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LzLabs Software Defined Mainframe

Mainframe

Why is the mainframe holding organizations back from modernization? The results of the LzLabs and Microsoft Mainframe Modernization Survey are in…

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15 October 2018

Mark Cresswell, CEO, LzLabs

In conjunction with Microsoft we recently commissioned Vanson Bourne, a well-respected survey organization, to talk to 500 senior IT executives across almost that many companies using mainframe technology. In respect of statistical significance, this survey base is well in excess of 10% of the worldwide user base of high-end mainframe computers.

The survey reveals significant concerns around mainframe skills, barriers to modernization of core applications and the associated business risk this lack of agility creates.

Barriers to innovation

When a company’s core applications run Intel architectures, using the Linux operating system, the door is open to a world of Open-Source innovation. The effort across a range of open source projects, aimed at altering the fundamental trajectory of modern application development, is quite remarkable. This energy and innovation is almost entirely absent on mainframes.

So, it’s easy to understand why 96% of global IT leaders say Open-Source is strategic to future development and 71% say the mainframe is holding them back from innovation.

A looming skills crisis

Over 80% were concerned about lack of skills within their mainframe organization, and a staggering 56% said they had no succession plan for mainframe skills. The looming lack of mainframe-skilled IT professionals represents a major risk to many traditional business. These mainframe systems are often mission critical – almost all financial transactions touch a mainframe at some point in their journey. Without the skills in place to support them, these fundamental areas of the business could be in serious jeopardy in the near future.

A significant risk to business

77% of respondents believe they should have already started their mainframe modernization process to avoid being at risk.

This risk has two dimensions. Firstly, running core applications on a platform with a dwindling supply of skilled support personnel; when things go wrong, who are you going to call?

Secondly, borne on the web companies, with none of this mainframe baggage, can simply out-innovate their competitors. And a in a rapidly digitalizing world, this matters.

The tipping point

It is clear the individuals in the survey are aware of the broader implications of keeping legacy applications on a mainframe.

Yet for many, procrastination has set in. They are stuck between a rock and a hard place; they know they have to move, but the skills and technology required to make the move has been sadly lacking.

But the day of reckoning is coming. As pretty soon the skills shortage is going to bite hard, and the inability to innovate on these core applications will cost these companies real revenue.

 

 

Over two thirds of IT decision makers feel unable to innovate due to the inflexibility of their legacy mainframe

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Current mainframe skill set will not be sufficient to meet business needs, says 59 percent of respondents 

Zurich, 11 October 2018 – LzLabs and Microsoft today announced the results of a global survey, conducted by Vanson Bourne, which revealed that 94 percent of IT decision makers would consider moving off the mainframe due to the high cost and inflexibility that it brings to their business. Three quarters also agreed that they should have already started a mainframe migration process to future proof their business to stay competitive in their industry and address their growing mainframe skills gap.

A key factor in the respondents’ decision to move away from legacy mainframes was the need to innovate. The survey revealed a strong appetite for the adoption of modern innovative technologies across all sectors, with cloud deployment (85%) and open source (96%) being cited as playing a key role in future IT initiatives. However, over two thirds of respondents said that the inflexibility (71%) and cost (69%) of their mainframe is limiting the ability of their IT department to achieve this innovation.

“What we are seeing here is a tipping point for the future of the mainframe environment within organisations” said Thilo Rockmann, Chairman and COO of LzLabs. “Decades of procrastination have led to a situation where businesses are now shackled by the extreme cost and inflexibility of their legacy systems, rendering them unable to keep pace with more agile competitors in their industries.

“What these results show is a realisation within organisations that their dependence on the mainframe has gone on long enough, the time for procrastination is over, and the countdown clock to their mainframe exit is ticking.”

Mainframe skills – who are you going to call?

The survey also showed that the specialist skills required to maintain business-critical mainframe applications were a dwindling resource in organisations, with the vast majority of respondents (81%) expressing concern over the lack of mainframe skills within their IT team.

