's moronic to throw away solar and wind just because somebody doesn't like it when it's probably dollar for dollar, the most efficient one out there. Now you wanna get rid of clean.

You wanna say, look, let's level the playing field. Let's not play favorites. Energy is energy.

I don't care whether it comes from fossil fuels, uh, uh, sun, uh, solar, uh, nuclear wind, liquid gas, fossil fuel, whatever, dollar for dollar for dollar. Where do I get the best bang for my buck? And that's where you go.

Now I'm not, and that's dos, That's, It's not one size fits all right? Different geographies, different use cases, different solutions, right? Exactly.

Coastal city versus the planes versus, you know, the middle of the desert. You know, let, let's, let's, you know, like we talked about in the previous segment around finding the right solution for the right workload. I think we're talking about the same thing on power.

Yeah. And, and I, another aspect that was in our notes here is, you know, Microsoft is piloting a water free data center that would be great for Phoenix, Las Vegas, you know, places where water is at a premium. I, I don't know enough about it, Stephen.

I know you are my, you're my green man. What's that about? Oh, that is such a great idea right now.

Uh, it would honestly, it's very analogous to sort of the current state of nuclear versus the future of nuclear. We've been pa we've been cooling our data centers using evaporative cooling because it's cheap, because we can pour water into it. And you pour a, what is it, a liter and a half of water equals, you know, a kilowatt of cooling or something like that.

Essentially, you, you evaporate some water, it gen it, it, it cools and you're good instead. But that, the problem is we're running outta water, especially in places where these data centers and fabs are being built. You know, you look at Utah, Nevada, you know, Arizona, Texas, and even in places like Ohio and Virginia that have lots of water, we're still running out of fresh water in order to do to cool cooling because it's just not in the right place at the right time.

If you know, and again, it's one of those trade offs. You look at it and you say, wait a second, just like, uh, power generation is inconsistent from, um, renewable sources, and at night the sun doesn't shine. Well, then you gotta put batteries and batteries are add a layer of inefficiency and you end up wasting some power.

Same thing with cooling. If you look at the cooling problem, you say, wait a second, let's stop pouring water in here and let's do air to air cooling. Yes, it requires more electricity, but it doesn't require that water.

Okay, good. Solved. Let's do it.

Right. I love this. Excellent.

Alright. I would just point out one thing to Steven's point about China. 'cause when I talk to AI developers, one of the, and they go visit, one of the things that they come home and remark on is like, Hey, nobody over there is freaking out about where they're gonna find the power for their AI project.

Oh, it's a, it's global. It's not just a US issue, but hey, we're, we're over time on this segment. I want to come back.

We're gonna get our little field report from Cher. com is the leading resource for news analysis and education on challenges facing the cybersecurity industry. com covers all aspects of cybersecurity, including data security, DevSecOps, cloud security, application security, network security, security threats, and more.

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Home of security bloggers network. Hey folks, we're back and we're gonna have one of our famous little field reports from when one of us went to visit somewhere. Steven was at the Share conference, which if you're not familiar with, is kind of a, I guess I'll describe it as an emotional support group for main framers.

But, um, oh, Okay. But Steven, what's going on with these folks and what, what are you hearing on the latest and greatest on mainframes? Sorry, my head just exploded.

No, uh, close share. First off, Cher is actually a remarkable thing. It is the longest running tech conference.

I, I said another in the known universe. Um, we don't know, there may be one running longer on Alpha Century or something like that. But here in the, uh, on our planet, Cher is the longest running tough conference.

It was, it was started in 1955. Um, you know, so Alan, you know, you're the, I think the only one that remembers the first Oh, oh, anyway, uh, no, it was started in 1955 before any of us were born. And it is still going strong.

The other thing that I love about share is that it is deeply, deeply technical and to the name very much about sharing. So if you love that sort of, um, hacker vibe of CubeCon where people are sharing their code and doing code reviews and stuff like that, share is kind of like that. Except as you point out, most of the people, in fact, pretty much all of the content is mainframe related.

And you might say mainframe, isn't that just a term they misuse in movies? But no, uh, actually most of the world's transactional data still runs through mainframes. It's still a massive, massive business.

There's big companies, I mean, IBM obviously, but Broadcom derives a huge amount of revenue. Uh, companies like Rocket Software are huge in this space, BMC, and those companies are still powering much of the, what the world is doing. Now, I went to share last year in Kansas City, um, I missed one, and then I came back this year.

It was actually here in Cleveland, which was tremendous. I think everybody loved Cleveland. Um, it actually does rock.

And, um, and the conference, you know, the things that I wanna zoom in on here from a, from a content perspective, are the many ways that share is showing sort of the evolution of the mainframe. IBM, first off has a brand new mainframe, um, that's out and being deployed right now. It has AI capabilities, it's got accelerators.

It looks very much like if you were to describe the hardware and forget to mention what operating system it's running, you'd think, man, this is a pretty cool new modern system. It is. It's running mainframe stuff.

