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Slideshow IBM to roll out new mainframes despite shrinking market Tweet Share this Email Print Related News IBM enters HR web applications market with Kenexa buy Mon, Aug 27 2012 Dell's outlook disappoints as PC market falters Wed, Aug 22 2012 Insight: Experts hope to shield cars from computer viruses Mon, Aug 20 2012 HP braces for huge loss after $8 billion EDS writedown Wed, Aug 8 2012 Analysis & Opinion Knight Capital’s filings reveal scant oversight focus on tech risks for board Related Topics Tech » A worker is pictured behind a logo at the IBM stand on the CeBIT computer fair in Hanover February 26, 2011. The world's largest IT fair CeBIT opens its doors on March 1 and runs through March 5. Credit: Reuters/Tobias Schwarz By Jim Finkle BOSTON | Tue Aug 28, 2012 12:07am EDT BOSTON (Reuters) - IBM will unveil a new version of its iconic mainframe computer on Tuesday, adding new security and data analytics features as it struggles to stem declines in the sluggish market for high-end business computers. International Business Machines Corp is the dominant provider of mainframe computers, selling machines that run on powerful microprocessors of its own design and priced starting at about $1 million. Its chief competitors are high-end servers from Hewlett-Packard Co and Oracle Corp. IBM said it spent more than $1 billion developing the updated machines, focusing on efforts to boost their computing performance, capacity and features. Analysts said existing customers are likely to appreciate the new bells and whistles. But they cautioned it will be tough for IBM to win new clients as most businesses are already enamored of cheaper technology that is widely considered "good enough" for all but the most mission-critical tasks. "It's going to be harder and harder for IBM to find new customers and new opportunities for the mainframe," said Charles King, an analyst with technology research firm Pund-IT. Officials with IBM said the company has "thousands" of mainframe customers around the globe but declined to be more specific. Gartner estimates that annual global sales of mainframes will fall this year and each year through 2016, declining a total of 14 percent over the five years to nearly $4.7 billion. Shipments of the new product begin next month. Mainframe sales typically pick up for several quarters after a product launch due to pent up demand from customers waiting for the newest technology. Gartner analyst Jeffrey Hewitt said current mainframe customers are likely to stick with the technology. That group includes government agencies, financial services companies and other businesses that require tremendous computing power, extreme speed and very high reliability for certain tasks such as processing credit card transactions. Yet he said that demand will grow at a brisk pace for less-expensive servers running on x86 chips from Intel Corp and Advanced Micro Devices Inc. Software makers have developed technology in recent years that enables companies to combine those servers into clusters capable of managing some tasks once handled only by mainframes. Gartner forecasts that sales of x86 servers will surge 10 percent this year to $39 billion. In the five years to 2016, annual sales of those machines will climb a total of 33 percent to $47 billion, or more than 10 times the mainframe market according to the firm's forecasts. 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