Tweak Your MIPS: Getting Smart About Mainframe Cost Reduction

Mainframes have proven to be secure, fast, and reliable processing platforms.  They also tend to be complex, at least partially homegrown, business-critical systems.  New use cases are driving MIPS and costs upwards, presenting challenges for CFOs.  However, the perceived risk of updating these systems is often higher than the perceived risk of doing nothing, so despite their cost and complexity, many companies are still married to the mainframe.  But a storm is brewing.  A very costly storm that will present problems and risk that doing nothing will make a lot worse.

Customer Facing Applications Drive Skyrocketing Mainframe Costs

Mips, mainframe cost reduction, mainframe modernizationA recent Compuware-commissioned study of 350 CIOs from enterprise organizations examined the impact of new technologies and trends on the mainframe application environment.  Distributed applications aren't only forcing the mainframe to work harder due to the surge in demand, there's further pressure for it to deliver these services at even faster speeds. The smartphone generation of consumers expect services to launch in seconds; if they don't, dissatisfaction is often expressed very swiftly, scathingly and publicly. As a result, CIOs are feeling the pressure to deliver while CFOs harbor anxiety over increasing costs.  Here are some numbers from this study:

  • More than half (55 percent) of enterprise applications call upon the mainframe to complete transactions.
  • Eighty-nine percent of CIOs stated mainframe workloads are increasing and getting more varied.
  • Ninety-one percent of CIOs say high customer expectations are increasing the pressure on the mainframe to perform.
  • Eighty-seven percent of CIOs believe complexity is creating new risks in relation to application performance.
  • Seventy percent of CIOs say mobility has increased MIPS consumption by more than a quarter since their mainframes began interacting with mobile applications.
  • Sixty-three percent of companies are unaware of application problems until calls start coming into the helpdesk.
  • Eighty percent of IT departments are fire-fighting performance problems in war-room scenarios on a monthly basis.
MIPS are Prohibitive for TCO

Mainframe usage fees make up a significant component in the overall cost of ownership, nearly 10% to 40% of an organization’s IT budget, depending on the size of the mainframe footprint. Of course, running computer software costs money on every computing platform, but for mainframe users the incurred costs are especially high. According the US Department of Defense, average mainframe per hour spend in 2014 sits at a staggering $499.98, sixteen times the cost of running an equivalent computing environment on a Linux platform with similar performance characteristics. Even worse, that per-hour average is rising year-over-year due in part to the fact that MIPS consumption is steadily on the rise. IT industry analysts estimate that most large organizations utilizing mainframes should expect their systems' CPU resource consumption to increase by 1520% annually.

Solving the MIPS Problem

How does a company reduce the costs of their mainframe environment in a way that is timely enough to make a relatively immediate impact and pose relatively low risk?  The answer incidentally, lies within the crux of the problem: MIPS.  Mainframes weren't originally designed to interact with customer-facing applications, and mobile was still just an imagined future. Now that the old and new worlds have been forced to collide, the challenge of managing these costs can be daunting.  However, organizations can significantly reduce MIPS consumption by identifying high consumption workloads within the existing environment and offloading these workloads onto less costly systems.  Companies need to move from a reactive to a proactive approach, identifying and rectifying problems before they occur. This exercise also presents the opportunity for the firm to explore the possibility of utilizing the cloud to reduce infrastructure costs and increase flexibility.  Re-platforming these high MIPS consuming workloads is a relatively low-cost option and it reuses the original business logic and other assets from the old mainframe system producing a functionally equivalent operating environment, decreasing total cost of ownership, introducing flexibility in infrastructure and underlying software, and as a bonus, inching the old big iron a little bit closer to the fully modernized ideal world that every IT manager dreams of.  This whitepaper offers some real-world examples of companies using this technique.

If you want to stay on the mainframe, don’t worry- there’s another option for reducing overall cost.  Directly offloading workloads like reporting using conversion software enables companies to take advantage of off-mainframe processing without interrupting or impacting operation processes or end users.  You can read about Moorcroft Debt Recovery, a UK-based financial services firm who used this approach as part of their phased mainframe modernization effort.

As mobile and other new use cases continue to drive MIPS and mainframe cost, CIOs and CFOs will be forced to confront this challenge.  The good news is that cost reduction doesn’t have to be risky, and proven solutions are out there, being used by some of the biggest brands in the world.

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