“I predict that the last mainframe will be unplugged on March 15, 1996.” This forecast, made by former InfoWorld editor in chief Stewart Alsop in 1991, proves more highly exaggerated with each passing year. Mainframes continue to run inside many of the world’s largest companies, including banks, retailers, insurance companies and airlines, supporting their daily transactions.
As they prepare their technology infrastructure to participate more fully in the digital economy, these organizations realize it’s often better to retain what’s already working for them by integrating and modernizing their mainframes to meet changing business requirements – not just get rid of them. Using a “mainframe-inclusive modernization strategy,” these organizations can make their current operations as efficient and cost-effective as possible while investing in digital innovation.
Mainframe Modernization: Key Drivers
Mainframe modernization doesn’t mean continuing to run big iron systems in their current state. Three factors make doing so prohibitive:
- Cost of maintenance: The costs associated with monthly license charges and monitoring and database tools are increasing 4% to 10% annually, putting a huge burden on organizations.
- Lack of agility: Although some mainframe vendors have begun implementing the DevOps model for software development, most projects are based on the waterfall approach, which significantly lengthens time to market.
- Critical skill shortage: With baby boomers’ retirement, there’s a critical shortage of mainframe systems programmers and application developers. With most colleges and universities dropping mainframe courses from their curriculum, it’s challenging to recruit talent with relevant skills.
A Hybrid Approach to Modernizing Legacy Systems
A mainframe modernization approach addresses these challenges to a large extent, without throwing away the beneficial aspects of retaining mainframe operations. There are three hybrid approaches to mainframe modernization, each of which presents different benefits, costs and risks.
The three approaches include:
- Mainframe as a service (MFaaS): With this approach, businesses shift to a pay-per-use model, using the provider’s mainframe hardware, software licenses, data center operations, dynamic disaster recovery and high-availability features. The flexible pricing enables businesses to pay for “MIPS consumed” against the “installed MIPS” in any given month. Because the service provider owns the infrastructure and pays for maintenance and upgrades, the business enjoys the benefits of risk avoidance and cost reduction.
Our client Alliance Data shifted to a MFaaS approach when it concluded that its infrastructure had become too complex and costly to maintain, and couldn’t keep up with peak loads. It was also impossible to determine the root cause of system problems. We migrated the organization’s mainframe workload into our data center, with 24×7 onsite-offshore support for the mainframe infrastructure. We also replaced the business’s continuous manual monitoring with automated service management, reducing operational costs by 20%. Alliance Data realized a $25 million reduction in total cost of ownership (TCO), and the project was completed on-time and within budget, with no downtime.
- Managed mainframe services: This approach is best for organizations that prefer to own the mainframe software and hardware assets but find it challenging to manage mainframe operations in-house due to high costs and a lack of critical resources. In these instances, the vendor performs end-to-end management of the business’s mainframe infrastructure. For organizations with an existing mainframe infrastructure, this model offers the flexibility of using the latest mainframe technology, along with timely patches and updates.
We worked with a leading U.S.-based insurance company to reduce TCO for its mainframe environment by providing hosting and infrastructure management services based on a pure OpEx model. We migrated the insurer’s mainframe workload using our dedicated primary and disaster recovery mainframe infrastructure. We also provided 24×7 onsite-offshore infrastructure support, automated service management and compliance with the company’s service level agreements. As a result, the insurer reduced its operational costs by 15% and its TCO by $5 million.
- The 5R’s approach: A third option is the 5R’s approach: retire, retain, replace, rehost and reenvision legacy applications/systems. While MFaaS and managed mainframe services are the basic outsourcing options that businesses can avail without impacting or changing any of their existing applications, the 5Rs approach takes an application modernization-based approach. As the name implies, businesses can choose to retire an existing application, retain and rehost it in a cloud environment, replace it with a new application or completely reenvision it, based on the condition of their existing mainframe infrastructure, application requirements and business goals.
For a large insurance provider in the U.S., we migrated four mainframe batch applications to a Microsoft Azure Virtual Machine environment, using the Micro Focus Enterprise Server 3.0 platform. We ensured secure data transfer via SFTP using WinSCP, secured data access via SSL, and secured user access integrated with enterprise Microsoft Active Directory and Microsoft AD LDS. The reusability of the existing application architecture ensured minimal impact to the business, and the insurer can now rely on versatile application performance under high load volumes.
For most companies, it’s not an option to simply turn off legacy systems. It’s also not feasible, however, to keep mainframes running in an as-is state. By choosing the best hybrid approach to mainframe modernization, businesses can address their legacy IT challenges by optimizing costs, and improving the agility and efficiency of the organization.
To learn more about our hybrid cloud-based mainframe modernization capabilities, visit our microsite.
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