Competing for the attention of an increasing number of businesses that are turning to lower cost PC-based enterprise servers, IBM has announced next-generation systems with a smaller footprint as well as improved security and performance.

The new zEnterprise EC12 mainframe cost IBM $1 billion to develop and offers 25% more performance thanks to the company's new hexacore processors. Clocked at 5.5GHz, they're the world's fastest server chips and will be offered in multiple configurations with as many as 120 cores available. All models include transactional execution support as well as Enhanced-DAT2, allowing for 2GB page frames for more efficient utilization of huge quantities of RAM.

Another important feature is IBM's cryptographic co-processor, Crypto Express4S. The tamper-resistant hardware provides privacy when handling transactions and other sensitive data. It offers multiple security configurations to support the needs of banks and other organizations handling sensitive data, such as the information on smart passports and ID cards. IBM's new mainframe is also the first to utilize solid-state technology with Flash Express, which improves the performance of data-intensive applications and workloads where optimal service levels are crucial.

"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 research firm Pund-IT. He added that most companies now depend on banks of cheaper PC-based servers in place of more traditional mainframe systems.

Despite having thousands of mainframe customers worldwide and benefiting from wider adoption in emerging markets, overall demand is set to decline 14% over the next five years, according to Gartner. In contrast, sales of X86-based servers are predicted to grow by 10% this year, increasing 33% to $47 billion over the next five years.

The zEnterprise EC12 will be available next month with prices starting at around $1 million.