The Math That Makes Mainframe Outsourcing Work

IT leaders are faced with increasingly difficult decisions every day as their IT environments become more complex and difficult to maintain. However, when making decisions regarding your enterprise’s IT, it’s essential to evaluate whether the solution also reduces costs and supports business initiatives. If this is the case, then the solution makes sense. Seems pretty simple, right? When it comes to the mainframe, most enterprises agree that this powerful and robust technology makes sense, but it comes at a cost. CIOs will have to face the inevitable question at some point, “Should I outsource our mainframe operations, or do we continue owning and maintaining our own?” To answer this pivotal question, look at the math that makes mainframe outsourcing work. Consider the costs associated with owning and maintaining your mainframe internally and compare them to the costs associated with outsourcing your mainframe. Can we reduce costs and support our business initiatives at the same time with outsourcing? Let’s find out.

Maintaining Your Own Mainframe

When you continue to invest in the people and tools necessary to maintain your mainframe in-house, costs can continue to rise. Costs need to be considered for your hardware, software, support employees, and even your facilities.

Hardware: If you already own your mainframe hardware, it may seem logical to keep it. However, just because it’s already paid for doesn’t mean it will cost you less. Aging hardware can end up being more costly due to the operational and maintenance costs associated with outdated and inefficient equipment. You are responsible for buying, maintaining, and updating your own mainframe, and that comes along with all of the extra financial responsibility, too.
Software: Mainframe software can end up costing you even more than your actual mainframe hardware. This can be the largest cost component of owning a mainframe for most enterprises.
Support Employees: With an aging and disappearing workforce of mainframe support workers, it’s becoming increasingly difficult (and expensive) for enterprises to maintain and update legacy mainframe hardware, software, and applications in-house.
Facilities: Most enterprises are literally running out of space and power to accommodate their IT environments. Expanding or building new facilities can be a costly burden.

Outsourcing Your Mainframe

Outsourcing your mainframe can come in many different flavors. You can look to outsource your applications and infrastructure, your software, and even your hardware, or a combination of these. Outsourcing does come with its own associated costs, but they can be a lot less than those that are incurred in-house, if you find the right combination.

Hardware: By outsourcing your hardware, you can accommodate your fluctuations in capacity needs. Therefore, you only pay for the size mainframe that you need by taking advantage of a provider’s expertise, buying power, and ability to host multiple clients on the same hardware.
Software: Taking advantage of provider’s economies of scales can reduce your software pricing tremendously. By having a third-party standardize and automate your software upgrade processes and shop around for the best options for your portfolio, optimal terms can be negotiated to maximize cost savings.
Support Employees: Outsourced management allows you to focus on more strategic business initiatives while eliminating the costs associated with trying to replace capable mainframe staff internally.
Facilities: Third-party consultants can provide co-location facilities or can offer other cost-effective alternatives to expanding and building your own facilities.

It all comes down to whether outsourcing your mainframe or keeping operations in-house makes sense for your enterprise, both financially and strategically. It’s true that there are costs associated with both, but after looking at the inherent costs associated with utilizing mainframe technology for a business, outsourcing offers solutions that both combat and minimize these financial concerns while also maintaining the necessary service levels for your enterprise.