During times of economic turmoil many businesses face slower growth and cost pressures that impact their ability to maintain financial performance, their willingness to invest, or assume new risk. The financial pressures can be considerable and often result in negative budget impact for lines of business. Often, the budget impact creates stagnation, impairs the ability to innovate and slows or stops business transformation.
Business and central IT are no exceptions; in times of financial stress, the budgets for these groups, which are generally cost centers, are often reduced to the point that only essential operational needs can be supported. Approval for new investments is minimized or eliminated and greenfield programs and digital transformation are reduced or stopped. These impacts vary by industry, but those industries affected by external market volatility are most at risk.
It may seem counterintuitive, but mainframe transformation during economic downturns may be precisely the best time to start. While a previous decision to proceed with mainframe transformation may have been based solely on agility, application innovation and data insight, the shifting economic climate likely requires a decision to proceed based on direct cost savings. The Microsoft Mainframe Transformation program is well equipped, and deeply experienced, in creating mainframe transformation programs that lead with cost savings as a primary goal. The program, in combination with partners and ISVs, offers mature and proven mainframe rehosting and rapid application refactoring to Microsoft Cloud. Rehosting and rapid refactoring are just two simple examples. Additional, more focused approaches quantify costs, such as licensing, hardware, backup and DR, development, tooling, databases, other ISV software to determine the best course of action to realize the fastest savings.
An accelerated migration to cloud can yield ~45% - 50% in early cost savings.
However, this represents only a portion of potential savings. Once the mainframe workloads migrate to cloud, deeper and more transformational change can begin. This deeper transformation, which may be funded using the cost savings realized by the accelerated migration to Microsoft Cloud, can bring agility, application innovation and data insight originally sought out, and still required, by the business. Long-term, sustained, cost savings of ~85% can be realized in a highly transformed mainframe to cloud landscape. Refer to Figure 1., below, for a simplified view of accelerated cost savings over time.
Finally, businesses choosing to transform their mainframe during difficult economic times, while the competition pauses their own transformation, can improve their competitive position and be more prepared for future growth when economic conditions improve. Put another way, “despite the undeniable adversity, dream big to separate yourself from the crowd, and plan for the next expansionary phase” (Harvard Business Review: How Companies Should Invest in a Downturn).
Microsoft has been transforming mainframes for over ten years, and is fiercely committed to helping address cost, labor, agility and other mainframe challenges by bringing together Microsoft assets and experience, partners, and our energy and commitment. If you would like to learn more about advancing your digital strategy through mainframe transformation during these challenging economic times, or anytime, please contact us at: mainframetransformed@microsoft.com