How Unisys Enables ClearPath Mainframe Apps to Transition Seamlessly to Azure Cloud Without Code Changes

A discussion on how many organizations face a reckoning to move mainframe applications to a cloud model without degrading the venerable and essential systems of record. 

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Unisys and Microsoft.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions and you’re listening to BriefingsDirect.

Gardner

When applications are mission-critical, where they are hosted matters far less than keeping them operating smoothly -- as many of them have for decades.

Yet many organizations face a reckoning, a ticking time bomb of sorts, to move mainframe applications to a cloud model. The trick is to find a dependable, repeatable way to transition to cloud without degrading these vulnerable and essential systems of record. 

Stay with us now as we explore long-awaited means to finally solve the cloud-adoption quandary. We’re going to learn how Unisys and Microsoft can transition ClearPath Forward assets to Microsoft Azure cloud without risky code changes.

To learn more about the latest onramps to secure and agile cloud model adoption, please join me now in welcoming Chuck Lefebvre, Senior Director of Product Management for ClearPath Forward at Unisys. Welcome, Chuck.

Chuck Lefebvre: Thank you, Dana. I’m happy to be here.

Gardner: We’re glad to have you. We’re also here with Bob Ellsworth, Worldwide Director of Mainframe Transformation at Microsoft. Welcome, Bob.

Bob Ellsworth: Thank you, Dana. Nice to be here as well.

Gardner: Bob, what’s driving the demand nowadays for more organizations to run more of their legacy apps in the public cloud?

Ellsworth: We see that more and more customers are embracing digital transformation, and they are finding the cloud an integral part of their digital transformation journey. And when we think of digital transformation, at first it might begin with optimizing operations, which is a way of reducing costs by taking on-premises workloads and moving them to the cloud.

But the journey just starts there. Customers now want to further empower employees to access the applications they need to be more efficient and effective, to engage with their customers in different ways, and to find ways of using cloud technologies to transform products, such as machine learning (ML), artificial intelligence (AI), and business intelligence (BI).

Gardner: And it’s not enough to just have some services or data in the cloud. It seems there’s a whole greater than the sum of the parts for organizations seeking digital transformation -- to get more of their IT assets into a cloud or digitally agile environment.

Destination of choice: Cloud

Ellsworth

Ellsworth: Yes, that’s absolutely correct. The beauty is that you don’t have to throw away what you have. You can take legacy workloads such as ClearPath workloads and move those into the cloud, but then continue the journey by embracing new digital capabilities such the advanced services such as ML, AI, or BI so you can extend the usefulness and benefits of those legacy applications.

 

Gardner: And, of course, this has been a cloud adoption journey for well over 10 years. Do you sense that something is different now? Are there more means available to get more assets into a cloud environment? Is this a tipping point?

Ellsworth: It is a tipping point. We’ve seen -- especially around the mainframe, which is what I focus on -- a huge increase in customer interest and selection of the cloud in the last 1.5 years as the preferred destination. And one of the reasons is that Azure has absolutely demonstrated its capability to run these mission- and business-critical workloads.

Gardner: Are these cloud transitions emerging differently across the globe? Is there a regional bias of some sort? Is the public sector lagging or leading? How about vertical industries? Where is this cropping up first and foremost?

Ellsworth: We’re seeing it occur in all industries; in particular, financial services. We find there are more mainframes in financial services, banking capital markets, and insurance than in any other industries.

So we see a propensity there where, again, the cloud has become a destination of choice because of its capability to run mission- and business-critical workloads. But in addition, we’re seeing this in state and local governments, and in the US Federal Government. The challenge in the government sector is the long cycle it takes to get funding for these projects. So, it’s not a lack of desire, it’s more the time it takes to move through the funding process.

Gardner: Chuck, I’m still surprised all these years into the cloud journey that there’s still such a significant portion of data and applications that are not in the cloud environment. What’s holding things back? What’s preventing enterprises from taking advantage of cloud benefits?

Lefebvre: A lot of it is inertia. And in some cases, incorrect assumptions about what would be involved in moving. That’s what’s so attractive about our Unisys ClearPath solution. We can help clients move their ClearPath workloads without change. We take that ClearPath software stack from MCP initially and move it and re-platform it on Microsoft Azure.

Learn How to Transition

ClearPath Workloads
To the Cloud

And that application and data comes across with no re-compilation, no refactoring of the data; it’s a straightforward transition. So, I think now that we have that in place, that transition is going to go a lot smoother and really enable that move to occur.

 

I also second what Bob said earlier. We see a lot of interest from our financial partners. We have a large number of banking application partners running on our ClearPath MCP environment, and those partners are ready to go and help their clients as an option to move their workloads into the Azure public cloud.