In their efforts to mitigate the skills gap, respondents had resorted to outsourcing almost a third (32%) of their mainframe workforce on average, a practice which has only added to the overall cost of the mainframe to the business.

Results also revealed that the consequences of the skills gap are rapidly approaching, with 59 percent of respondents stating that the current levels of skills in their mainframe management team will not be sufficient to meet their business requirements in the next five years.

Additional statistics highlighted:

  • 56 percent of respondents believe that their organisation has not properly implemented a succession plan for younger employees to absorb the knowledge required to maintain legacy mainframe architectures.
  • On average, respondents reported that they expected their organisation’s IT modernisation process to take at least three years.

“The price organisations are paying to prop up their legacy mainframes would be unjustifiable in any other corner of the business, and with a rapidly dwindling level of skills needed to keep the mainframe afloat, organisations are simply papering over the cracks with expensive outsourcing” said Mark Cresswell, CEO of LzLabs.

“With major c-level executives losing their jobs due to poor IT migrations, the legacy modernisation process must be done right, and it must be done now, to avoid the imminent and costly consequences of doing nothing”, he added.

“This should be a wakeup call for organisations that if they do not begin the process of migrating off the mainframe, they will continue to prohibit vital business innovation whilst paying a hefty financial sum for the privilege. The next two years are a crucial timeframe in for businesses to prevent the inevitability of being too far behind the competition to survive”.

Chris Dial, Director One Commercial Partner Group ISV, Western Europe, said: “Modern technologies such as the cloud are the driver of digital transformation. The Cloud enables companies and organizations not only to work more efficiently, but also to create new value-added products and services that can improve the customer experience while opening up new revenue streams.  We are excited to work with ISVs like LzLabs who are leading the way in modernizing apps and data to deliver more capabilities and insights to our joint customers.”  

Independent market research firm Vanson Bourne surveyed 500 IT decision makers in organisations across the UK, USA, Canada, France and DACH regions across industry verticals such as financial services, telecoms, IT, government and public sector.

Edmond de Rothschild banks on LzLabs for modern mainframe alternative

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Moving core banking system and data to Linux-based x86 fosters greater innovation, integration and value

Zurich, 15 February 2018 – LzLabs today announced Edmond de Rothschild (Suisse) S.A., the  investment house, as its latest customer. Using LzLabs technology, Edmond de Rothschild (Suisse) S.A. has completed a project to move its legacy core mainframe system to a Linux-based alternative, running on x86 servers.

The project has seen the introduction of a wide range of innovative features, whilst significantly reducing IT costs.

Among these new features is the organization’s web terminal, designed and delivered by LzLabs, which automatically processes wealth management data to generate graphics for ease of interpretation. Through the terminal, LzLabs has also streamlined processes by hyperlinking its core banking system with associated applications and the company’s document management service, enabling users to click through to documents from referenced parts of the system. This approach has improved quality of service to bank  clients, whilst enabling greater internal efficiency and employee productivity.

To support the ongoing modernization of Edmond de Rothschild’s core systems, LzLabs has also moved the company’s database environment from a mainframe database to an open-platform database.

Vincent Guiot, IT Development Manager, Edmond de Rothschild (Suisse) S.A., said: “this is a significant step in the ongoing modernisation of our infrastructure, and represents a leap forward in terms of IT innovation for our business. LzLabs’ approach has enabled us to leverage applications and data in ways we couldn’t before, whilst integrating new third-party applications more quickly and efficiently. The significant reduction in software licensing fees was also an attractive prospect, and enabled us to invest a significant amount in more innovative approaches.”

Mark Cresswell, CEO, LzLabs, said: “we’re delighted to name Edmond de Rothschild as a customer. Our team has developed new, innovative practices that are now more readily available and, ultimately, streamline Edmond de Rothschild’s business practices and make employees more productive – that is what we strive to achieve for our customers.  It’s tremendous to have liberated Edmond de Rothschild from the mainframe and to have enabled innovation company wide.”