Your z17 Upgrade Calculus: How Cutting-Edge Do You Need to Be?
Mainframe analyst Steven Dickens and Rick Schoonmaker, director of product management for IBM Z and LinuxONE hardware, explain what you need to be thinking about at this point in the hardware cycle
Sometimes, it’s about the technology. Sometimes, it’s about the timing. But every few years, mainframe shops have a decision to make: Upgrade to the latest and greatest server or wait for the next cycle of innovation.
Some enterprises choose to re-up every generation without fail. Some follow an every-other-generation cadence. Some wait far longer.
To better understand the factors influencing enterprises’ upgrade calculus following last year’s z17 release, TechChannel spoke with mainframe analyst Steven Dickens and Rick Schoonmaker, director of product management for IBM Z and LinuxONE hardware.
It’s About More Than Capacity
Shops that are doing just fine on the z16, performance-wise, probably wouldn’t upgrade just for the “speeds and feeds” improvements, but they may find reason elsewhere in the stack, says Dickens, CEO and founder of HyperFRAME Research. Dickens notes the single-thread transaction performance in the z17 is about 10% improved, meaning raw horsepower will not be the primary motivating factor for most of those currently on the z16.
“If you are stretching your current z16, then you’d want to upgrade to z17, but there’s going to be so few customers that are stretching the single-thread performance envelope,” Dickens says.
Shops opting to leap directly from one generation to the next are likely doing so due to the hardware’s feature-level changes as opposed to the compute capacity. That includes security algorithms, compression technology and, especially with the z17, AI capabilities.
Emblematic of this push is the introduction of the Spyre AI accelerator. Only available for z17 and Power11, the PCIe-attached card can be coupled on the mainframe with the Telum II processor for both low-latency, on-premises AI inferencing as well as generative AI and agentic capabilities. IBM cites Spyre and Telum II use cases including:
• Real-time fraud detection
• Insurance risk assessment
• Skill-building with watsonX Assistant for IBM Z
• Agents for AIOps
Conversations with product experts may reveal more. “Sit down with IBM and ask, ‘What are the 10 things we could do with this Spyre card that would change our business?’” Dickens advises.
Fewer Generation Skippers
IBM’s strong 2026 Q4 financial results—with Z revenue up 67%—suggest that many customers are choosing to upgrade directly from z16 to z17, says Rick Schoonmaker, director of product management for IBM Z and LinuxONE hardware. “I mean, look at the financials we just put out. That’s not generation skippers. That’s people going every generation,” Schoonmaker says, crediting IBM’s client-centric design approach for yielding capabilities that customers find immediately helpful.
One challenge routinely cited by mainframe shops is the retirement of veteran technologists who are taking their decades of mainframe expertise with them. Schoonmaker says IBM is trying to address this challenge by supporting AI workloads that make the mainframe more accessible to new developers. “You’ll notice in z17 one of the big things we’ve been talking about is simplification and how clients use the system, interact with the system, how they modernize their apps and things like that,” Schoonmaker says.
AI weighs heavily on the minds of clients, Schoonmaker notes. “We all see in our everyday life what AI is doing.” he says. “ … It’s inserting itself everywhere. And that’s no different for our clients.”
Preparing for Quantum
While IBM has made AI a major focus of its latest servers, that conversation inevitably bleeds into security, and security is a major factor in another emerging technology: quantum computing. Anticipating the day when hackers will be able to use quantum computers to break traditionally unbreakable encryption, IBM introduced quantum-safe encryption algorithms to the mainframe with the z16; the company continues to emphasize quantum-safe encryption with its latest server.
The date when quantum computing will be able to break today’s standard encryption is unknown, but security experts warn that hackers have the option to “harvest now, decrypt later,” stealing data and waiting until they have the quantum technology to decrypt it.
“We’re talking to our clients—‘You have got to get on board to get ahead of this threat,’” Schoonmaker says. “Many quantum roadmaps say that the breaking of our current encryption standards will happen before 2030. This is coming and we want to ensure they are prepared.”
Watching the Calendar
Often, the date on the calendar and the terms on the lease are the deciding factors in whether to upgrade. Those still on z15 are heavily incentivized to upgrade to z17 since additional capacity can no longer be purchased or activated.