Pandemic puts focus on agility

Gardner: Has the disruption from the coronavirus and the COVID-19 disease been influencing this transition? Is it speeding it up? Slowing it down? Maybe some other form of impact?

Lefebvre

Lefebvre: I haven’t seen it affecting any, either acceleration or deceleration. In our client-base most of the people were primarily interested initially in ensuring their people could work from home with the environments they have in place.

I think now that that’s settled in, they’ve sorted out their virtual private networks (VPNs) and their always-on access, processes, that perhaps now we’ll see some initiatives evolving. I think, initially, it was just businesses supporting their employees working from home. 

My perspective is that that should be enabled equally as well, whether they are running their backend systems of record in a public cloud or on-premises. Either way would work for them.

Gardner: Bob, at Microsoft, are you seeing any impact from the pandemic in terms of how people are adopting cloud services?

Ellsworth: We’re actually seeing an increase in customer interest and adoption of cloud services because of COVID-19. We’re seeing that in particular in some of our solutions such as Teams for doing collaboration and webinars, and connecting with others remotely. We’re seeing a big increase there.

And Office 365, we’ve seen a huge increase in deployments of customers using the Office 365 technology. In addition, Azure; we’ve also seen a big increase in Azure consumption as customers are dealing with the application growth and requirements of running these applications.

As far as new customers that are considering moving to the cloud, I had thought originally, back in March when this was starting to hit, that our conversations would slow down as people dealt with more immediate needs. But, in fact, it was about a two-to-three-week slow down. But now, we’re seeing a dramatic increase in interest in having conversations about what are the right solutions and methods to move the workloads to the cloud.

So, the adoption is accelerating as customers look for ways to reduce cost, increase agility, and find new ways of running the workloads that they have today.

Gardner: Chuck, another area of impact in the market is around skills. There is often either a lack of programmers for some of these older languages or the skills needed to run your own data centers. Is there a skill factor that’s moving the transition to cloud?

As we see our clients showing interest in moving to the pubic cloud, they are now looking to do that for mainframe applications. Once they do that, no longer do they have to worry about the care and feeding of that mainframe infrastructure.

Lefebvre: Oh, there certainly is. One of the attractive elements of a public cloud is the infrastructure layer of the IT environment is managed by that cloud provider. So as we see our clients showing interest in moving to the public cloud -- first with things like, as Bob said, Office 365 and maybe file shares with SharePoint – they are now looking at doing that for mainframe applications. And when they do that, they no longer have to be worried about that talent to do the care and feeding of that infrastructure. As we move those clients in that direction, we’re going to take care of that ClearPath infrastructure, the day-to-day management of that environment, and that will be included as part of our offering.

We expect most clients – rather than managing it themselves in the cloud – will defer to us, and that will free up their staff to do other things. They will have retirements, but less risk.

Gardner: Bob, another issue that’s been top-of-mind for people is security. One of the things we found is that security can be a tough problem when you are transitioning, when you change a development environment, go from development to production, or move from on-premises to cloud. 

How are we helping people remain secure during a cloud transition, and also perhaps benefit from a better security posture once they make the transition?

Time to transition safely, securely

Ellsworth: We always recommend making security part of the planning process. When you’re thinking of transforming from a datacenter solution to the cloud, part of that planning is for the security elements. We always look to collaborate with our partners, such as Unisys, to help define that security infrastructure and deployment.

What’s great about the Azure solutions is we’ve focused on hybrid as the way of deploying customers’ workloads. Most customers aren’t ready to move everything to the cloud all at the same time. For that reason, and with the fact that we focus on hybrid, we allow a customer to deploy portions of the workload to the cloud and the other portions in their data center. Then, over time, they can transition to the cloud.

But during that process supporting your high levels of security for user access, identity management, or even controls of access to the right applications and data -- that’s all done through the planning and using technologies such as Microsoft Active Directory and synchronization with Azure Active Directory. So with that planning it’s so important to ensure successful deployments and ensure the high levels of security that customers require.

Gardner: Chuck, anything to offer on the security?

Lefebvre: Yes, we’ll be complementing everything Bob just described with our Unisys Stealth technology. It allows always-on access and isolation capabilities for deployment of any of our applications from Unisys, but in particular the ClearPath environment. And that can be completely deployed in Azure or, as Bob said, in a hybrid environment across an enterprise. So we are excited about that deployment of Stealth to complement the rigor that Microsoft applies to the security planning process.

Gardner: We’ve described what’s driving organizations to the cloud, the fact that it’s accelerating, that there’s a tipping point in what adoption can be accomplished safely and reliably. We’ve also talked about what’s held people back and their challenges.

Let’s now look at what’s different about the latest solutions for the cloud transition journey. For Unisys, Chuck, how are your customers reconciling the mainframe past with the cloud future?

