Enterprise Mainframe Spending Expected to Increase Alongside Public Cloud Adoption, ISG Study Finds
03 October 2024 - 11:00PM
Business Wire
Survey of global decision-makers finds
conflicting enterprise demands are keeping organizations on
mainframes
Companies that use mainframes in their current IT operations
expect to increase their mainframe spending even as they increase
their adoption of public cloud, according to new survey research
from leading global technology research and advisory firm
Information Services Group (ISG) (Nasdaq: III).
The new ISG Market Lens™ Mainframe and Mainframe as a Service
(MFaaS) Study finds one-third of large enterprises expect to
upgrade existing mainframe processors or storage, 40 percent expect
to increase capacity for traditional mainframes, and one in six
expect to purchase a new mainframe over the next three years.
“Mainframes remain important in large enterprises, as
organizations strategically balance between mainframe, MFaaS
offerings and public cloud,” said Alex Bakker, ISG Distinguished
Analyst and co-author of the study. “Though public cloud adoption
continues to grow, it will not totally eclipse mainframes in
enterprise IT. In fact, mainframe compute and storage requirements
are expected to rise, particularly in the form of MFaaS.”
The ISG study was conducted in July 2024 and covered 200
executives in the Americas and Europe with decision-making
responsibility for mainframe and MFaaS strategy. The results show
enterprises with the largest current IT workloads expect to see the
greatest increase in need across all platforms, while those with a
high proportion of traditional mainframe expect to accelerate
transition to MFaaS to keep pace with their needs.
“Mainframe demand is being fueled by enterprises’ inability to
decommission their legacy infrastructure, often due to conflicting
enterprise demands such as the adoption of AI, while others are
prioritizing data security and resiliency,” said Michael Dornan,
principal analyst and co-author of the study. “At the same time,
application storage and compute demands are on the rise and IT
departments face pressure to optimize costs.”
Over the past three years, nearly 60 percent of enterprises have
migrated some applications to the cloud, and over 40 percent have
migrated to MFaaS, the study found. MFaaS is often viewed as a
lower-cost solution that offers the flexibility and
interoperability associated with public cloud with fewer migration
and security challenges. It’s also a potential solution to
mainframe talent challenges as those with traditional skills retire
from the talent pool.
Top enterprise mainframe priorities are cost optimization,
retiring legacy applications and infrastructure, adding AI
capabilities and information security, but of these, the study
found only security is rated as performing well. Fifty-four percent
of respondents say information security on their current mainframe
or MFaaS is performing better than peer organizations, while cost
reduction (rated better than peer companies by 36 percent of
respondents), AI (29 percent) and legacy retirement (31 percent)
are all struggling to keep pace.
In addition, nearly a third of enterprises say accessing
mainframe skills and talent is a challenge, as early retirement
reduces staff availability and new employees are less likely to
know legacy programming languages. Nearly all respondents were
using managed service providers to support mainframe modernization
and operations or MFaaS services.
“The competing priorities and challenges surrounding mainframes
will drive enterprise demand for mainframe modernization services
as companies turn to providers to help them get the full value from
existing investments,” Dornan said. “Providers will be expected to
impact the bottom line through cost optimization and deliver the
benefits of integration and interoperability with other systems and
services, including cloud.”
ISG Market Lens™ buyer behavior studies combine findings from
surveys of senior-level global executives with expert ISG research
and analysis on market trends and strategic business initiatives.
Recent studies explored AI, cloud, application development and
maintenance, BPO, cybersecurity, global capability centers and
sustainability.
Contact ISG for more information on ISG Market Lens
research.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading
global technology research and advisory firm. A trusted business
partner to more than 900 clients, including more than 75 of the
world’s top 100 enterprises, ISG is committed to helping
corporations, public sector organizations, and service and
technology providers achieve operational excellence and faster
growth. The firm specializes in digital transformation services,
including AI, cloud and data analytics; sourcing advisory; managed
governance and risk services; network carrier services; strategy
and operations design; change management; market intelligence and
technology research and analysis. Founded in 2006, and based in
Stamford, Conn., ISG employs more than 1,600 digital-ready
professionals operating in more than 20 countries—a global team
known for its innovative thinking, market influence, deep industry
and technology expertise, and world-class research and analytical
capabilities based on the industry’s most comprehensive marketplace
data. For more information, visit www.isg-one.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20241003290902/en/
Press Contacts: Will Thoretz, ISG +1 203 517 3119
will.thoretz@isg-one.com Julianna Sheridan, Matter Communications
for ISG +1 978 518 4520 isg@matternow.com
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