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CIOs sharpen mainframe exit strategies

CIOs sharpen mainframe exit strategies

With skillsets aging, costs accruing, and ends-of-life looming, CIOs are getting serious about divesting their big iron estates, with some opting for the steep journey to the cloud.

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While the “death of the mainframe” may be a ways off if ever, companies are currently looking for exit strategies from big iron, with logistics multinational FedEx making headlines of late, announcing it will retire all its mainframes by 2024 in a bid to save $400 million annually.

As part of its goal to achieve carbon-neutral operations globally by 2040, FedEx is adopting a zero data centre / zero mainframe environment, running half its compute in colocation facilities and half in the cloud — a move that will also help the global logistics provider be more flexible, secure, and cost-effective, says Ken Spangler, executive vice president of global information technology at FedEx.

“Mainframes were not in our long-term plan,” he says. “Over a 10-year period, we have been evolving slowly away from the mainframe base; it’s basically the retire, replace, and re-engineer strategy.”

So far, 90 per cent of FedEx’s big-iron applications have been moved off the company’s mainframes, but 10 per cent are “sticky,” because of integration issues due to layers of interdependencies, Spangler says, adding that FedEx has “some unique operating companies” in its portfolio with their own technologies that have a lot of dependencies.

The undertaking is as massive as it sounds, as migrating compute-intensive systems on mainframes out of data centres and into the cloud is not for the faint of heart.

Still, companies such as IBM are taking steps to help companies’ mainframe applications have an afterlife in the cloud, and many enterprises are embarking on journeys to modernise their existing mainframe strategies for the digital era, including investing further in the latest big iron.

But for companies like FedEx looking to divest from their mainframe estates in favour of the cloud, a methodical approach is essential. Motivations for making the move vary, says Mike Chuba, managing vice president at Gartner. In some cases it’s a “greying of the skillset” and in others, aging equipment and cost, he says.

“The analogy I use is, if you’re a homeowner and haven’t done basic maintenance for 10 to 15 years and things are falling apart, you’ve got a very difficult decision: whether to make that substantial investment to catch up … or look to move someplace else,’’ Chuba says.

For smaller mainframe shops that have “fallen far behind, and the mainframe hasn’t been a strategic asset and competitive differentiator,” the choice may be less cut and dry, he says. “They may be running on hardware that is 10 years old with unsupported software, so attempting to modernise may be too large.”

But for entities that can potentially realise a future without having to maintain big iron in-house, here are vital insights from IT leaders who have begun the journey.

Beware the big data lag

For cable manufacturer Southwire, the impetus to move off mainframes was aging equipment. It became a question of “did we want to be in the data centre business or are there other people who do processing better,’’ says Dan Stuart, senior vice president of IT at Southwire, which makes wire and cable for transmitting and distributing electricity.

Another factor was “cost avoidance,” Stuart says, as the equipment refresh cycle and software contract renewals were approaching. Instead, the company opted to move its core SAP environment and Tier 1 systems, including the company’s manufacturing resource system, to Google Cloud Platform (GCP).

The migration occurred mid-pandemic in July 2020 and was undertaken by a combination of internal staff, Google services, and a third-party provider, Stuart says, adding that Southwire’s core SAP system still runs on an IBM DB2 database in GCP, whereas its other Tier 1 applications run on Google Cloud VMware.

The migration took about eight to nine months, and Stuart is happy with the results. “We haven’t experienced many problems at all” running SAP in the cloud, he says. “I would say fewer than on-premise.”

But not having a “well laid-out project plan” around data is something that Stuart says did result in issues. “If I were to do this again, I’d look at the size of our databases and clean them up before I cut over and take a lot of historical data and archive it,” he says. “The real ‘gotcha’ for us was we needed about two full days of downtime to do this and for a company that runs 24/7, that’s about all the time we have.”

Up next is moving a couple of other Tier 1 manufacturing systems that Stuart says are ready for the cloud now that IT has implemented SD-WAN.

“We knew we had to increase our bandwidth to reduce any type of challenges with performance,’’ he explains. “We just started rolling out SD-WAN with redundant data lines with network providers to reduce the amount of downtime and increase the amount of bandwidth coming through.”

Based on his experience, Stuart advises IT leaders to clean and purge data before moving mainframe applications to the cloud.

“You don’t want to carry [excess data] over because you don’t want to pay for that. So right-sizing that environment would be highly recommended. After that, you know exactly the data you want to bring over,” he says.

By moving to the cloud, Southwire has been able to streamline its disaster recovery process as well. And because the company is “very big on ESG and sustainability,” getting out from under having to run and maintain mainframes gives the company a reduction in its carbon footprint, Stuart says.