No change in digital footprint

Lefebvre: We are able to transition ClearPath applications with no change. It’s been roughly 10 years since we’ve been deploying these systems on Intel platforms, and in the case of MCP hosting it on a Microsoft Windows Server kernel. That’s been in place under our Unisys Libra brand for more than 10 years now.

In the last couple of years, we’ve also been allowing clients to deploy that software stack on virtualized servers of their choice: on Microsoft Hyper-V and the VMware virtualization platforms. So it’s a natural transition for us to move that and offer that in Azure cloud. We can do that because of the layered approach in our technology. It’s allowed us to present an approach to our clients that is very risk-free, very straightforward.

Learn How to Transition

ClearPath Workloads
To the Cloud

The ClearPath software stack sits on a Windows kernel, which is also at the foundation level offered by the Azure hybrid infrastructure. The applications therefore don’t change a bit, literally. The digital footprint is the same. It’s just running in a different place, initially as platform-as-a-service (PaaS).

The cloud adoption transition is really a very low-risk, safe, and efficient journey to the public cloud for those existing solutions that our clients have on ClearPath.

Gardner: And you described this as an ongoing logical, cascading transition -- standing on the shoulders of your accomplishments -- and then continuing forward. How was that different from earlier migrations, or a lift-and-shift, approach? Why is today’s transition significantly different from past migrations?

Lefebvre: Well, a migration often involves third-parties doing a recompilation, a refactoring of the application, so taking the COBOL code, recompiling it, refactoring it into Java, and then breaking it up, and moving the data out of our data formats and into a different data structure. All of those steps have risk and disruption associated with them. I’m sure there are third-parties that have proven that. That can work. It just takes a long time and introduces risk.

For Unisys ClearPath clients who have invested years and years in those systems of record, that entire stack can now run in a public cloud using our approach -- as I said before -- with absolutely not a single bit of change to the application or the data.

Gardner: Bob, does that jibe with what you are seeing? Is the transition approach as Bob described it an advantage over a migration process as he described?

Ellsworth: Yes, Chuck described it very well. We see the very same thing. What I have found, -- and I’ve been working with Unisys clients since I joined Microsoft in 2001, early on going to the Unisys UNITE conference -- was that Unisys clients are very committed and dedicated to their platform. They like the solutions they are using. They are used to using those developer tools. They have built up the business-critical, mission-critical applications and workloads.

For those customers that continue to be committed to the platform, absolutely, this kind of what I call “re-platforming” could easily be called a “transition.” You are taking what you currently have and simply moving it onto the cloud. It is absolutely the lowest risk, the least cost, and the quickest time-to-deployment approach.

The vast majority of committed Unisys customers want to stay on the platform, and this provides the fastest way to get to the cloud -- with less risk and quickest benefits.

For those customers, just like with every platform, when you have an interest to transform to a different platform, there are other methods available. But I would say the vast majority of committed Unisys customers want to stay on the platform, and this provides the fastest way to get to the cloud -- with the less risk and the quickest benefits.

Gardner: Chuck, the process around cloud adoption has been going on for a while. For those of us advocating for cloud 10 or 12 years ago, we were hoping that it would get to the point where it would be a smooth transition. Tell me about the history and the benefits of how ClearPath Forward and Azure had come together specifically? How long have Microsoft and Unisys been at this? Why is now, as we mentioned earlier, a tipping point?

Lefebvre: We’ve been working on this for a little over a year. We did some initial work with two of our financial application partners and North America banking partners and the initial testing was very positive. Then as we were finishing our engineering work to do the validation, our internal Unisys IT organization, which operates about 25 production applications to run the business, went ahead in parallel with us and deployed half of those on MCP in Azure, using the very process that I described earlier.

Today, they are running 25 production applications. About half of them have been there for nine months and the other half for the last two months. They are supporting things like invoicing our customers, tracking our supply chain status, and so, a number of critical applications. 

We have taken that journey not just from an engineering point of view, but we’ve proven it to ourselves. We drank our own champagne, so to speak, and that’s given us a lot of confidence. It’s the right way to go, and we expect our clients will see those benefits as well.

Gardner: We haven’t talked about the economics too much. Are you finding, now that you’ve been doing this for a while, that there is a compelling economic story? A lot of people are fearful that a transition or migration would be very costly, that they won’t necessarily save anything by doing this, and so maybe are resistant. But what’s the dollars’ and cents’ impact that you have been seeing now that you’ve been doing this while transitioning ClearPath to Azure?

Rapid returns

Lefebvre: Yes, there are tangible financial benefits that our IT organization has measured. In these small isolated applications, they calculated about a half-a-million dollars in savings across three years in their return on investment (ROI) analysis. And that return was nearly immediate because the transition for them was mostly about planning the outage period to ensure a non-stop operation and make sure we always supported the business. There wasn’t actually a lot of labor, just more planning time. So that return was almost immediate.