Those who skip a generation still tend to keep their OSes, DBMSes and compilers current, Dickens notes, but not all customers are as concerned with staying up to date. Some mainframe shops are as many as five generations behind, he says.
“They’re kind of limping along. Nothing’s current. Everything’s an end-of-life panic to keep a subsystem up to date,” Dickens says.
He adds that tend to be smaller clients—sub-20,000 MIPS—led by CIOs who perennially seek to migrate away from the mainframe.
“These will be the guys where the last three CIOs have said, ‘We’re getting off the mainframe.’ And the current CIO is still saying they’re going to get off the mainframe,” Dickens explains. “So they can’t buy a new mainframe, but they’re 15 years into getting off the mainframe and they’ve not moved a single thing off, and the team is going, ‘Can we just buy a new mainframe already?’”
In these shops management thinks the mainframe is a nightmare because their machines are 15 years old, he says. “They don’t break. They don’t fail. They don’t go down. That’s kind of their biggest problem,” Dickens observes. “ … If they broke every five years, then people would upgrade them, but they never break.”
Managing the Lease Cycle
In Dickens’ estimation, the hidden story of the z17’s launch is the lease mechanics.
Those at the end of their lease have an easy decision—simply turn in the keys for a new model. But when they still have time on their lease, things can get more complicated. At that point, the enterprise must determine whether the new server’s improvements make it worth burying those additional payments in a new lease, Dickens explains.
However, the timing of the latest mainframe launch simplified that picture. IBM has typically released its new mainframes on a refresh cycle of eight to 10 quarters. That meant those with 36-month leases would still have payments left when the new generation came out, forcing them to decide whether upgrading immediately was worth the cost of rolling those payments over to the next lease.
But this time around, the refresh cycle was 12 quarters, meaning more mainframe shops had already reached the end of their leases when the new mainframe came out, Dickens notes. He estimates that commercial dynamics like this account for 50% of the strong z17 sales figures, with the technology side responsible for the rest.
Lease cycles aside, Schoonmaker notes that the product policy is founded on continuous innovation with backward compatibility, to safeguard the clients’ existing investments. By preserving the value of prior investments, they establish structured pathways for integrating enhancements through the technologies already deployed in the client environment.
This approach enables clients to adopt the latest technological advances without disruption, maximizing both continuity and long-term value. “So clients that stay current, either upgrading every generation or every other generation, will have investment protection built in where they don’t have to rebuy the entire new machine,” Schoonmaker says.
The Waiting Game
Enterprises who are opting to skip a generation have some dates to keep in mind: The first is withdrawal from marketing (WfM), which ends the period when new hardware can be purchased. “When we announce withdrawal from marketing, you must ensure that you have all of the hardware and capacity that you may need to make it to your next upgrade,” Schoonmaker explains.
The second important date marks the end of the period when that additional capacity can be turned on through the machine’s licensed internal code (LIC).
For the z16, these dates are:
Dec. 31, 2025 – WfM; no more hardware can be purchased
Dec. 31, 2026 – WfM for LIC; additional capacity can no longer be turned on
The Unboxing
When a mainframe customer acquires a new server, the first thing they typically do is test everything in a like-for-like scenario to ensure everything works as expected, including anticipated performance gains. This is a critical step when you’re running some of the most important workloads in the world, Schoonmaker stresses.
After that, they start exploring ways to use the latest generation’s additional capacity and new features and functions. That includes briefings where the parties discuss the machine’s capabilities and explore projects that could put the new hardware to the test.
Maybe the enterprise is looking for a skills solution through simplification. Maybe they want to modernize their DevOps pipeline, overhauling the way they manage and control the system. Maybe they want to identify a project that will test the machine’s AI prowess.
“A lot of people are trying to get value out of that,” Schoonmaker says, “so we are doing a lot of these AI discovery workshops, POCs (proofs of concept) and things like that with our clients.”
These consultations can help uncover capabilities that may otherwise be difficult to identify. “For all the advances that IBM highlights when it releases a new server, there are so many features that don’t make our high-level marketing charts but are nonetheless critical for our clients,” Schoonmaker says.
There are a “large number of things that we fix, update, enhance and bring to each generation that don’t make it up to that high-level messaging that clients do need to think about, too.”