IBM is aiming its brand new z10 mainframe, the one that bowed this week, straight at the garden-variety x86 server.

Well, the 1,500 garden-variety x86 servers the new mainframe can replace – using maybe 85% less power and definitely 85% less space.

And that includes virtualized x86 servers – an increasing functional threat to the mainframe – ‘cause, you see, the z10, IBM’s first new mainframe since 2005, was built to run circles around virtualized x86 servers and support anywhere from hundreds to hundreds of millions of users.

IBM sniffs that businesses are trying to move “beyond basic virtualization (in which different computing tasks are partitioned on a server) to an environment in which their entire IT infrastructure, including business applications, security, storage, and processing power is provisioned on-demand.”

The mainframe may be an old warhorse but IBM has decked the z10 out in modern trappings, talking about it managing IT as a service.

The z10, which starts at a million dollars – arguably cheaper in the long run than hundreds of industry standard servers – is the first mainframe to use quad-core chips, 64 of them, and is 50% faster than the current z9 – sometimes showing a 100% performance improvement over its predecessor – with 70% more capacity.

It will, as one might expect, support Linux, XML, Java, WebSphere and increased workloads from SOA implementations and the z10 is the model that IBM will use to pilot Sun’s OpenSolaris.

It’s supposed to be able to consolidate x86 software licenses at up to a 30:1 ratio.

In five out of the last seven quarters IBM’s mainframe revenues have grown along with MIPS shipments in part thanks to double-digit sales growth in the emerging world. Last quarter, however, revenues were down 15% as customers postponed purchases waiting for the new model.

One cute trick IBM taught the z10 – complements of Rational software – is to translate COBOL applications in Web Services so young developers don’t have to learn the old language.