90% of Enterprises Have Modernized Mainframe Workloads in Response to Pandemic, Annual Advanced Report Finds

Digitalization serves as new North Star for modernization efforts that are proven to reduce costs, expand shrinking talent pools, and help reach sustainability goals

Over two years since the pandemic demonstrated just how fragile legacy systems can be, findings from Advanced’s third annual Mainframe Modernization Business Barometer Report show that, for the first time ever, digitalization is the driving force across the enterprise. Organizations aren’t just embracing cloud hyperscalers as infrastructure providers – they’re inviting them into the critical operations of their businesses with open arms.

“At $65 million also spent annually on them, 22% of which is allocated to maintenance alone, the majority of enterprise leaders are now vigorously embracing change as a certainty and increasingly viewing their outdated, expensive mainframes as agents of risk that stand in the way of agility and success.”

In fact, according to the survey of hundreds of enterprise IT leaders spanning the globe, 41% have modernized mainframe workloads within the past year, 90% have done so within the past three years, and 85% are in the process of planning a modernization project or recently completed one. This is a huge departure from the 11% that undertook modernization initiatives pre-pandemic.

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For those modernizing, 41% ranked security – including the downstream impact to regulatory compliance, data, and infrastructure management – as the top element taken into account when prioritizing their mainframe modernization strategies (a factor not even on their radar in 2020 and 2021 analyses). The shift to the cloud (29%), high/rising software licensing costs (​​28%), integration issues (26%), organizational technology consolidation (25%), hardware dependency (23%), and lack of scalability (19%) followed as top modernization drivers.

“Considering that nearly half of our respondents named transformation and innovation enablement as their top strategic initiative of 2022, and three-quarters are still concerned with having access to the right IT talent to maintain and manage their mainframes, it’s clear that being tethered to these legacy systems is seen as a true barrier to digitalization for the enterprise today,” said Tim Jones, Managing Director, Application Modernization for Advanced. “At $65 million also spent annually on them, 22% of which is allocated to maintenance alone, the majority of enterprise leaders are now vigorously embracing change as a certainty and increasingly viewing their outdated, expensive mainframes as agents of risk that stand in the way of agility and success.”

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Additional findings from the report include:

• A look at today’s mainframe: On average, mainframe-based applications consist of 3.6 million lines of code. Although many use multiple legacy languages, COBOL is reported as the most widely utilized (42%), followed by High Level Assembler (37%), ADSO (32%), and Software AG’s Natural (29%).
• The destinations for modernization projects: 68% of those migrating their mainframe workloads are targeting public cloud environments such as AWS, Google Cloud, Oracle Cloud, or Microsoft Azure, while 54% say they’re considering private cloud environments. Security, cost, and track record of success were listed as the deciding factors for preferred cloud providers.
• Modernization approaches taken: 33% chose refactoring, 24% chose rehost/replatform, 22% are replacing mainframe functionality with commercial off-the-shelf software (COTS), and 13% prefer a rewrite/re-engineer approach.
• The benefits organizations have reaped: A sample of benefits include cost reduction, talent pool expansion, and technology consolidation; 89% also reported that mainframe modernization resulted in a positive impact on sustainability goals for their organizations (vs. a 17%+ increase in 2021).

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