Growth Forecast: Mainframe Spending and Cloud Strategies Explored

Enterprise Mainframe Spending Trends Amidst Cloud Growth

Companies using mainframes within their IT operations anticipate an increase in mainframe spending concurrently with their growing adoption of public cloud services. This finding arises from insightful survey research conducted by Information Services Group (ISG), a prominent technology research and advisory organization. The ISG Market Lens™ Mainframe and Mainframe as a Service (MFaaS) Study indicates that a significant portion of large enterprises plans to modernize their mainframe infrastructure.

Survey Findings Highlight Shift to Mainframe Modernization

The ISG study reveals that one-third of large enterprises expect to enhance their existing mainframe processors or storage systems. Additionally, 40 percent of these organizations foresee an increase in capacity for traditional mainframes, while approximately one in six expect to acquire new mainframes over the next few years. This data underscores the continued relevance of mainframes in a rapidly evolving IT landscape.

Strategic Balancing of Legacy and Cloud Resources

According to Alex Bakker, ISG Distinguished Analyst and co-author of the study, "Mainframes remain essential to large enterprises. Organizations are strategically balancing their investments between traditional mainframes, MFaaS offerings, and the public cloud. Despite a surge in public cloud adoption, mainframes will not be overshadowed within enterprise IT. Indeed, the demand for mainframe computing and storage is projected to rise, especially through the adoption of MFaaS."

Increasing Complexity in Enterprise IT Environments

Conducted in July 2024, the ISG study included responses from 200 executives who have decision-making authority over mainframe and MFaaS strategies across Europe and the Americas. Findings suggest that enterprises with the largest IT workloads anticipate the most significant increase in demands across all technology platforms. Furthermore, organizations heavily reliant on traditional mainframes are more likely to transition to MFaaS to meet their further requirements.

Legacy Systems and the Push Towards Modernization

Michael Dornan, principal analyst and co-author of the study, notes that the increasing demand for mainframes reflects enterprises' challenges in retiring aging infrastructure. Organizations often face conflicting priorities, such as integrating AI technologies while enhancing data security and resiliency. Simultaneously, the need for greater application storage and computing power is pushing IT departments to optimize costs effectively.

The Shift to Cloud and MFaaS Solutions

Remarkably, nearly 60 percent of enterprises reported migrating a portion of their applications to the cloud in the past three years, with over 40 percent adopting MFaaS solutions. MFaaS is regarded as a cost-effective alternative that enhances flexibility while sidestepping many challenges associated with traditional migration and security protocols. Additionally, MFaaS addresses the imminent shortage of mainframe talent due to the retirement of skilled professionals.

Priorities for Mainframe Management

The primary objectives for enterprises regarding mainframe management include cost optimization, the retirement of outdated applications and infrastructure, the integration of AI capabilities, and enhancing information security. However, the study found that only information security is perceived as performing adequately. While 54 percent of respondents believe their current mainframe or MFaaS security measures are superior to those of competitors, efforts in cost reduction, AI integration, and legacy system retirement lag behind.

Challenges in Accessing Mainframe Talent

Another key finding indicates that nearly one-third of enterprises face challenges in securing mainframe expertise. The early retirement of seasoned staff diminishes availability, while new hires often lack familiarity with legacy programming languages. As a result, almost all survey participants utilize managed service providers to facilitate mainframe modernization and operational efficiency, including MFaaS services.

Future of Mainframe Modernization Services

According to Michael Dornan, the increasing complexity of managing mainframe environments will stimulate demand for modernization services. Enterprises will seek support from service providers to maximize returns from their existing investments, focusing on cost optimization and seamless integration with diverse systems and services, including public cloud.

Frequently Asked Questions

What does the ISG study say about mainframe spending?

The ISG study indicates that companies using mainframes expect to increase their spending while also adopting public cloud solutions.

How many enterprises plan to upgrade their mainframes?

About one-third of large enterprises plan to upgrade their existing mainframe processors or storage as part of their IT strategy.

What challenges do enterprises face regarding mainframe talent?

Enterprises struggle with a shortage of mainframe skills as experienced staff retire and new employees often lack legacy programming knowledge.

What are the main priorities for enterprises regarding mainframes?

Main priorities include cost optimization, retiring legacy infrastructure, integrating AI capabilities, and enhancing information security.

What is MFaaS and why is it popular?

MFaaS, or Mainframe as a Service, is viewed as a lower-cost option allowing flexibility along with the advantages of cloud without the usual migration challenges.

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