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Application modernization on the mainframe

Modernizing mainframe-based applications is a critical element in successful hybrid cloud strategies, holistic digital transformation, and innovation realization.

A vast majority of executives tell us their businesses accelerated transformation efforts last year in the face of rapidly changing market environments. Even more say the pandemic has eliminated long-term barriers to transformation including cultural roadblocks. Dual imperatives of remote working and rapid fluctuations in scale and scope have reconfirmed the centrality of cloud computing.

In short, virtually all the traditions of business have been turned on their head over the past 18 months. But how much of an impact has all the upheaval really had on the fundamentals of IT infrastructure? Do legacy applications have a role in the new digital order? Is there still a place for mainframe?

Results from a recent IBM Institute for Business Value (IBV) survey indicate the unequivocal answer is yes. Technology and business leaders say the mainframe not only remains an important part of their organizations’ IT platforms, it also plays a central motivating role in accelerating their digital transformations.

71% of executives say mainframe-based applications are central to their business strategy.

Executives from some of the largest and most successful businesses assert that mainframe and cloud are not either-or propositions. They are seamlessly intertwined in delivering cutting-edge enterprise-wide agility and capability. And together they help secure operations, reduce latency, and drive legacy processes to levels of dynamic innovation previously only possible for born in the cloud insurgents.

Mainframe and cloud in context

For more than 60 years, mainframe computers have powered mission-critical applications for industries central to the continuing operation of the global economy. Today, 45 of the top 50 banks, 4 of the top 5 airlines, 7 of the top 10 global retailers, and 67 of the Fortune 100 companies leverage the mainframe as their core platform. Mainframes handle almost 70% of the world’s production IT workloads. And 90% percent of IT and business executives from a recent survey view their mainframe as a growth platform, with more than half reporting an increase in transaction volumes over the past 12 months.

What these executives are highlighting is not the mainframe of old. IT leaders are integrating and extending mainframe capabilities to support agility and new business innovation. Digital transformation strategies motivate modernization of underlying systems and, more importantly, the applications that reside therein. The challenge, as usual, is deciding which applications to modernize, determining how to modernize, and identifying the destination for modernized applications. Successful IT leaders with a vision for these elements are rapidly executing and capturing new value.

4 in 5 executives say their organizations need to rapidly transform to keep up with the competition, including modernizing applications on the mainframe.

But some organizations are falling behind. Their leaders urgently need to ask themselves a crucial question: How do I extract more value from my mainframe investment—an investment that supports almost three quarters of my organization’s processing power and the applications that house and operate its core functionality?

To answer these and other questions, the IBV in collaboration with Oxford Economics surveyed 200 top IT executives across industries in North America about both their mainframe systems and transformation strategies and the intersectionality between them. The businesses represented comprise almost 30% of the S&P 500 and drive almost 40% of economic activity in North America— estimated to be more than $9,000 billion in 2021.

Our research reveals that as they transform operations and systems, these organizations seek more comprehensive solutions that integrate disparate sources of data across internal and external processes and systems. Executives we surveyed realize the advantages afforded by modern mainframe systems and the need to modernize the applications that run on these systems for peak agility, flexibility, and performance.

Utilizing their insights and analysis, this report offers guidance on how to extract even more value from mainframe assets. We examine why modernizing applications on the mainframe is a critical element in successful hybrid cloud strategies and, ultimately, how both mainframe and cloud underpin holistic digital transformation and innovation realization.

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Meet the authors

John Granger

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, Senior Vice President, IBM Consulting

Aparna Sharma

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, General Manager and Managing Partner, Hybrid Cloud Services, IBM Consulting

Anthony Marshall

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, Senior Research Director, Thought Leadership, IBM Institute for Business Value

Smitha Soman

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, Global Research Leader, Modernizing and Emerging Technologies, IBM Institute for Business Value

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    Originally published 21 July 2021