Mainframe modernization on AWS can help maximize value from $2.4B federal spend on legacy systems

According to the Government Accountability Office (GAO), the federal government’s 10 legacy systems most in need of modernization cost about $337 million a year to operate and maintain (accounting to a $2.4 billion spend on legacy systems by 2030). As organizations look to evolve their IT systems and integrate cloud solutions, determining the appropriate mainframe strategy can be challenging. On one end, the decades-old mainframes offer a highly secure environment, capable of running millions of transactions. Further, IBM, the largest provider of mainframes, has been investing millions in developing the latest hardware to keep these environments up-to-date and secure. On the other end, the “mainframe talent drain” and the push to decrease time-to-market has CIOs in a race to achieve the business agility and scalability offered by cloud.

Following are four ways that leveraging Amazon Web Services (AWS) can help customers maximize value as they evaluate their mainframe modernization strategy:

1. Impact on business agility and scalability. According to the 2022 Mainframe Modernization Business Barometer Report, participants cited scale to meet new demands (34 percent), a lack of business agility (32 percent), and difficulty integrating with modern tech (32 percent) as key drivers of their decision to modernize their mainframe environment. AWS innovates continuously and releases new solutions and several up-the-stack offerings that aren’t typically available in on-premises data centers, including analytics capabilities, artificial intelligence (AI), machine learning (ML), text messaging services, and on-demand call centers. The good news is even for environments that are deemed as not suitable for a modernization/migration, thanks to the partnership between AWS and IBM, organizations can bridge the gap by leveraging a hybrid strategy (such as mainframe augmentation) – integrating the on-premises mainframe with cloud development and beginning to enjoy the scalability and agility benefits offered by cloud.
2. Legacy skill shortage. It is getting costlier and more time-consuming to find talent who are experienced in programming using mainframe languages such as COBOL. Experienced mainframe engineers are starting to retire from the workforce. As a result, a sizable knowledge gap can form, as the new workforce lacks the experience and may prioritize developing other skillsets. By modernizing these workloads and migrating them to AWS, organizations can address the talent risk associated with operating the mainframe. Additionally, under the AWS Shared Responsibility Model, certain maintenance functions are performed by AWS, allowing an organization’s staff to focus on mission-centric workstreams. These benefits increase as an organization adopts automated solutions and managed services.
3. Security and operational risks. Recent congressional testimony by the GAO notes that 10 out of the 15 federal agencies it investigated have 249 systems vulnerabilities, of which 168 pose significant risk to the security of their operations. Although the mainframe’s stellar reputation for security remains untarnished, there are a number of growing ancillary risks associated with these systems that are influencing platform decision-making. For instance, the 2022 Mainframe Modernization Business Barometer Report, found that 41 percent of participants believed retaining “legacy” systems increases the risk associated with system failure and downtime. One federal government agency respondent said, “most vendors do not fully support legacy systems since they continue to use outdated software that has not been upgraded to meet the most recent security regulations. No matter how much money we budget for IT, maintaining these systems requires ongoing maintenance, necessitating ongoing security expenditure, when we could make one sizable investment and catch up with the systems of this time.” AWS is architected to be the most secure cloud computing environment available today. Its core infrastructure is built to satisfy the security requirements for the military, global banks, and other high-sensitivity organizations. AWS supports 143 security standards and compliance certifications, including PCI-DSS, HIPAA/HITECH, FedRAMP, GDPR, FIPS 140-2, and NIST 800-171, helping satisfy compliance requirements for virtually every regulatory agency around the globe.
4. But can mainframe modernizations result in cost-savings as well? The answer may not be an easy one. Analysis completed by the AWS Public Sector Cloud Economics (PS CE) team confirms that organizations may be able to reduce their IT operational costs by 60 to 90 percent post-migration. This exceeds an average cloud infrastructure savings of 47 percent. One example is the U.S. Air Force (USAF), for whom a multi-company team delivered a successful modernization of an expensive COBOL legacy system to an affordable, maintainable Java-based system. USAF’s projected cost savings is $25 million annually, and given the increased scarcity of COBOL programmers, the modernization effort also helps USAF access a larger pool of IT talent. In addition to operational cost savings, cost savings from high/rising software cost is a key driver for 28 percent of participants in the 2022 Mainframe Modernization Business Barometer Report.Yet, post migration savings do not provide the full picture. Mainframe migration cost can significantly impact ROI and feasibility of a mainframe modernization project. For instance, full code re-write projects offer the largest savings and value potential post-migration, however, high migration cost (tens of millions of dollars in some cases) and a lengthy migration timeline (four-plus years) can lower ROI and migration feasibility. An alternative middle ground is to leverage automated refactoring of code to modern language powered by AWS Blu Age via the AWS Mainframe Modernization service or similar tooling from one of the AWS Mainframe Modernization Competency Partners that can help cut migration timelines by more than 50 percent compared to costly manual rewrite projects. Further, prior to any financial assessment, a technical feasibility assessment should identify environments that are suitable for a migration or augmentation (hybrid strategy).