You know, the other thing though that, that really strikes me about Cher is that there's a generational change happening right now. I heard from some of the insiders at the conference, some, some of the sessions that are kind of closed door sessions, that essentially the old school mainframe folks are finally starting to say, you know what? We gotta turn it over to this, this young generation, because the young generation is there.

If you walked around, I looked old compared to a lot of the people in that conference. Well, you are Steven, Thank you very much, Alan, you, I owed you that, by the way. So we're even, There are a lot of young people.

It's a very diverse crowd. It's not at all who you might guess would be at a mainframe conference. And they're doing cool stuff.

They're applying DevOps technologies. Uh, we heard, uh, tech Field Day presentation from a company called Popup Mainframe that is on the leading edge of doing essentially, you know, it's kind of like containerization, what containerization did to modern application development. They're doing that on the mainframe, right?

Um, we've got observability, we've got ai, uh, we had Broadcom talking about how they're doing AI ops on the mainframe platform. And it is legit. It is like what you would expect from AI ops in the cloud or an open systems, except with a mainframe slant.

And there's all sorts of new people. I mean, one of the big things that I focused on on Wednesday was a lot of sessions on running Linux on the mainframe. There's a few different ways to do that.

And it's not about basically having better hardware to run Linux on. It's about connecting all of those mainframe applications to the modern world, you know, the open systems world through, you know, Linux basically as the bridge. That's just incredible.

Now, I know that y'all have a lot of thoughts on that. I just wanted to kinda share those are my takeaways from share. Uh, what do y'all think about the modern mainframe?

So I I I've been covering, look, I've always been like fascinated with DevOps and mainframes ever since. com 12, 13 years ago. And I, I'll tell you something, uh, we don't give IBM enough credit for what a fantastic platform that Z is, right?

So I have a good friend at IBM, Roslyn Radcliffe, Dan, I don't know if you ever met Roslyn over there. She, brilliant, brilliant woman. All of their mainframe people I met over the years are, you know, and let's face it, everybody in the mainframe industry worked at IBM at some point or another, right?

Because they all, they all gen. That's the genesis of it. But you wanna talk about taking a platform that is, I wasn't there in 55, Steven, but it is, you know, that old, but refreshing it, making it modern so that it does it.

Look, it was running containers before we ever heard a docker. Let's be, uh, clear, right? It Docker didn't invent containers.

Mainframe's been running them forever. But it runs Linux, it runs Java, it runs it. There isn't much, it doesn't run.

You want to systems or record systems of engagement, bifurcate your stuff, put some stuff in the cloud and make it, you know, hum back here on the mainframe. It does it. IBM consistently refreshes this platform.

Is it every two or three years, I think is the cycle. It's three years, right? Dan, two year cycles.

And every cycle is just rocking rock, solid rocking. We sit here today and, and there are a lot of young people who maybe want to make fun of it. But Penny, for Penny mip for mip, dollar for dollar, it's still your most effective platform for compute, for, for mission critical stuff.

If security's important to you, if uptime is important to you, there still isn't anything that touches it. And just one last point about young people, Steven, I'm glad to hear that you saw all these young people. I want to give a shout out to within the Linux Foundation, uh, a project called the, uh, open Mainframe Project.

Yep. O-M-P-I-I Saw them, I talked to them there. Yep.

Great People. My friend John there. And, and, uh, the lady who runs their marketing, I, I did the Open Mainframe Project podcast for a year and a half, two years with them.

And they do an amazing job of education, of, of bringing up like scholarships to people. You know, it's a funny thing in India that turned out COBOL program is like mad because they know they could get a job. There's, there's a shortage of them.

But the Open Mainframe Project, and, and I'll give them a shout out and also say they don't get enough support from IBM and BMC and Broadcom and Rocket, the big four in the mainframe space. We should have a better mainframe circuit events, right? Share is, share is share, right?

It is a very unique conference and everything like that. But you look at what they do with CubeCon, right? Why, why can't we have that kind of buzz and craziness on, on Mainframe and, and the Open mainframe project's a great place to, to do it.

But look, DevOps runs great on mainframes, right? So, so Dan, let me ask you this question though. 'cause part of the issue with mainframes isn't how robust the platform is.

I think everybody knows that it's awesome, but the issue has always been the price of entry into that environment. And it used to be kind of a million dollars. Now I think it's probably a half a million, or where do you think the point of entry is?

And that's why everybody winds up buying a bunch of X 86 boxes. I I think that's changing, Mike. I mean, I think, you know, Steven alluded to it a bit earlier.

You know, there's a flavor of the mainframe called Linux One, um, that takes all the Z hardware and you know, really creates an open system can run re you can run OpenShift containers. Um, and I think there's a lot of those X 86 workloads are transitioning. Certainly ARM is picking up the majority of them, but there's a lot of use cases where the total cost of ownership, you know, really argues quite strongly for, you know, for the Linux one and the mainframe system.