Gardner: Bob, anything to offer on the economics of making a smooth transition to cloud?

Ellsworth: Yes, absolutely. I have found a couple of catalysts for customers as far as cost savings. If a customer is faced with a potential hardware upgrade -- perhaps the server they are running on is near end-of-life -- by moving the workload to the cloud and only paying for the consumption of what you use, it allows you to avoid the hardware upgrade costs. So you get some nice and rapid benefits in cost avoidance.

In addition, for workloads such as test and development environments, or user acceptance testing environments, in addition to production uses, the beauty of the cloud pricing is you only pay for what you are consuming.

So for those test and development systems, you don’t need to have hardware sitting in the corner waiting to be used during peak periods. You can spin up an environment in the cloud, do all of your testing, and then spin it back down. You get some very nice cost savings by not having dedicated hardware for those test and development environments.

Gardner: Let’s dig into the technology. What’s under the hood that’s allowing this seamless cloud transition, Chuck?

Secret sauce

Lefebvre: Underneath the hood is the architecture that we have transformed to over the last 10 years where we are already running our ClearPath systems on Intel-based hardware on a Microsoft Windows Server kernel. That allows that environment to be used and re-platformed in the same manner.

To accomplish that, originally, we had some very clever technology that allows the Unisys compilers generating unique instructions to be emulated on an Intel-based, Windows-based server.

That’s really the fundamental underpinning that first allowed those clients to run on Intel servers instead of on proprietary Unisys-designed chips. Once that’s been completed, we’re able to be much more flexible on where it’s deployed. The rigor to which Microsoft has ensured that Windows is Windows -- no matter if it’s running on a server you buy, whether it’s virtualized on Hyper-V, or virtualized in Azure -- really allows us to achieve that seamless operation of running in any of those three different models and environments.

Gardner: Where do you see the secret sauce, Bob? Is the capability to have Windows be pure, if you will, across the hybrid spectrum of deployment models?

Learn How to Transition

ClearPath Workloads
To the Cloud

Ellsworth: Absolutely, the secret sauce as Chuck described was that transformation from proprietary instruction sets to standard Intel instruction sets for their systems, and then the beauty of running today on-premises on Hyper-V or VMware as a virtual machine (VM). 

And then the great thing is with the technologies available, it’s very, very easy to take VMs running in the data center and migrate them to infrastructure as a service (IaaS) VMs running in the cloud. So, seamless transformation and making that migration.

You’re taking everything that’s running in your production system, or test and development systems, and simply deploying them up in the cloud’s VM instead of on-premises. So, a great process. Definitely, the earlier investment that was made allows that capability to be able to utilize the cloud.

Gardner: Do you have early adopters who have gone through this? How do they benefit?

Private- and public-sector success stories

Lefebvre: As I indicated earlier, our own Unisys IT operation has many production applications running our business on MCP. Those have all been moved from our own data center on an MCP Libra system to now running in the Microsoft Azure cloud. Our Unisys IT organization has been a long-time partner and user of Microsoft Office 365 and SharePoint in the cloud. Everything has now moved. This, in fact, was one of the last remaining Unisys IT operations that was not in the public cloud. That was part of our driver, and they are achieving the benefits that we had hoped for.

We also have two external clients, a banking partner is about to deploy a disaster recovery (DR) instance of their on-premises MCP banking application. That’s coming from our partner, Fiserv. Fiserv’s premier banking application is now available for running in Azure on our MCP systems. One of the clients is choosing to host a DR instance in Azure to support their on-premises production workload. They like that because, as Bob said, they only have to pay for it when they fire it up if they need to use that DR environment.

We have another large state government project that we’re just about to sign, where that client will be doing some of their ClearPath MCP workload and transition to and manage that in an Azure public cloud.

Once that contract is signed and we get agreement from that organization, we will be using that as one of our early use case studies.

Gardner: The public sector, with all of their mainframe apps, seems like a no-brainer to me for these transitions to the cloud. Any examples from the public sector that illustrate that opportunity?

Ellsworth: We have a number of customers, specifically on the Unisys MCP platform, that are evaluating moving their workloads from their data centers into the cloud. We don’t have a production system as far as I know yet, but they’re in the late stages of making that decision.

There are so many ways of utilizing the cloud, for things like DR, at a very low cost, instead of having to have a separate data center or failover system. Customers can even leave their production on-premises in the short-term and stand up their test and development in the cloud and run MCP system in that way.

And then, once they’re in the cloud, they gain the capability to set up a high-availability DR system or high-availability production system, either within the same Azure data center, or failover from one system to another if they have an outage, and all at a very low cost. So, there are great benefits.

