By Hari Candadai
Thanks to their unparalleled stability and reliability, mainframes still power the world’s leading businesses, including banks, airlines, retailers, and healthcare, who need to manage billions of secure transactions every day. In fact, the mainframe is still the platform of choice for most of the world’s Fortune 500 companies.
Despite all the promises you hear about cloud computing, mainframes are hard to beat in terms of speed, security, uptime, and processing power. They can also last for more than 10 years, run multiple operating systems at once, and offer compatibility for both new and legacy applications.
These crucial core systems are inherently reliable, stable, and secure. But if something does go wrong, they require immediate attention. Even a few minutes of downtime can lead to devastating financial compliance risks for companies and their customers.
Businesses recognize the importance of keeping these systems in good shape and maximizing the value of their existing investment. However, most IT departments do not have the required expertise in-house. So, they turn to external support.
Mainframe Maintenance Costs Burying IT Budgets
As you know, mainframe ownership is a serious financial commitment. In addition to the initial investment, a large percentage of the total cost of these supercomputers goes toward maintenance. A portion of that cost is related to hardware, but the majority is dedicated to ongoing support and maintenance of the software that is running on the mainframes.
Companies are investing 90 percent of their IT budgets on just keeping the lights on, according to Gartner’s 2021 “IT Metrics Data: Executive Summary.” Software maintenance costs are now increasing faster than interest rates. Ten years ago, they comprised about 70 percent to 80 percent of a typical IT budget. That figure is now at 90 percent and rising.
Software maintenance fees alone used to run about 15 percent to 18 percent of the software license fee, but Bamboo Agile reports that in some cases, that percentage has increased to 20 percent and even 25 percent. On a $500,000 license deal, that five percent hike adds up to an additional $125,000 over five years.
And adding insult to injury, IBM raised its prices as much as 15 percent at the beginning of this year, in what it calls “modest price changes” that will improve “worldwide price harmonization.”
Pricing strategies that mega-vendors use to keep themselves profitable are not only directly impacting your budget, but your overall company growth as well.