Um, you can check out some of the work that, uh, signal six five did on that, um, you know, a, a lab project that, uh, the company did in, in, um, in concert with IBM on that to kind of prove that point. Um, listen, the only thing not modern about the mainframe is that it also runs really old code, right? Like it's got backwards compatibility like nothing else.

Um, everything else about it is completely modern. It's got the highest clock speed, almost any chip out there. You're doing, you know, uh, quantum safe encryption.

You've got, you know, on-chip accelerators that are, you know, doing incredibly low latency compute inside the credit card transaction window, um, to detect fraud detection. Um, I mean there's, there's an incredible amount of in innovation that they're pouring into that system. Um, and I think, you know, in a world in which, you know, we've all kind of recognized it's a hybrid world, um, we talked about this concept of heterogeneous compute really finding the most efficient way, um, for every workload.

You know, the mainframe, you know, has really a, a, a lot of new life into it. Um, you know, with all these strengths kind of converging out there at the market, It, it takes about three generations, you know, for innovation to turn into infrastructure, right? And I think this is a fascinating example.

'cause the 70 years out, you know, from the first to the, the share conferences, right? The human generation is 25 years, right? So there's about 200 generations of human written history, say 500 since we started doing infrastructure.

And as you look at these transitions, when you know, somebody gets a crazy idea to start directing the water towards the plants right now, it works. There's a lot more food and it booms and it's a, it's a great time. And then there's a drought and you know, if you weren't, you know, the man water management person and, uh, the survivors will kill you, right?

So you end up with standards and so forth. We see infrastructure maturing over and over and everything in this, in this show. All, all the episodes we're doing that sort of thing.

You know, hey, we, we've got AI that's gonna use these crazy chips. We're gonna put a whole bunch of chips in one spot. But that's not a mature infrastructure.

And the ot, I mean, we are using, we quiet wire today are using 15-year-old chips to run AI because, you know, a small manufacturer does not need Illumina class, you know, uh, emerging ai, they need Bob who sits there and watches the, the files that works perfectly fine. So in ot, historically, we've shown how this is done in OT today, we're demonstrating it, and in it we still think, you know, this is, uh, a new shiny thing when it's infrastructure and now it's responsibility. That means writing it all down.

I find that the, the biggest problem, um, that we had with the adoption of mainframes was actually just a lack of talent out there. A lack of people being able to actually run the systems. You know, there was, that the field was, was very small, so Mm-hmm.

And that's actually one of the coolest things too. Uh, you, you mentioned in, in China, well, here in the US as well, there are a few universities that have basically mainframe boot camps. And, and in many cases they're smaller colleges, you know, community colleges, that sort of Thing.

Some historically black colleges too. But let me tell you, people that graduate from those programs can write themselves a check. You know, and again, you know, shout Out to the mainframe Open Mainframe Project.

They're the ones behind this. I, I forgot the professor who runs it at two or three different universities. I've interviewed him a few times through OPM.

They're, I, IBM helped a lot here too. I mean, they've created, uh, two AI tools, you know, one to help on the coding skillset, you know, cobal, the Java, you know, specialized AI models to help with, uh, you know, the lack of COBOL skills and mainframe modernization. But they've also got AI tools for the operator side.

Um, you know, really, you know, kind of democratizing that knowledge out there so that you can interact, you know, in a natural language way and get the help you need on how to stay up and running. So, Kate, lemme ask you this. 'cause when you talk to IBMers and mainframes, there's a little bitterness in the language because, or the feeling, because they essentially say, no one's hearing us.

We just talked about all this great stuff that the IBM mainframe does. And yet, you know, the market's dominated by all these other boxes out there. I mean, what can that IBM community do besides grouse amongst themselves about the fact that the rest of the world seems tone deaf about this?

Yeah, and for that, I would say, you know, let's go back to Alan because I, I do think, you know, IBM and other mainframe companies really need to reach out to the Open Linux Foundation. They need to reach out to schools. It is so important for, for schools to start to train, um, people, you know, with the skills needed.

So when that, when they get out, they can write their own checks, you know, so I think it's a, it's a matter of, of a community coming together and helping say, you know, this is really good technology and just getting it out there. I think it's important. Yeah, and just as quick call out, uh, one of our folks around the tech field day table, Jeffrey Decker is a professor at Northern Illinois University and he runs one of these boot camps.

So if you're interested or you know, somebody who might be interested, Northern Illinois University in DeKalb, Illinois has just the program. Hey guys, I gotta call it we're out of time. But just quickly, Steven, the Tech Field Day, uh, uh, videos from that you did at Share, they're available up on the Tech Field Day YouTube site, I assume, as well as on Techstrong TV Going up today.

We just, uh, putting 'em through some review process and, uh, we'll get them posted just as soon as we can. Good Man. He's pretty good for a young guy.

Um, all righty, on that note, we're gonna end our, uh, chauffeur today. Okay, Chris, Steven Dano. Mike, thank you.

Enjoy your day, everyone. As usual. We've got Tech on TV following this.

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