One other benefit is elasticity. When I talk about customers, they say, “Well, gee, I have this end-of-month process and I need a larger mainframe then because of those occasional higher capacity requirements. Well, the beauty of the cloud is the capability to grow and shrink those VMs when you need more capacity for such end-of-month process, for example.

Again, you don’t have to pre-purchase the hardware. You really only pay for the consumption of the capacity when you need it. So, there are great advantages and that’s what we talk to customers about. They can get benefits from considering deploying new systems in the cloud. Those are some great examples of why we’re in late-stage conversations with several customers about deploying the solution.

Increased data analytics

Gardner: I supposed it’s a little bit early to address this, but are there higher-order benefits when these customers do make the cloud transition? You mentioned earlier AI, ML, and getting more of your data into an executable environment where you can take advantage of analytics across more and larger data sets.

Is there another shoe to drop when it comes to the ROI? Will they be able to do things with their data that just couldn’t have been done before, once you make a transition to cloud?

Ellsworth: Yes, that’s absolutely correct. When you move the systems up to the cloud, you’re now closer to all the new workloads and the advanced cloud services you can utilize to, for example, analyze all that data. It’s really about turning more data into intelligent action. 

In the past, when you built custom applications, you had to pretty much code everything yourself. Today, you consume services. There's no reason to build an application fro scratch. You consume services form the cloud.

Now, if you think of back to the 1980s and 1990s, or even 2000s, when you were building custom applications, you had to pretty much code everything yourselves. Today, the way you build an application is to consume services. There’s no reason for a customer to build a ML application from scratch. Instead, you consume ML services from the cloud. So, once you’re in the cloud, it opens up a world of possibilities to being able to continue that digital business transformation journey.

Lefebvre: And I can confirm that that’s a key element for our product proposition as well as from a ClearPath point of view. We have some existing technology, a particular component called Data Exchange, that does an outstanding change and data capture model. We can pump the data coming into that backend system of record and using, Kafka, for example, feed that data directly into an AI or ML application that’s already in place.

One of the key areas for future investment -- now that we have done the re-platforming to PaaS and IaaS – is extending our ePortal technology and other enabling software to ensure that these ClearPath applications really fit in well and leverage that cloud architecture. That’s the direction we see a lot of benefit in as we bring these applications into the public Azure cloud.

The cloud journey begins

Gardner: Chuck, if you are a ClearPath Forward client, you have these apps and data, what steps should you be taking now in order to put yourself in an advantageous position to make the cloud transition? Are there pre-steps before the journey? Or how should you be thinking in order to take advantage of these newer technologies?

Lefebvre: First of all, they should engage with their Unisys and Microsoft contacts that work with your organization to begin consultation on that journey. Data backup, data replication, DR, those elements around data and your policy with respect to data are the things that are likely going to change the most as you move to a different platform -- whether that’s from a Libra system to an on-premises virtualized infrastructure or to Azure.

What you’ve done for replication with a certain disk subsystem probably won’t be there any longer. It’ll be done in a different way, and likely it’ll be done in a better way. The way you do your backups will be done differently.

Now, we have partnered with Dynamic Solutions International (DSI) and they offer a virtualized virtual tape solution so that you can still use your backup scripts on MCP to do backups in exactly the same way in Azure. But you may choose to alter the way you do backups.

So, your strategy for data and how you handle that, which is so very important to these enterprise class mainframe applications, that’s probably the place where you’ll need to do the most thinking and planning, around data handling.

Gardner: For those familiar with BriefingsDirect, we like to end our discussions with a forward-looking vision, an idea of what’s coming next. So when it comes to migrating, transitioning, getting more into the cloud environments -- be that hybrid or pure public cloud -- what’s going to come next in terms of helping people make the transition but also giving them the best payoff when they get there?

The cloud journey continues

Ellsworth: It’s a great question, because you should think of the world of opportunity, of possibility. I look back at my 47 years in the industry and it’s been incredible to see the transformations that have occurred, the technology advancements that have occurred, and they are coming fast and furious. There’s nothing slowing it down.

And so, when we see the cloud today, a lot of customers are still considering the cloud for strategy and for building any new solutions. You go into the cloud first and have to justify staying on-premises, and then customers move to a cloud-only strategy where they’re able to not only deploy new solutions but migrate their existing workloads such as ClearPath up to the cloud. They get to a point where they would be able to shut down most of what they run in their data centers and get out of that business of operating IT infrastructure and having operation support provided for them as-a-service.

Learn How to Transition

ClearPath Workloads
To the Cloud

Next, they move into transforming through cultural change in their own staff. Today the people that are managing, maintaining, and running new systems will have an opportunity to learn new skills and new ways of doing things, such as cloud technology. What I see over the next two to three years is a continuation of that journey, the transformation not just of the solutions the customers use, but also the culture of the people that operate and run those solutions.

