So IBM has reinvented the mainframe, apparently reducing the behemoth to a blade.

Sources say it's ported its precious z/OS to a newfangled 5.2GHz quad-core z processor with two times the cache of the old z10 chip and a hundred new instructions, built a new z196 system round it, stuck it in a chassis, otherwise called a cage, added a BladeCenter Extension - Power7 blades that'll run AIX and x86 blades running Linux - thrown in a Unified Resource Manager and has the whole lot sharing memory and disk space.

It has, they say, achieved its fondly held dream of a converged architecture. And this, as they also say, is a very big deal.

If it wasn't for all that trouble with the regulators, one might conjecture that IBM's trying to make mainframe iron relevant to a new generation of IT people. It's clearly chasing new customers, new workloads and the cloud.

IBM has been briefing its nearest and dearest followers for days under NDA about every conceivable nuance of the box called - for the moment at least -either the zNext System or the zEnterprise System and it has a clutch of the things out with large accounts.

The system will reportedly be announced in New York in mid to late July (July 22's looking likely) with so-called pre-ships going out immediately and launch in volume this fall, probably in September.

It's supposed to cost a third less than what IBM usually charges for mainframes but the pricing picture is probably more complicated than that.

The whispers say zNext will run all the z/OS widgetry back to goodness knows when and OS/400 on Power7 blades by the end of the year. Throw in AIX, Linux and maybe Windows and that's why it's also called a "system of systems."

It brings to mind the Platform Solutions (PSI) box that IBM bought so it could yank it off the market. The PSI machine ran Windows, Linux, Unix, Open VMS and z/OS on Itanium chips way cheaper than IBM could on its mainframes. That's why IBM smothered the thing in its cradle.

Now Blue has IBM-ized the concept and gone PSI one better. In zNext, which appears to involve single-function appliances too, the environments are integrated. The multi-OS resources are supposed to function as a single, logical, virtualized system.

Applications run on the zExtensions will bask in the reflected glow of the mainframe's qualities of service.

Likely to be advertised as a great leap in virtualization, IBM will play it as ideal cloud infrastructure.

Reportedly the shared virtualization IBM is using is Red Hat's very own KVM.

The Duquesne Group thinks this "consolidation of platform under the zSeries roof" puts IBM squarely on the road to a "data center in a box" managed by a new species of hypervisor or "control hyperprocessor."

Among other things, the widgetry may distract customers toying with using Neon's zPrime software to lower their workload bills. At a guess it looks like virtual servers could ultimately replace the ZiiP and ZaaP specialty processors Neon is currently exploiting in a threat to IBM's revenue stream.

Reading off an IBM PowerPoint, zNext or zFuture is supposed to "reduce cost, reduce risk and improve service," and be positioned as being easier on power consumption, utilization, resource management, communication, RAS and of course elasticity.

IBM is reportedly throwing all its software into the mix. Users should prepare for a deluge.

All this automation is going to cost jobs but of course IT companies never say it that way. IBM's got all sorts of "value" statistics.

The modernization move will reportedly change the outsourcing equation.

It will also put companies like CA and BMC that have always depended on the old mainframe for much of their revenues in a pretty pickle. Sources say the zNext or whatever IBM ultimately deems to call it won't need their scheduling, security, disk management and systems management software.

Maybe that's why CA, for one, has realigned into two new organizations: a Customer Solutions Group and a Technology and Development Group. The Customer Solutions Group, headed by newly recruited ex-Corel CEO David Dobson, includes five customer solutions units, each a strategic business unit responsible for its own P&L. The self-explanatory Technology and Development Group will be headed Ajei Gopal. If IBM gossip is right Dobson used to be CA CEO Bill McCracken's boss back in their Blue days.