Mainframe modernisation driving $12bn+ cost savings for businesses

Kyndryl, an IT infrastructure services provider, has unveiled the results of its first global survey and analysis on the current and future state of enterprise mainframe modernization.

The survey of 500 business and IT leaders found that most companies are taking a hybrid approach to mainframe modernization, collectively achieving $12.5 billion in cost savings.

In today’s competitive and rapidly changing business environment, companies are looking for ways to begin or accelerate their mainframe modernization journey to drive greater efficiency, agility and innovation. According to Kyndryl’s survey, companies are looking to transform their mainframe environment:

  • 95% of respondents are moving at least some of their mainframe applications to the cloud or distributed platforms, an average of 37% of their workloads – only 1% of respondents plan to move all workloads entirely to the cloud.
  • 90% of respondents say the mainframe remains essential to their business operations due to its high levels of security, reliability and performance, while providing the flexibility to move to cloud platforms for efficiency.

Companies looking to upgrade their business-critical operations approach modernization in three ways: modernize on the mainframe, integrate with the hyperscalers, or move to the cloud. Almost all respondents use a combination of approaches, considering the capabilities of each platform and tailoring projects to their business and technical needs.

A key observation is that regardless of the mainframe modernization approach chosen, companies report reduced costs and increased profitability by 9 to 11%. The average annual cost savings per organization is $25 million, and collectively, respondents achieve savings of $12.5 billion per year, demonstrating that mainframe modernization delivers a positive return on investment. In addition to financial benefits, respondents say transformation drives innovation by allowing them to benefit from greater scalability and faster time to market.

Kyndryl’s survey shows that respondents share a common need for security, regardless of which transformation path they choose. Security is the most important factor (49%) cited when defining a customer’s transformation strategy. At the same time, it is one of the most critical elements to the success of a mainframe modernization project and the most popular topic for training and upskilling. Concern over the decline in mainframe skills was also cited as a major challenge for more than half of companies surveyed, and this skills gap provides employment opportunities for emerging technical talent. In fact, 74% of respondents say their skills challenges require them to rely on external companies to help them transform.

Petra Goude, Global Practice Leader for Core Enterprise & zCloud at Kyndryl, said: “Our survey shows that mainframes are increasingly becoming an integral part of hybrid cloud environments and continue to drive business value.” The lack of skilled workforce to support and secure them However, mission-critical environments are a significant cause for concern for many organizations.

“Finding a trusted advisor and integrator with deep expertise and experience is the key to success – regardless of where companies are in their journey and how they want to carry out their transformation. The survey shows that maintaining the status quo is not a path to modernization or growth.”

Kyndryl commissioned Coleman Parkes Research to survey 500 decision makers, including CTO/CIOs, IT directors, and executives from organizations across industries and agencies, of varying sizes, with varying levels of mainframe dependency, and at different points in their modernization journey.

To learn more about the insights gathered about how respondents view mainframe transformation and application modernization, as well as the challenges, risks and benefits associated with their initiatives, go to: Kyndryl’s 2023 State of Mainframe Modernization Survey Report.

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