Gardner: Chuck, for your installed base across the world, why should they be optimistic about the next two or three years? What’s your vision for how their situation is only going to improve?

Lefebvre: Everything that we’ve talked about today is focused on our ClearPath MCP market and the technology that those clients use. As we go forward into 2021, we’ll be providing similar capabilities for our ClearPath OS 2200 client base, and we’ll be growing the offering.

Today, we’re starting with the low-end of the customer base: development, test, DR, and the smaller images. But as the Microsoft Azure cloud matures, as it scales up to handle our scaling needs for our larger clients, we’ll see that maturing. We’ll be offering the full range of our products in the Azure cloud, right on up to our largest systems.

That builds confidence across the board in our client base; in Microsoft and in Unisys. We want to crawl, then walk, and then run. That journey, we believe, is the safest way to go. And as I mentioned earlier, this initial workload transformation is occurring through a re-platforming approach. The real exciting work is bringing cloud-native capabilities to do better integration of those systems of record, with better systems of engagement, that the cloud-native technology is offering. And we have some really interesting pieces under development now that will make that additional transformation straightforward. Our clients will be able to leverage that – and continue to extend that backend investment in those systems. So we’re really excited about the future.

Gardner: I’m afraid we’ll have to leave it there. You’ve been listening to a sponsored BriefingsDirect discussion on the latest on-ramps to secured agile cloud adoption for mainframe applications. And we’ve learned how a partnership between Unisys and Microsoft Azure allows many organizations to move their applications and data to a cloud model without degrading these vulnerable and essential systems of record.

So please join me in thanking our guests, Chuck Lefebvre, Senior Director of Product Management for ClearPath Forward at Unisys. Thank you so much, Chuck.

Lefebvre: Thank you.

Gardner: And a big thank you as well to Bob Ellsworth, Worldwide Director of Mainframe Transformation at Microsoft. Thank you, sir.

Ellsworth: Thank you.

Gardner: And a big thank you to our audience for joining this BriefingsDirect cloud computing adoption best practices discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of Unisys- and Microsoft-sponsored BriefingsDirect discussions.

Thanks again for listening. Please pass this along to your IT community, and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: Unisys and Microsoft.

A discussion on how many organizations face a reckoning to move mainframe applications to a cloud model without degrading the venerable and essential systems of record. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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Technical and Economic Incentives Mount Around Seeking Alternatives to Mainframe Applications

Transcript of the third in a series of sponsored BriefingsDirect podcasts on the rationale and strategies for application transformation.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Hewlett-Packard.

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Gain more insights into "Application Transformation: Getting to the Bottom Line" via a series of HP virtual conferences. For more on Application Transformation, and to get real time answers to your questions, register to access the virtual conferences for your region:

Access the Asia Pacific event.
Access the EMEA event.
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Dana Gardner: Hi, this is Dana Gardner, principal analyst at Interarbor Solutions, and you’re listening to BriefingsDirect.

Today, we present a sponsored podcast discussion on why it's time to exploit alternatives to mainframe computing applications and systems. As enterprises seek to cut their total IT costs, they need to examine alternatives to hard to change and manage legacy systems. There are a growing number of technical and economic incentives for modernizing and transforming applications and the data center infrastructure that support them.

Today, we'll examine some case studies that demonstrate how costs can be cut significantly, while productivity and agility are boosted by replacing aging systems with newer, more efficient standards-based architectures.

This podcast is the third and final episode in a series that examines "Application Transformation: Getting to the Bottom Line." The podcast, incidentally, runs in conjunction with a series of Hewlett-Packard (HP) webinars and virtual conferences on the same subject.

Access the Asia Pacific event. Access the EMEA event. Access the Americas event.

Here with us now to examine alternatives to mainframe computing, is John Pickett, Worldwide Mainframe Modernization Program manager at HP. Hello, John.

John Pickett: Hey, Dana. How are you?

Gardner: Good, thanks. We're also joined by Les Wilson, America's Mainframe Modernization director at HP. Welcome to the show, Les.

Les Wilson: Thank you very much, Dana. Hello.

Gardner: And, we're also joined by Paul Evans, Worldwide Marketing Lead on Applications Transformation at HP. Welcome back, Paul.

Paul Evans: Hello, Dana.

Gardner: Paul, let me start with you if you don't mind. We hear an awful lot about legacy modernization. We usually look at it from a technical perspective. But it appears to me that in many of the discussions I have with organizations is that they are looking for more strategic levels of benefit, to finding business agility and flexibility benefits. The technical and economic considerations, while important in the short-term, pale in comparison to some of the longer term and more strategic benefits.

