Preface:
Thank you for joining us for this 10-part series to discuss the Top 10 Ways You can Save on your Mainframe Costs in 2023.
- Nearly all Clients are Clamoring for Savings in 2023. This is largely due to (a) rising input costs, (b) softening business forecasts, and (c) continued economic uncertainty and headwinds. This has caused many clients to re-evaluate spending plans and implement new cost-cutting targets.
- IT is the Number One Cost Savings Category of The Modern Enterprise. IT is typically the highest indirect spend area for modern enterprises and is also the cost category with the highest potential savings yield (we average about 33% savings on addressable IT spend). In addition, since 2020, clients have largely exhausted conventional cost savings countermeasures such as canceled projects, delayed spending plans, and cuts in discretionary spending, and many have even gone through Reductions in Forces (RIFs), and/or even facility closures. As a result, clients are at risk of cutting muscle and bone this year as cost reduction demands persist, but desperate measures are not necessary when we can help you harvest considerable value from your mainframe supply chain, do so with minimal risk, and perhaps even get additional value including modernization and digital transformation among other benefits.
- NET(net) is the Number One IT Cost and Value Optimization Provider. In the last 20 years, we have shaped over $2 Trillion of investment, captured well over $400 Billion of incremental value for our clients and partners, and have an 85% probability of achieving savings ranging between 13-53%. Our performance numbers are simply unmatched.
Introduction:
When it comes to Mainframes, NET(net) sees incredible savings opportunities in 2023 and into 2024. Not since 2008 has there been as much downward pricing pressure on technology incumbents, and we believe meaningful savings targets can be achieved, but due to the market conditions, technology incumbent suppliers are seeking to increase prices and will be highly disruptive to any cost savings agenda, so it will require a commitment to do the hard work to realize meaningful reductions.
With that as a backdrop, we give you our Top 10 Ways You can Save on your Mainframe Costs in 2023.
In case you missed our previous installments, look back at our previous posts:
- Part 0 (Feb 1): Price Benchmark Your Mainframe Costs
- Part 1 (Mar 1): Optimize Mainframe Licensing
- Part 2 (Apr 1): Minimizing MIPS (Millions of Instructions Per Second)
- Part 3 (May 1): Optimizing MLCs (Monthly License Charges)
- Part 4 (Jun 1): Upgrading Your Operating Environment
- Part 5 (Jul 1): Optimizing Mainframe Maintenance & Support Services
- Part 6 (Aug 1): Outsourcing Mainframe Support
- Part 7 (Sep 1): Modernizing Mainframe Applications
- Part 8 (Oct 1): Replacing Custom Developed Applications with Packaged Applications
- Part 9: (Nov 1): Competitively Displacing Mainframe Applications
Part #10 of 10: Managing Mainframe Workloads
Unleashing Cost Savings with Mainframe Workload Optimization
For decades, IBM mainframes have been the backbone of mission-critical operations for countless enterprises. Their unwavering reliability, robust security, and unparalleled processing power have made them indispensable for handling massive workloads and safeguarding sensitive data. However, the associated costs of maintaining and operating mainframe environments can be substantial, prompting most forward-thinking client organizations to seek innovative strategies for streamlining expenses.
Virtualization: The Gateway to Efficient Resource Utilization
Embracing virtualization has emerged as a game-changer for mainframe cost optimization. By virtualizing mainframe workloads, client organizations can effectively consolidate multiple workloads onto a single physical machine, leading to a significant reduction in hardware requirements and associated costs. This consolidation also streamlines software licensing, as fewer licenses are needed to support the virtualized environment.
Virtualization further enhances scalability, enabling client organizations to seamlessly adapt their mainframe infrastructure to evolving business demands. As workloads fluctuate, additional virtual machines can be provisioned or decommissioned effortlessly, eliminating the need for costly hardware upgrades.
Disaster recovery and business continuity are also bolstered by virtualization. By replicating virtual machines across different locations, organizations can ensure rapid data recovery and minimized downtime in the event of a disaster. Additionally, virtualization simplifies maintenance and management tasks, reducing the effort and associated costs of maintaining the mainframe environment.
Cloud Migration: Embracing a Flexible and Cost-Effective Future
Migrating mainframe workloads to the cloud opens up a plethora of cost-saving opportunities. With cloud providers offering pay-as-you-go pricing models, client organizations can eliminate upfront hardware, software, and maintenance costs, paying only for the resources they consume.
Cloud environments also provide unparalleled scalability, allowing client organizations to seamlessly scale up or down their mainframe infrastructure as business needs dictate. This elasticity eliminates the need for expensive hardware upgrades and ensures that resources are always aligned with current demand.
Furthermore, cloud providers offer advanced security features, such as encryption, data backup, and recovery, which can significantly enhance data protection and reduce the costs associated with building and maintaining in-house security infrastructure.
