Mainframe reinvention: a digital growth catalyst

25 May, 2017
David H. Deans

What if your organization could sharpen its competitive edge? What if your enterprise could shift industry trends in its favor by leveraging existing IT infrastructure? What if your company’s experts could foresee a compelling new customer experience, then quickly develop and deploy an online solution that’s ahead of your peer group?

Today, across numerous industries, many CEOs are seeking answers to these key questions in their quest for digital business growth. They’ve engaged their CIO or CTO to consider all of the viable options, then propose a progressive hybrid IT roadmap for the CFO to endorse.

Since the beginning of this year, I’ve reviewed the findings from a broad spectrum of business technology market research. I previously shared my observations about the ‘systems of innovation’ phenomena that has enabled clients to reap the full potential of their application development on z Systems servers. Now I’ll share findings from another related market study.

The mainframe valuation

At our request, IDC selected and interviewed nine organizations with significant mainframe operations and three additional organizations that provided qualitative feedback for their independent study. The enterprises they chose were diverse and included multinational organizations.

Per the IDC study, these organizations all rely upon their mainframe platforms to support their most critical internal and customer-facing operations that generate billions of dollars of revenue each year.

The IDC study has determined that organizations pursuing what they have labeled a “connected mainframe” strategy are engaged in two IT infrastructure initiatives that drive business innovation – ongoing modernization and application integration.

Pervasive business-oriented benefits

Study participants reported significant financial and business-oriented benefits, gained by operational efficiencies derived from their connected mainframe initiatives. While specific use cases varied by study participant, collectively they had a common connection between increased mainframe performance and their desired business outcomes.

The organizations in the study are experiencing tangible value in the form of measurable cost reductions and streamlined commercial operations. Across these connected mainframe initiatives, the IDC study’s analysis assessed the annual value for study participants at an average of $181,900 dollars per application ($56 million per organization) per year, over five years.

Reaffirmation of mainframe value

If you think that perhaps some of the organizational leaders that choose to invest in mainframe platform upgrades do so without a thorough return on investment (ROI) assessment, you’d be mistaken.

In fact, despite the documented tangible benefits for organizations that invest in modernizing their mainframe platform, all of the studied organizations periodically reassess the derived value of their platforms and reconsider using one of the popular alternatives.

However, the IDC study determined that during this — as well as from reports of multiple client organizations’ own ROI analyses — they’ve demonstrated that remaining on and investing in mainframe platforms is more cost effective. Why? Because the strategy has proven to consistently deliver greater business value than migrating to another IT infrastructure.

Case in point: organizations that chose to remain on their mainframe platforms are realizing a five-year cost of operations that is 47 percent lower on average — considering the expense for hardware, maintenance, licensing, power, facilities and IT staff management time.

IDC conclusion from study findings

IDC researchers believe that, based upon verified results, savvy IT organizations could achieve their digital business agenda by fully utilizing their infrastructure assets. The adopters of connected mainframe strategies invested an average of $46 million dollars in new mainframe hardware, software and tools to realize five-year discounted benefits of $201 million dollars per organization, and a five-year ROI of more than 300 percent with an average break-even period of 10 months.

This editorial includes a short summary of the comprehensive 20-page IDC white paper, sponsored by CA Technologies and IBM, titled “The Business Value of the Connected Mainframe for Digital Transformation.” Download it now to explore the background data plus tables and charts that accompany their research findings.

The mainframe has experienced an unprecedented track record of perpetual reinvention, where ongoing technology refresh cycles and trailblazing scientific advances have assured its place in forward-looking digital growth plans. To learn more, review our customer success stories, then reach out to an IBM representative or business partner.

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