Pushed to the top

Evans: Where we find ourselves now -- and it has been brought on by the economic situation -- is that it has just pushed to the top an issue that's been out there for a long time. We have seen organizations doing a lot with their infrastructure, consolidating it, virtualizing it, all the right things. At the same time, we know, and a lot of CIOs or IT directors listening to this broadcast will know, that the legacy applications environment has somewhat been ignored.

Now, with the pressure on cost, people are saying, We've got to do something, but what can come out of that and what is coming out of that?" People are looking at this and saying, "We need to accomplish two things. We need a longer term strategy. We need an operational plan that fits into that, supported by our annual budget."

Foremost is this desire to get away from this ridiculous backlog of application changes, to get more agility into the system, and to get these core applications, which are the ones that provide the differentiation and the innovation for organizations, able to communicate with a far more mobile workforce.

At an event last week in America, a customer came up to me and said, "Seventy percent of our applications are batch running on a mainframe. How do I go to a line-of-business manager and say that I can connect that to a guy out there with a smartphone? How do I do that?" Today, it looks like an impossible gap to get across.

What people have to look at is where we're going strategically with our technology and our business alignment. At the same time, how can we have a short-term plan that starts delivering on some of the real benefits that people can get out there?

Gardner: In the first two parts of our series, we looked at several case studies that showed some remarkable return on investment (ROI). So, this is not just a nice to have strategic maturity process, but really pays dividends financially, and then has that longer term strategic roll-out.

Evans: Absolutely. These things have got to pay for themselves. An analyst last week, looked me in the face and said, "People want to get off the mainframe. They understand now that the costs associated with it are just not supportable and are not necessary."

One of the sessions you will hear in the virtual conference will be from Geoffrey Moore, where he talks about this whole difference between core applications and context -- context being applications that are there for productivity reasons, not for innovation or differentiation.

Lowest-cost platform

With a productivity application you want to get delivery on the lowest-cost platform you possibly can. The problem is that 20 or 30 years ago, people put everything on the mainframe. They wrote it all in code. Therefore, the challenge now is, what do you not need in code that can be in a package? What do you not need on the mainframe that could be running on a much more lower cost infrastructure or a completely different means of delivery, such as software as a service (SaaS).

The point is that there are demonstrably much less expensive ways of delivering these things. People have to just lift their heads up and look around, come and talk to us, and listen to the series and they will begin to see people who have done this before, and who have demonstrated that it works, as well as some of the amazing financial rewards that can be generated from this sort of work.

Gardner: John Pickett, let's go to you. We've talked about this, but I think showing it is always more impressive. The case studies that demonstrate the real-world returns tend to be the real education points. Could you share with us some of the case studies that you will be looking at during the upcoming virtual conference and walk us through how the alternative to mainframe process works?

Pickett: Sure, Dana. As Paul indicated, it's not really just about the overall cost, but it's about agility and being able to leverage the existing skills as well.

One of the case studies that I will go over is from the National Agricultural Cooperative Federation (NACF). It's a mouthful, but take a look at the number of banks that the NACF has. It has 5,500 branches and regional offices, so essentially it's one of the largest banks in Korea.

One of the items that they were struggling with was how to overcome some of the technology and performance limitations of the platform that they had. Certainly, in the banking environment, high availability and making sure that the applications and the services are running were absolutely key.

At the same time, they also knew that the path to the future was going to be through the IT systems that they had and they were managing. What they ended up doing was modernizing their overall environment, essentially moving their core banking structure from their current mainframe environment to a system running HP-UX. It included the customer and account information. They were able to integrate that with the sales and support piece, so they had more of a 360 degree view of the customer.

We talk about reducing costs. In this particular example, they were able to save $40 million on an annual basis. That's nice, and certainly saving that much money is significant, but, at the same time, they were able to improve their system response time two- to three-fold. So, it was a better response for the users.

But, from a business perspective, they were able to reduce their time to market. For developing a new product or service, that they were able to decrease that time from one month to five days.

Makes you more agile

If you are a bank and now you can produce a service much faster than your competition, that certainly makes it a lot easier and makes you a lot more agile. So, the agility is not just for the data center, it's for the business as well.

To take this story just a little bit further, they saw that in addition to the savings I just mentioned, they were able to triple the capacity of the systems in their environment. So, it's not only running faster and being able to have more capacity so you are set for the future, but you are also able to roll out business services a whole lot quicker than you were previously.

Gardner: I imagine that with many of these mainframe systems, particularly in a banking environment, they could be 15 or 20 years old. The requirements back then were dramatically different. If the world had not changed in 20 years, these systems might be up to snuff, but the world has changed dramatically. Look at the change we have seen in just the last nine months. Is that what we are facing here? We have a general set of different requirements around these types of applications.

