For over six decades IBM Z mainframes have quietly powered the business-critical applications of some of the biggest enterprises in the world. The platform has been delivering high-speed data processing for high volume transaction servers, databases and applications that require the highest levels of reliability, security and resilience.
The mainframe's staying power and reliability in maintaining those core applications over the years means it is sometimes mistakenly viewed as a legacy system limited only to those capabilities, rather than as a strategic platform for driving businesses forward, supporting digital transformation and the latest developments in artificial intelligence.
However, a recent study by the IBM Institute for Business Value paints a different picture. One of its key findings is that enterprises that recognize mainframes as strategic assets and enablers - rather than aging systems kept alive purely to keep core transactional and other underlying systems ticking over - are seeing tangible business benefits.
In fact, these 'Adaptive Enterprises' were seen to outperform their competitors in a variety of ways, including:
- 14% higher revenue growth
- 8% greater profitability and efficiency
- 7% more innovation
- 9% higher customer engagement
In the report, 'Mainframes as mainstays of digital transformation: A foundation for hybrid cloud optimization and AI innovation', this special subset of companies stands out because they understand the mainframe's potential and lean into opportunities to innovate on the platform while making it part of a hybrid multi-platform strategy.
Specifically, the report suggests adaptable enterprises display the three common characteristics described below.
1. They embrace a hybrid-by-design philosophy
Many enterprises run a hybrid, multiple platform IT architecture that has evolved over time in ad hoc ways as new applications have been added. This results in a fragmented infrastructure with multiple siloed systems, creating inefficiencies and limiting innovation while making it difficult to respond to changing business needs. Adaptable enterprises, instead adopt a hybrid-by-design philosophy which is different because it intentionally integrates mainframes with cloud and distributed computing environments, allowing applications to run on the most optimal platform.
This intentional approach supports enterprise-wide cross-platform integration and data sharing, meaning that organizations can allocate workloads in ways that make the most of the mainframe's strengths in transaction processing and data security, for example, as well as taking advantage of the flexibility and scalability of the public cloud. In this way the requirements of the business can drive technology decisions instead of technology issues forcing the strategy.
In fact, organizations that have embraced hybrid-by-design strategies report 3x higher return on investment (ROI) the report suggests.
By allowing seamless data sharing, improved scalability and greater agility, hybrid-by-design set ups can help enterprises achieve their business goals more effectively. For example, the report highlights a case study in which Citi, one of the largest banks in America, was able to consolidate workloads onto mainframes to support its sustainability targets, while meeting its objectives for security and scalability. By reallocating its workloads, Citi was able to cut its energy consumption by 75%, its space requirements by 50% and its carbon footprint by over 850 metric tons annually for every five machines worth of workload consolidation.
2. They value the mainframe's role in resiliency, security and data privacy
Mainframes store and process vast amounts of business-critical data yet they account for only 8% of total IT spend - less than one-tenth of the cost of all other technologies and platforms combined.
We all know that IBM Z is well-suited to application workloads that require high levels of security, reliability, and scalability, such as financial transactions, healthcare records, and government services. For these workloads the platform is virtually unrivalled in terms of efficiency and performance and its ability to manage cost and risk.
Adaptive Enterprises value and embrace these strengths by investing in the mainframe's potential for the long term. This includes developing mainframe talent and closing skills gaps as well as modernizing IBM Z applications to integrate with other platforms and applications.
One of the ways they can do this is by embracing the Gen AI-driven application modernization tools which are revolutionizing mainframe modernization, the report suggests. These technologies are closing mainframe skills gaps by allowing developers to modernize or build applications faster and more efficiently. 61% of executives in the study said using gen AI for application modernization efforts on mainframes is important to their organization.
One example is Westfield Insurance, a leading US-based property and casualty insurance company which ran a pilot project using using a gen AI code assistant solution to help developers more quickly understand applications and their dependencies as well as to streamline documentation leading to faster onboarding of new developers. The company's development team saved 150 hours, a 30% decrease in time, while sifting through 47,000 lines of code. An additional 20 hours was saved in application discovery analysis leading to an 80% time saving.
3. They invest in the mainframe's potential for AI-driven innovation and value creation
IT executives already rely on mainframes for storing and processing business-critical data and transactions. Now the savviest ones, such as Adaptive Enterprises, are turning to AI on the platform to enable enhanced decision-making, cybersecurity and systems management.
Research suggests 79% of IT executives believe mainframes are essential for AI-driven innovation. For example, by using AI accelerators on mainframes it's possible to integrate AI capabilities directly into transactional workloads. This can unlock real-time insights and efficiencies enabling use cases such as detecting card payment fraud before transactions have been processed.
For example, one North American bank that used mainframe-based AI models to transform its fraud detection processes, by scoring 15,000 credit card transactions per second in real time, was able to cut fraud-related costs by $20 million annually.
Modern mainframes also support Ensemble AI which combines traditional AI models and large language models (LLMs) to make business outcomes more accurate and precise. For example, traditional AI may be used to assess whether a bank payment is fraudulent, and LLMs can then be applied to make the prediction more accurate.
At the same time, 74% of executives cite the importance of integrating AI into mainframe operations and transforming system management and maintenance. AI-powered automation, predictive analytics, self-healing and self-tuning capabilities, can proactively detect and prevent issues, optimize workflows and improve system reliability.
Conclusion
The IBM Institute for Business Value report shows that organizations that treat mainframes as strategic assets - embracing hybrid-by-design, investing in upskilling and modernization as well as AI integration - are achieving measurable gains in efficiency, innovation and growth. Rather than viewing mainframes as legacy systems, businesses need to use their strengths to target today's challenges and opportunities. In this way, IBM Z can go beyond what many consider its traditional responsibilities and play an important role in modern digital transformation strategies.
This article was originally published on the IBM Community.