After several years of relentless hardware and software innovation, the mainframe is at an inflection point from being a supporting platform of transaction revenue, to becoming a source of revenue growth and innovation. Organizations are evolving toward what IDC calls the “connected mainframe” in a study they published entitled, “The Business Value of the Connected Mainframe for Digital Transformation.” The platform is transforming from a revenue-supporting machine into a revenue-generating machine and is increasingly playing a central role in organizations’ digital transformation (DX) journey.
The IDC study goes on to emphasize that key steps in achieving the connected mainframe require organizations to modernize and integrate the platform with their internal and external environments. IDC finds that these modernization and integration initiatives lead to new business innovations, which in turn are driving revenue growth and improving organizational operational efficiency.
Adopters of a connected mainframe strategy can achieve more than 300% return on investment (ROI) over five years in their quest for digital transformation.
According to IDC’s research, connected mainframe adopters are generating an average of almost $200 million in additional revenue per year while improving business and IT staff productivity and cutting operational costs. Over 50% of the benefit value came from business productivity gains, realized from higher transaction volumes, new services, and/or business expansion. Furthermore, IDC found these organizations would experience 47% lower cost of operations over five years than if they had migrated off the mainframe to a distributed infrastructure.
Business Value Highlights
300% + five-year ROI
10 months to break even
An average of almost $200 million in additional revenue per year
27% lower mainframe licensing costs
52% efficient mainframe management
47% lower overall cost of operations over five years than distributed environments
IDC’s findings are based on extensive interviews with executives at nine organizations that have historically run significant mainframe operations. The goal of this study was to understand how and to what extent these organizations are leveraging the platform to support their DX initiatives and share those best practices so that other IT leaders can make informed business decisions as they evaluate their mainframe plans and strategies.
This IDC study reveals key attributes and examines how faster versus slower adopters accrue the benefits at much different rates. The research also looks at how organizational and cultural stances toward the mainframe platform impacted the speed at which organizations made progress on their digital transformation efforts. In summary, the IDC study found the following:
- Organizations with a business-first approach accrued much greater value generation. By business first versus platform first, we mean organizations that are committed to finding the fit-for-purpose platform to fulfill business objectives first and as such are evolving IT as a coherent team that utilizes infrastructure resources in the most optimized
- Companies that look to extend the mainframe see much larger business value benefits versus organizations that are looking to migrate or starting afresh. Many participants in the IDC study noted that reusing mainframe assets to deliver new services was easy and cost Conversely, at least one organization that attempted migration reported experiencing buyers’ remorse.
- Participants that had a higher cultural acceptance of the mainframe as an integral part of a connected ecosystem also returned greater benefits. Most of the IDC study participants considered the ability to integrate the mainframe with other components of the datacenter as a mantle of IT agility and as a competitive
- There is a growing realization that innovation on mainframe is actually feasible. The IDC study participants realized that the capabilities have matured significantly and are seeing results by adopting just a few capabilities such as Java, internal APIs, or As a result, the participants are realizing that they can deliver innovation at a pace comparable to the rest of the IT organization.
That said, even with the compelling economic benefits, the biggest reason for slow adoption of the connected mainframe is inertia. Cultural notions about the platform have been slow to change. Many of the IDC study participants expressed frustration with outdated perceptions in the organization that are not considering future potential. IDC believes that the mainframe has a central role in digital transformation; businesses that do not take advantage of its broad range of capabilities are giving up value and, potentially, competitive advantage.
For more on mainframe integration, check out the full study by IDC Business Value of the Connected Mainframe for Digital Transformation
-Amanda Bierfeld Williams, Marketing Coordinator at GT Software