Be strategic — and get architecture right

By contrast, FedEx’s approach to weaning off on-premises mainframes is multi-variant. For example, as part of its “retire, replace, and re-engineer strategy,” FedEx’s freight company environment — one of those 10 per cent “sticky” mainframe applications — will be retired because “it wasn’t worth completely re-engineering and investing a lot of money,’’ Spangler says.

“We want to have efficient enterprise solutions, so in that case, we’re re-platforming off the mainframe because it will go away in two years and we will have [new] enterprise solutions,’’ he says. Spangler added that “we’re being very cautious about not just re-platforming things generically.”

Overall, FedEx’s mainframe divestment work is being done by a combination of internal and external teams. The “heavy part” of its mainframe retirement plan got under way in 2021. The goal is to be done by 2023.

Still, Spangler advises IT leaders to “take an economic view” of what to migrate given that there are still “tremendous technology capabilities” that exist on the mainframe.

“It can’t be a theoretically thing,’’ he says. “We just know for our environment, because we’re more than a 40-year-old company … we have old technologies we were replacing anyway, and when we looked at our enterprise strategy, it just made sense.”

Spangler says IT leaders should also keep the principles of engineering and architecture in mind. “A lot of people are so focused on getting rid of their mainframes they end up with mess,” he says, adding that strong engineering and architecting upfront will help make sure you end up with something that is modern, world-class, expandable, secure, and modifiable.

Lastly, Spangler recommends that IT leaders “continuously update your plan because it’s a battle. It’s hard. Brutally hard. We literally zero-base our business case on this every quarter and build from the bottom up.’’

Doing so requires FedEx to look at all the costs and saving elements and start with a clean sheet that considers whether the assumptions pan out against the reality. This ensures that if something has changed, officials are aware of it, he says.

“Every week, every quarter, and every year we know more,’’ he says. “Right now we’re very stable. We’re super confident with a high line of sight and we are executing very strongly.”

Do no harm to critical applications

When deciding whether it’s time to move away from hosting your own big iron, there are a number of variables to consider.

Besides the cost of modernising your mainframe operations and applications, and taking into consideration the internal skills necessary to keep a mainframe and its applications chugging, organisations need to think about the value of availability, security, resiliency, and transactional integrity — which are often hard to quantify, Gartner’s Chuba says.

“People have been trying to move off the mainframe for the last 10 to 15 years, and plenty of CIOs are lying alongside the road," he says. "They came in with a charter to move off the mainframe and have failed.

“Part of that is that vendors have overpromised, but the truth is it’s not easy. The low-hanging fruit has moved off [the mainframe] because there are places those apps can be moved more efficiently.”

But if a mission-critical application is migrated and then goes down, a company could find itself out of business, Chuba says.

Cloud providers, and especially the hyperscalers, have put a lot resources and investments into making it somewhat easier for companies to migrate applications off their mainframes in the past 10 years, he says — capabilities that will keep getting better.

That said, for most organisations, and large mainframe shops in particular, “the mantra is, ‘Do no harm to those business-critical applications,’’’ Chuba says.

“They need a solid business case and assurances the transition will be seamless and their apps will run with the same level of performance, resiliency, transactional integrity, and security in the cloud as what they’ve had in mainframes.”

As CIOs contemplate what to do about their mainframes, Chuba says it boils down to a few essential factors: “If you’ve got a skills issue, first and foremost, you have to do something — whether move to the cloud or an MSP,’’ Chuba says.

“If you don’t have the [mainframe] skills you don’t have many options. You can’t just shut the door and turn off the lights and hope and pray things will run.”

As for those weighing moving their mainframe applications to the cloud versus modernising them, “the discussion is the degree of risk you’re willing to take,” he says, pointing out that if a mainframe migration project stretches out over three to six to nine to 12 years, IT leaders are incurring lot of costs along the way.

“FedEx is kind of sitting at the poker table and saying, ‘We’re all in.’ If they can do that and pull it off in a timely manner, I have no doubt …. they’ll be able to claim victory,’’ Chuba says.

“But for customers who drag their feet or lose the momentum on these projects [after] starting with low-hanging fruit and then the project gets bogged down and they chase the next shiny object … costs could turn out to be pretty significant.”

FedEx’s Spangler agrees that regardless of the environment you’re retiring, IT — and the company — has to remain committed. “You have to lead it [and] you have to drive it hard, because these kinds of technologies are very integrated. And you have to stay focus. That’s the hard part,” he says.


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