IBM debuts z16 mainframe built in Poughkeepsie: 'Center of the universe will remain here'

In April 1964, to meet the need of an emerging technology market for a uniform computer system, IBM introduced the revolutionary System/360 mainframe.

The product of a $5 billion research and development investment — roughly $46 billion by today’s standards — the 360 was capable of handling thousands of users’ needs simultaneously.

On Tuesday, IBM introduced the z16 mainframe, a product which utilizes artificial intelligence, with productivity measured in the billions.   

The products seem as dissimilar as dinosaurs and birds.

But both were created in Poughkeepsie.

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As has been the case for nearly 60 years, the Hudson Valley is where IBM’s latest mainframes are produced and distributed.

"It's our people and innovators that are really the key and a lot of them live here in the Hudson Valley and in Poughkeepsie, and I don't think that's going anywhere," said Ross Mauri, general manager for IBM Z systems, the company’s latest series of mainframes, which debuted in 2000.

The z16, which was tested and manufactured in Poughkeepsie, is being touted as a step forward in the ability for credit card, health care, financial and other companies needing to protect customers and their private information from fraudulent activity.

The z16 is smaller physically than IBM’s previous Z models and has the ability to safely process high volumes of transactions faster.

"No one has applied AI the way we have in this system,” Mauri said. "This is an industry first. We put the (artificial intelligence) accelerator right onto the microprocessor.”

The Armonk-based company employs roughly 3,000 at its Poughkeepsie site. Mauri, a graduate of Franklin D. Roosevelt High School, is responsible for all facets of z System’s business, including technology development and overall financial performance.

As has been the case for decades, the newest mainframe is a product for large companies, and is not a product consumers can pick up at the Poughkeepsie Galleria. However, IBM notes anyone with a credit card or who shops online will interact with the mainframe’s security measures without ever knowing it.

And, Mauri noted, the continued success of the mainframes coming out of Poughkeepsie continue to make it a valued part of the company.

"This will become a very important global site as we leverage quantum computing capability with our clients delivered through the IBM cloud,” he said. "The center of the universe will remain here." 

What the z16 does

A credit card company has two options, explained PJ Catalano, IBM systems test and automation architect.

When a customer uses a card to make a purchase, if its fraudulent and the company lets the transaction process, it will have to absorb the cost. If it's not fraud, and the card is declined, the customer may choose to use a competitor's card. 

There are thousands of these transactions happening daily, either at stores or online.  

"We can decide, when you swipe the card, whether its fraud or not," Catalano said. 

Consumers would spend less time having to resolve fraudulent activity on their credit cards and retailers would lose less money using the z16, he said.

IBM introduced its Telum processor in August. The processor, developed with Samsung, contains "on-chip acceleration for AI inferencing while a transaction is taking place." IBM z16 will be able to process 300 billion inference requests per day with a millisecond of latency. 

"Our clients can increase decision velocity with inferencing right where their mission critical data lives,” said Ric Lewis, senior vice president for IBM Systems, in a release. “This opens up tremendous opportunities to change the game in their respective industries so they will be positioned to deliver better customer experiences and more powerful business outcomes."

What's happening in Poughkeepsie?

IBM said the z16 is the product of three years "making significant investments in service of our commitment to embrace open-source technology on the platform and establishing a common developer experience across the hybrid cloud." 

The warehouse and manufacturing floor in Poughkeepsie, where all the z16 models will be shipped out from, is cleared as the first quarter ends and IBM gets ready to make its new model available, likely on May 31.

The Poughkeepsie plant has the capacity to ship 300 orders a quarter, said Alex Jorge-Ortiz, manufacturing program manager. The plant has the ability to expand its output. 

While IBM cannot say which companies or current customers may place orders for the model, they are certain there is demand. 

"We've interacted with more than 70 enterprises of our large clients. We have more than 1,000 hours of direct interactions on these different features and functions and in many cases they've run the software already, they've been on the hardware and tested things out for themselves," Mauri said. 

Saba Ali: Sali1@poughkeepsiejournal.com: 845-451-4518: @MsSabaAli