The Futurum Group | Mainframe Modernization: 2023 a Year in Review

(Editor's note: The following article was originally published on The Futurum Group insights blog on January 4, 2024.)

Introduction

The technology sector experienced significant shifts in 2023, with AI dominating the headlines throughout the year. However, as new and emerging technologies grabbed the headlines all year, one venerable technology, the mainframe, had probably its busiest year in decades. The mainframe sector, often perceived as stable and slow moving, witnessed considerable activity over the past year. Looking forward to 2024, there are ample reasons for optimism as the platform reaches its 60th year in April.

Mainframe modernization, historically a niche market dominated by IBM and a select group of software and service providers, has long been synonymous with gradual, evolutionary progress. However, recent years have seen a paradigm shift. The concept of modernization has broadened, with organizations exploring diverse approaches to deliver robust, enterprise-scale IT services, ranging from interface and platform updates to data management and language innovations. Open source has also come to the forefront recently, with the Open Mainframe Project’s Zowe code base gaining widespread adoption.

This trend toward broader modernization strategies has gained momentum recently. In the past year, both new and established players have solidified their presence in this market, indicative of the space’s potential for significant returns. The movement among vendors signifies a pivotal and positive shift, fostering healthy debate within the industry.

IBM was quiet on the hardware side and will most likely not ship the z17 until 2025, but this did not stop the mainframe leader from having a busy year with the announcement of watsonx Code Assistant for IBM Z. IBM, under Arvind Krishna’s leadership, is disrupting itself and the market to deliver on AI and hybrid cloud promises, with innovations like watsonx Code Assistant for Z facilitating seamless transitions from COBOL to Java. Despite perceptions, COBOL remains prevalent, with the Open Mainframe Project promoting the language and providing resources to developers. IBM’s announcement of watsonx Code Assistant for Z, leveraging generative AI for COBOL-to-Java conversion, showcases promise in accelerating modernization, fostering agility, and overcoming developer skill constraints. It is a testament to the mainframe’s enduring relevance in modern, cloud-native, hybrid cloud architectures, challenging the notion that Java belongs exclusively to x86 architectures and public clouds.

The wider mainframe community was keen to return to in-person events, as evidenced by the record attendance at the GSE’s 2023 annual event. I had the opportunity to attend this event and keynote with the organizer Mark Wilson, who is growing his new firm Vertali at a stellar pace after leaving BMC a couple of years ago. We collaborated with Vertali on research on mainframe micro-segmentation, which you can read here. Similarly, under John Mertic’s stewardship, the Open Mainframe Project continues to drive innovative projects, supporting the mainframe ecosystem’s vitality. I have been the host of the I Am A Mainframer podcast for the past few years, and I continue to host the show as it gives me excellent access to the mainframe community and the opportunity to give back. You can check out the show here.

As we enter 2024, a milestone year for the mainframe (defined as the IBM S/360 and subsequent generations) celebrates 60 years on April 7th. The community has yet to announce the plans for the celebration but expect it to be forward-looking and focused on how the mainframe powers modern business and government rather than focusing on sepia-toned images of mainframes from years gone by.

The year 2023 saw notable acquisitions and strategic movements within the modernization domain. OpenText’s acquisition of Micro Focus, including its AMC Modernization business, and its subsequent agreement to sell the mainframe and COBOL parts of the business to Rocket Software, clearly indicates the industry’s dynamism. Rocket Software’s expanded capabilities will likely bring renewed focus to mainframe modernization. I had the chance to interview Rocket Software SVP Phil Buckellew shortly after the announcement to better understand the company’s strategic intentions and the interview is well worth checking out here. While the integration of the AMC business will take a few months to complete, I fully expect this acquisition to prove its worth in short order.

Other key players, such as AveriSource, Astadia, BMC, and Broadcom, have also made impactful moves in the mainframe modernization space. I spent time with the AveriSource team recently at Amazon Web Services (AWS) re:Invent, and I expect them to break cover in 2024 and be impactful as clients look to modernize their mainframe deployments. The executive team is filling out at AveriSource with the addition of Ed Airey as CMO standing out for me as the company looks to make an impact.

Another key move this year was Astadia’s acquisition by Amdocs. I spoke with Scott Silk, the CEO, late in the year, and he was bullish on the prospects for the company under its new ownership. I expect Astadia to continue to lead from the front with its modernization solutions, especially since the company now has deeper pockets to innovate.

The role of global system integrators (GSIs) and specialized service providers such as Kyndryl, DXC, and Ensono in this market cannot be overstated. Their investments in skills and services are critical in shaping the future of mainframe modernization. I regularly get briefed by Lisa Dyer and the Ensono team. The company is gaining traction in the market with more than 1m MIPS under management, with its pragmatic approach to mainframe modernization and deep bench of relevant skills.

Another key player making solid moves in the GSI space is DXC. I met with Murali Inuguru, who leads their mainframe practice globally, at AWS re:Invent. He shared under NDA a variety of client engagements that the company is undertaking to develop sizable (100K MIPS+) mainframe deployments. However, the standout GSI this year has been Kyndryl with the mainframe team led ably by Petra Goode and Richard Baird on the technical side. The Kyndryl team announced a significant partnership with AWS that I believe will stand them in good stead as they both move into 2024. You can read Dave Raffo’s and my full analysis here.

Beyond the GSIs, skill development and training remain crucial, with a high demand for mainframe-skilled professionals. Academic initiatives and specialized training programs, such as those offered by Prof. Cameron Seay and specialized providers such as Interskill, play a vital role in sustaining the talent pool in this evolving ecosystem. A key player of note here has to be Broadcom with its Vitality program. The company is partnering with companies to deliver skill resources directly to where they are needed most. I am due to be briefed more closely on the Vitality program by Broadcom early in the new year, and I expect to be impressed with the depth and breadth of the program. Broadcom continues to drive thought leadership in the mainframe space with its MainScoop series highlighting key innovations and customer stories. I highly recommend you check it out here.

As the mainframe approaches its 60th anniversary, it continues to be a crucial component of the global IT infrastructure, as evidenced by the BMC Annual Mainframe Survey 2023. The survey underscores a growing trend toward a hybrid approach to mainframe modernization, blending traditional mainframe technology with modern cloud solutions. BMC was another vendor to have a dynamic year. It acquired mainframe cloud storage leader Model9 earlier in the year and announced a raft of updates to its DevX platform in the final quarter.

Looking Ahead

The mainframe modernization landscape is poised for further growth and innovation if 2023 was anything to go by. In 2023, significant shifts were witnessed in the traditionally stable mainframe sector, with a broadening concept of modernization, open source adoption, and increased player involvement. As the mainframe approaches its 60th anniversary, it continues to blend traditional and cloud technologies in a hybrid approach. Notable acquisitions and strategic moves, such as OpenText’s acquisition of Micro Focus and then divestiture of its AMC assets to Rocket Software, BMC’s scooping up of Model9, and Astadia’s acquisition by Amdocs, indicate industry dynamism. With their investments in skills and services, GSIs such as Kyndryl, DXC, and Ensono remain crucial in shaping the future of mainframe modernization. Overall, 2024 holds promise as a forward-looking year for mainframes, emphasizing their role in powering modern businesses and governments.

—Steven Dickens, VP & Practice Lead (Hybrid Cloud, Infrastructure, & Operations), The Futurum Group

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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.