The Future of Mainframe Modernization: Where Are We Headed?

COVID-19’s impact on the IT industry has been transformative, and mainframe modernization, in particular, has accelerated in new and impactful ways. But what’s the status of this industry now, what’s still to come, and how should business leaders adjust successfully? Cameron Jenkins, EVP for Advanced, takes a closer look.

The pandemic’s disruptive force on the enterprise made 2021 the year of tremendous momentum when it came to digital transformation and modernization. From technologies that supported remote workforces, to more robust cybersecurity systems and efforts surrounding hybrid and multi-cloud infrastructures, worldwide IT spend increased 8.6% from 2020 ($4.2 trillion total), and organizations market-wide started to embrace and adopt the tools and operational strategies that would enable more nimble and digital-forward business approaches more than ever before. 

While agility and advancing business growth are undoubtedly top priorities for executives today, the actual reality is that there’s still a lingering and widespread disconnect between this innovative future and one of the most fundamental pieces of enterprise foundations: mainframes. 220 billion lines of outdated, 50-year-old COBOL code are currently still in production, and according to IBM, 45 of the top 50 banks, four of the top five airlines, and seven of the top ten global retailers rely on mainframes, in addition to numerous government agencies, healthcare providers, and insurance brands. 

But as more companies mitigate risk, the emphasis on overall IT success strengthens, and the industry addresses these challenges more directly. The previous paradigm is starting to shift in impactful ways.  

So, what’s the status of mainframe modernization today, and how should business leaders adjust? Here are four primary points to consider as leaders look on the horizon.

1. Status quo is no longer an option 

The COVID-19 pandemic put a spotlight on the negative impact the reliance on legacy systems can have, especially but not limited to the government sector. Prior to 2020, many companies avoided modernizing out of the fear of cost, time, and resources needed to pursue difficult projects tied to mission-critical workloads. But the need to modernize became all too real in 2020 when systems began to fail against pandemic constraints, and executives are much more in tune with pitfalls they need to avoid to survive and ultimately thrive in our digital world. 

In 2021, many companies that pursued modernization mainly focused on moving simpler, low-hanging predecessor and ancillary systems to the cloud, using that process as a proof of concept on how these efforts could potentially work for bigger, more nuanced projects. Against newfound success, this has since armed many IT leaders with the right evidence to make a case for complex migrations with key decision-makers, who are becoming more willing to allocate greater funds and investments in this area than they were pre-pandemic. Now, companies are in a much greater position to tackle more intricate, mission-critical workloads and kick off sweeping projects that take greater advantage of the new environments they’ve started to move to and in more advanced ways.

Those that have remained status quo though will feel even greater pressures to embark on this journey if they haven’t already, including across finance, insurance, and government where the need to effectively support heavy volumes of critical workloads demands greater IT flexibility on the back end – not just on front-facing customer portals or mobile apps. Even other verticals like healthcare, which have historically lagged in technology and system innovation, are going to begin looking for new ways to modernize their legacy applications in light of the pandemic. 

See More: Is It Time To Look Beyond Mainframes in the Hyperscale Era?  

2. The influence from cloud providers is here to stay  

Realizing an opportunity for growth, more and more tech giants have started to take note and put mainframe modernization further on the map – even within the last several months. Between strategic M&A activity, targeted marketing campaigns, and an overall greater focus on application modernization and movement to the cloud, the market has increasingly become ripe for opportunity across the board, and mainframe modernization is a space that will only continue to heat up. 

One of the reasons is that cloud providers like AWS, Google, Microsoft, and Oracle offer the infinite horizontal scale on-demand needed to maximize companies’ potential and effortlessly address a problem that has plagued many of those reliant on vertical, rigid legacy systems before. Now, between new services, products, and partnerships – these companies will only continue to invest heavily in their existing customers to compete to be their platform of choice and through a suite of services and solutions –will make these customers significantly stickier. 

As part of this, the industry will likely see cloud providers innovate these solutions further – whether through hosted legacy systems, AI, and cross-platform data replication – to ease the burden of migration and evolve these processes.  

3. The IT skills gap must be addressed 

The IT skills shortage has and continues to be a persistent challenge for today’s organizations and will have a more profound, tangible impact as budgets start to focus more heavily on cloud and automation. Executives view the shortage as the most significant barrier to adopting emerging technologies, and 89% say they’re specifically concerned about having access to the right IT talent to maintain and manage their legacy systems. 

And with good reason. Only a small percentage of the country’s existing talent pool know-how or are willing to manage legacy programming languages and databases prevalent across mainframes today like COBOL, Adabas, Assembler, and IDMS, and that number continues to dwindle as IT staff retires or leaves their current posts. 

To solve this, organizations must further prioritize on-the-job, cross-training practices and tactics like job-sharing and more formal mentorship programs. These bridge legacy with new talent and help retain vital information about a system while laying the foundation for modernization and long-term corporate success. 

4. ESG is coming 

IT is often targeted as an energy “cost center.” Data centers alone use 3% of the global electricity supply and account for about 2% of greenhouse gas emissions, equivalent to the aviation industry’s carbon footprint. And while the organizations that rely on legacy applications are often aware of this fact, it hasn’t been a well-regarded motivating factor to address until now directly. 

But as every industry starts to rethink operations in support of more sustainable business practices, enterprise IT leaders that aren’t contributing to this movement will start to face more scrutiny against industry standards, and both external and internal pressures will continue to grow to not only talk-the-talk but walk-the-walk when it comes to enterprise, social and governance (ESG). Automating tasks and efficiencies will become essential, and the cloud will inherently become a core factor in that equation. 

While enterprise IT is undoubtedly facing hurdles that leaders will need to overcome – there is also a great deal of support to help them get there today. The companies that quickly recognize where both challenges and opportunities lie and face them head on with tailored solutions, technology, and partners will be the most primed to drive desired results and implement the right foundation to build even stronger digital transformation strategies moving forward. 

What do you think has been the most significant transformation in the IT industry brought about by the pandemic? Tell us what you think on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window !

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