Are you calculating your mainframe TCO all wrong?

When it comes to pursuing digital innovation, CIOs and CTOs face the relentless challenge of balancing business transformation with cost efficiency. Although these objectives might seem at odds with one another, a comprehensive IT strategy that integrates the mainframe, cloud and AI can deliver abundant value. 

There are hundreds of AI use cases for customers who want to deploy the technology within mainframe transactions. It is a common misconception that moving entirely off the mainframe is the most cost-effective solution as these systems continue to play a unique role in integrating AI within a hybrid architecture strategy. With the rise of AI and hybrid cloud, it’s time to reconsider the total cost of ownership (TCO) and unlock the untapped potential of mainframes.

Traditional TCO calculations that focus simply on the monetary costs to purchase and operate technologies often underestimate the value of mainframes. By limiting their analysis to this singular metric, enterprises overlook the savings and value that mainframes can bring. Modern business strategists must rethink how they calculate TCO by opting for a more detailed analysis that considers the mainframe’s evolved capabilities.

Power consumption and maintenance cost requirements are significant areas for comparison. When choosing the mainframe over the equivalent number of x86-based servers, businesses can save immensely by optimizing their energy efficiency. Cost-saving opportunities present themselves in several other factors related to mainframe deployment. Significant savings might also lie in software licensing costs. Many vendors charge by the core, and a mainframe can do the same work with far fewer cores than a server farm solution.

Once organizations place the mainframe into action, there are even more elements to consider that a traditional TCO analysis might overlook. Unplanned downtime or a security breach could result in a significant loss for a company. However, enterprises can use the security and reliability of server platforms to help avoid the costly repercussions of such events.

Modern mainframes are not cost centers. They are major value generators that drive business outcomes as part of a holistic IT infrastructure. They help businesses achieve return on investment (ROI) faster and reduce the risks and costs associated with unplanned downtime. In addition to mission-critical uptime, features such as built-in redundancy and fault tolerance make these systems invaluable to organizations where consistent service is a must.

Mainframes stand out for their exceptional reliability and availability while also offering scalability and long-term value. Designed to handle massive workloads at high speeds, mainframes can support thousands of transactions per second. Industries, such as banking, rely on this performance, especially during peak times such as holiday shopping.

Generating more value with the mainframe also requires organizations to take a closer look at their most valuable resource: data. Mainframes can empower businesses to extract insights faster and make data more available to authorized users while still maintaining a secured computing environment.

Cryptographic processors, pervasive quantum-safe encryption and AI-enhanced fraud detection are just a few features built into some mainframe hardware. Industries with stringent regulatory requirements find these mainframes to be reliable platforms for their business needs, thanks to robust security, compliance and AI technologies.

Beyond operational savings, with effective usage, the mainframe can also reduce resource requirements, accelerate innovation and support future growth. The most common way that they create a higher ROI is through process improvements that heavily streamline operations, completing tasks that traditionally take days in mere minutes. These improvements reduce time and cost requirements, allowing businesses to go to market faster and push overall efficiency.

Mainframes can consolidate workloads from multiple platforms, optimizing hardware usage, reducing infrastructure costs and delivering scalability without significant performance degradation. This consolidation helps reduce costs by deploying fewer systems for more workloads, sharing valuable resources and improving services to better meet demand.

These improvements can simplify operations and reduce the resources required for maintenance. Organizations can then reallocate talent to strategic initiatives that drive business growth and innovation. Mainframes also help organizations achieve economies of scale while keeping sustainability top of mind by reducing energy and space consumption.

As more enterprises begin to modernize their mainframes, they look for ways to integrate automation and AI into their core business processes and IT operations. In fact, 79% of IT executives see the mainframe as essential for AI-driven innovation and value creation.

A diverse range of industries can benefit from the transformative potential of AI on the mainframe. When looking at TCO and ROI, it is important to view the mainframe as not just a transactional platform, but an evolving AI platform that brings new advancements and capabilities.

AI is a game changer for reducing operational costs and maximizing mainframe efficiency. AI tools can streamline the incident resolution process by predicting and preventing incidents, reducing the mean time to resolution from hours to minutes. Patching systems is much more efficient with AI mechanisms that can predict potential hardware failures and put into place preventive maintenance.

Another use case for advanced AI on the mainframe also includes code assistants, which help boost developer productivity and close skill gaps. These features not only help new users feel comfortable and be more productive but also improve the day-to-day functions of experienced users. Generative AI capabilities also streamline development processes, accelerate application modernization and reduce testing cycles.

AI on the mainframe means a faster journey to business modernization. With AI on the IBM Z® platform, a bank in North America achieved the ability to analyze every payment transaction in real-time to significantly reduce fraud, substantially reduce costs and enhance overall customer satisfaction.

With an on-chip AI accelerator, the bank also improved response time consistency and speed, which is a critical factor in fraud prevention. By embracing AI on the mainframe, the bank was able to elevate its fraud detection capabilities to unparalleled levels.

While moving toward business modernization, it is crucial to still consider energy efficiency and sustainability. By choosing to deploy AI on IBM z16®, organizations can reduce energy consumption for running inference operations by 41x in comparison to a comparable x86 server.

Mainframes drive innovation, economic value and digital transformation. For CIOs and CTOs, the key lies in using AI, hybrid cloud and automation to unlock their full potential.

The new mainframe math is not about pure cost calculations, but about balancing economics and value creation to maximize ROI. By rethinking traditional TCO calculations and emphasizing cost efficiency, organizations can deploy mainframes as economically sound and strategic assets.