Optimizing Infrastructure for Maximum Efficiency
While virtualization and cloud migration offer substantial cost savings potential, organizations must also consider optimizing their mainframe infrastructure for maximum efficiency. This includes:
- Right-sizing hardware: Regularly assessing hardware utilization and adjusting configurations to ensure resources are optimally allocated.
- Resource capping: Setting limits on CPU, memory, and other resources to prevent overutilization and optimize performance.
- Software optimization: Regularly reviewing and updating software licenses to ensure they are aligned with actual usage.
- Application modernization: Modernizing legacy applications to reduce resource consumption and improve performance.
- Workforce training: Ensuring staff is adequately trained on virtualization, cloud migration, and mainframe optimization techniques.
Conclusion
By implementing these strategies, enterprises with heavy dependencies on IBM mainframes can dramatically reduce costs, enhance efficiency, and position their mainframe environments for long-term success. The key lies in embracing virtualization, exploring cloud migration, and continuously optimizing infrastructure and operations. With a proactive approach to mainframe cost optimization, organizations can unlock significant savings while maintaining the unwavering reliability and security for which mainframes have always been known.
Examples of successful mainframe workload optimization projects. There are many examples of successful mainframe workload optimization projects. Here are just three:
Example 1: Prudential Financial
Prudential Financial, a leading insurance and financial services company, was able to save $10 million per year by virtualizing its mainframe workloads. The company consolidated multiple workloads onto a single virtual machine, which reduced hardware costs and software licensing fees. Prudential also experienced improved scalability and agility as a result of virtualization.
Example 2: Citigroup
Citigroup, a global bank, was able to save $20 million per year by migrating its mainframe workloads to the cloud. The company took advantage of Amazon Web Services' (AWS) pay-as-you-go pricing model and its elastic infrastructure to reduce costs. Citigroup also experienced improved performance and scalability as a result of cloud migration.
Example 3: Bank of America
Bank of America, another global bank, was able to save $30 million per year by optimizing its mainframe infrastructure. The company implemented a number of strategies, including right-sizing hardware, resource capping, and software optimization. Bank of America also modernized its legacy applications to reduce resource consumption and improve performance.
These are just a few examples of the many enterprises that have been able to achieve significant savings by better managing mainframe workloads. By adopting virtualization, cloud migration, and infrastructure optimization strategies, organizations can unlock substantial cost savings while maintaining the unwavering reliability and security that mainframes have always been known for.
How Much Can You Save?
By working closely with NET(net) to implement these and other savings strategies as part of our Top 10 Ways to Save on Mainframes, client organizations can reduce their mainframe costs significantly and better align their spending with their actual usage, resulting in a more cost-effective mainframe environment.
- Clients fully committed to mainframe modernization efforts can save 80-90%.
- Clients who are committed to a Mainframe Cost Optimization (MCO) initiative (including workload migrations), but who have limited ability to move applications off the mainframe can still see savings between 32%-60% with full scoped work efforts.
- Clients who are unwilling or unable to consider disruptive strategies, but those that still want to work with NET(net) strategically to optimize mainframe consumption and maintenance costs can see savings that range anywhere from 13%-33%.
- Clients who believe they can do this all on their own and those who believe they have all the skills, toolsets, and market & supply side knowledge to get the best outcomes likely have a savings opportunity of 5-15%, but most get only minor or no savings and unfortunately erode the opportunity to get future savings by unknowingly making subtle yet critical mistakes which is why we always strongly recommend working with us as your trusted advisor.
We hope you enjoyed our 10-part series of the Top 10 Ways You can Save on your Mainframe Costs in 2023. Clients who continue to pay unnecessary bloated costs to IBM are doing their organizations no great service when viable market alternatives are widely accepted and offer significant savings opportunities, often times for superior solutions with greater benefits.
Summary
In all respects, extracting value from the mainframe supply chain in 2023 is not going to be easy as the big iron cartel will not only be wildly disruptive to any cost savings effort, but they will also be implementing their own cost increase agendas. If you're ready to take on the challenge and are dedicated to the hard work needed to achieve success, Contact Us today to learn more about how working with NET(net) can help you save on your mainframe as well as all your other technology investments or Sign up now for a Savings Cloud subscription, and we will get started on helping you save money right away.
About NET(net)
Founded in 2002, NET(net) is the world’s leading IT Investment Optimization firm, helping clients find, get, and keep more economic and strategic value in their technology supply chains. Over the last 20 years, NET(net) has influenced trillions of investment, captured hundreds of billions of value, and has helped clients cost and value optimize all major areas of IT Spend, including XaaS, Cloud, Hardware, Software, Services, Healthcare, Outsourcing, Infrastructure, and Telecommunications, among others. NET(net) has the experience you want, demonstrates the expertise that you need, and delivers the performance you demand and deserve. Contact us at info@netnetweb.com, visit us online at www.netnetweb.com, or call us at +1 (616) 546-3100 to see if we can help you capture more value in your IT investments, agreements, deployments, and relationships.
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