AWS offers the following resources to assess both technical and financial feasibility of modernization:

1. AWS Cloud Economics: The first step in beginning a mainframe migration journey is to develop a business case to gain executive buy-in and demonstrate the benefits. AWS can support customers in building a business case through the Cloud Economics (CE) team. The AWS CE team, along with the AWS Mainframe Modernization Specialists team, works as a complementary resource to help your team develop a business case for a migration leveraging the AWS Cloud Value Framework and its pillars (displayed in Figure 1) of cost savings, staff productivity, operational resilience, and business agility.

Figure 1. Four of the five pillars of the AWS Cloud Value Framework are displayed: Cost Savings (TCO), Staff Productivity, Operational Resilience, and Business Agility. The Sustainability pillar is intentionally not displayed, as the impact on sustainability from a mainframe modernization does not yet have statistically significant evidence.

2. Managed service: AWS Mainframe Modernization’s assessment capabilities help analyze, assess, scope, and plan a migration and modernization project. AWS Mainframe Modernization eliminates the need to define and maintain the underlying infrastructure required to run the migrated workload, allowing customers to focus on the development and enhancement of each application. Figure 2 provides a comparison of mainframe technology stack responsibilities based on hosting solution.

Figure 2. A comparison of mainframe technology stack responsibilities based on hosting solution. In an on-premises mainframe, an organization is responsible for everything, from the data center facility to the application and data. In an infrastructure service-based AWS deployment, the customer organization is responsible for the operating system to the application and data. Using the managed service, AWS Mainframe Modernization, the customer organization is responsible for the application and data. Services utilized include Amazon Elastic Compute Cloud (Amazon EC2) and Amazon Relational Database Service (Amazon RDS).

3. Hybrid deployment: Through our partnerships with IBM and other AWS Mainframe Modernization Competency Partners, we are able to help organizations successfully execute a hybrid cloud strategy, integrating a customer’s on-premises mainframe with their AWS environment and allowing for agile development, real-time data sharing, mainframe augmentation, hybrid storage, and enterprise automation.

4. AWS Professional Services (ProServe) and the Amazon Partner Network (APN): AWS has a dedicated team of experts to help organizations plan and execute migrations, as well as an extensive network of consulting and solutions partners. Either or both of these resources are available to customers engaging in a migration to help with planning, training, and execution.

5. AWS Migration Acceleration Program (MAP): The AWS MAP is built to help organizations complete a migration. It provides resources including credits and incentives to subsidize the cost of the migration bubble, with specialized incentives for mainframe migrations.

How can you get started?

Contact your AWS account representative to request a complimentary Cloud Economics assessment. For migration support, please contact our MAP migration specialists. To learn more about the analysis shared in this post, email the PS CE team.