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After half a century of strength, the mainframe has a few looming obstacles to overcome. The platform will soon face a moment of reckoning brought on by an impending skills shortage, and 79% of respondents to Deloitte’s 2020 Mainframe Market Pulse Survey said acquiring talent was their biggest challenge, with 71% indicating existing teams were understaffed. These aren’t insignificant hurdles, but the survey also tells a different story — one of the platform’s peerless utility and longstanding future.
An incredible 91% of respondents said that expanding the mainframe’s footprint was a moderate or critical priority over the next 12 months, and nearly three-quarters (72%) were planning mainframe upgrades over the next three years. While these shops could be trying to achieve many different things by upgrading their mainframe hardware, a major benefit they’re looking for is cost-savings over more dated machines.
More Modern IT Comes With More Cost
The mainframe’s efficiency often fails to distract organizational leaders from the fact that it’s still a significant expense. Data from Arcati’s 2019 Mainframe Yearbook indicates that mainframe budgets eat up 20% to 40% of total IT expenses for 80% of survey respondents. Never mind the fact that the platform runs 68% of production IT workloads around the globe while incurring a paltry 6% of costs — to some of the more “old-school” members of the c-suite, IT’s strategic importance goes ignored and the department is viewed as little more than a cost center to be minimized. So how can you justify an expensive hardware upgrade?
In early 2021, IBM announced the impending release of z/OS 2.5, designed to support agile business use cases for hybrid cloud, offer improved AI capabilities and facilitate management by administrators without special skills. To take advantage of z/OS 2.5 when it’s released in September 2021, organizations will need a z13 or newer machine. Other advantages of new mainframes include compelling security benefits for organizations with sensitive data or those in highly regulated industries, as well as a substantial ROI. With faster and more powerful machines and a host of new features, companies can expect to see reduced CPU usage. That means they can also use a smaller machine to run the same workloads, lowering software costs that are tied to machine size.
To make switching even more appealing for organizations that might be on the fence, IBM came up with something called the “Technology Dividend” in 2003. Essentially, the Technology Dividend applies MSU ratings to each new mainframe machine that lowers the cost per MSU by about 10%. Say a z14 machine had a rating of 1000 MIPS and the z15 offered a 10% improvement — IBM would apply a similar MSU rating to the z15, meaning customers could achieve a 10% performance improvement at essentially the same cost.
Incentivizing Upgrades
IBM knows that mainframe shops are always being asked to reduce costs, which is why Big Blue offers plenty of resources to justify an upgrade. In particular, IBM IT Economics Assessments illustrate how hardware improvements impact costs. Over a five-year period, for example, going from a zEC12 to a more efficient z15 can reduce software costs by 30%, while the switch from z13 to z15 nets a 12% lower software cost.
Because a new mainframe requires a substantial upfront investment, organizations will need to look at their unique needs and budgets to decide if the future savings is worth the outsized expense. In plenty of cases, the numbers won’t add up no matter how tempting IBM tries to make the switch. In those situations, we encourage mainframe shops to consider using Cloud Compiling to consolidate license fees and shift mainframe workloads to the cloud. We offer organizations a free Proof of Concept to demonstrate the ease of setup and potential savings, and unlike other, more expensive efforts, our pricing structure guarantees an immediate ROI for our customers, and no upfront investment is necessary. It’s just one of the ways we’ve helped Fortune 500 companies save millions in mainframe expenses.
For more information about moving compiles to the cloud and dramatically lowering license costs while improving performance in your own organization, reach out to one of our technologists today.