Pickett: There are a couple of things, Dana. It's not only different requirements, but it's also being driven by a couple of different factors. Paul mentioned the cost and being able to be more efficient in today's economy. Any data center manager or CIO is challenged by that today. Given the high cost of legacy and mainframe environment, there's a significant amount of money to be saved.

It's not a one-size-fits-all. It's identifying the right choice for the application, and the right platform for the application as well.

Another example of what we were just talking about is that, if we shift to Europe, Middle East, and Africa region, there is very large insurance company in Spain. It ended up modernizing 14,000 million instructions per second (MIPS). Even though the applications had been developed over a number of years and decades, they were able to make the transition in a relatively short length of time. In a three- to six-month time frame they were able to move that forward.

With that, they saw a 2x increase in their batch performance. It's recognized as one of the largest batch re-hosts that are out there. It's just not an HP thing. They worked with Oracle on that as well to be able to drive Oracle 11g within the environment.

So, it's taking the old, but also integrating with the new. It's not a one-size-fits-all. It's identifying the right choice for the application, and the right platform for the application as well.

Gardner: So, this isn't a matter of swapping out hardware and getting a cheaper fit that way. This is looking at the entire process, the context of the applications, the extended process and architectural requirements in the future, and then looking at how to make the transition, the all important migration aspect.

Pickett: Yes. As we heard last week at a conference that both Paul and I were at, if all you're looking to do is to take your application and put it on to a newer, shinier box, then you are missing something.

Gardner: Let's go now to Les Wilson. Les, tell us a little bit about some studies that have been done and some of the newer insights into the incentives as to why the timing now for moving off of mainframes is so right.

Customer cases

Wilson: Thanks, Dana. I spend virtually every day talking directly to customers and to HP account teams on the subject of modernizing mainframes, and I'll be talking in detail about two particular customer case studies during the webinar.

Before I get into those details though, I want to preface my remarks by giving you some higher level views of what I see happening in the Americas. First of all, the team here is enjoying an unprecedented demand for our services from the customer base. It's up by a factor of 2 over 2008, and I think that some of the concepts that John and Paul have discussed around the reasons for that are very clear.

There's another point about HP's capabilities, as well, that makes us a very attractive partner for mainframe modernization solutions. Following the acquisition of EDS, we are really able to provide a one-stop shop for all of the services that any mainframe customer could require.

That includes anything from optimization of code, refactoring of code on the mainframe itself, all the way through re-hosting, migration, and transformation services. We've positioned ourselves as definitely the alternative to IBM mainframe customers.

In terms of customer situations, we've always had a very active business working with organizations in manufacturing, retail, and communications. One thing that I've perceived in the last year specifically -- it will come as no surprise to you -- is that financial institutions, and some of the largest ones in the world, are now approaching HP with questions about the commitment they have to their mainframe environments.

We're seeing a tremendous amount of interest from some of the largest banks in the United States, insurance companies, and benefits management organizations, in particular.

Second, maybe benefiting from some of the stimulus funds, a large number of government departments are approaching us as well. We've been very excited by customer interest in financial services and public sector. I just wanted to give you that by way of context.

In terms of the detailed case studies, when John Pickett first asked me to participate in the webinar, as well as in this particular recording, I was kind of struck with a plethora of choices. I thought, "Which case study should I choose that best represents some of the business that we are doing today?" So, I've picked two.

The first is a project we recently completed at a wood and paper products company. This is a worldwide concern. In this particular instance we worked with their Americas division on a re-hosting project of applications that are written in the Software AG environment. I hope that many of the listeners will be familiar with the database ADABAS and the language, Natural. These applications were written some years ago, utilizing those Software AG tools.

Demand was lowered

They had divested one of the major divisions within the company, and that meant that the demand for mainframe services was dramatically lowered. So, they chose to take the residual applications, the Software AG applications, representing about 300-350 MIPS, and migrate those in their current state, away from the mainframe, to an HP platform.

Many folks listening to this will understand that the Software AG environment can either be transformed and rewritten to run, say, in an Oracle or a Java environment, or we can maintain the customer's investment in the applications and simply migrate the ADABAS and Natural, almost as they are, from the mainframe to an alternative HP infrastructure. The latter is what we did.

By not needing to touch the mainframe code or the business rules, we were able to complete this project in a period of six months, from beginning to end. They are saving over $1 million today in avoiding the large costs associated with mainframe software, as well as maintenance and depreciation on the mainframe environment.

They're very, very pleased with the work that's being done. Indeed, we're now looking at an additional two applications in other parts of their business with the aim of re-hosting those applications as well.

They are saving over $1 million today in avoiding the large costs associated with mainframe software, as well as maintenance and depreciation on the mainframe environment.

The more monolithic approach to applications development and maintenance on the mainframe is a model that was probably appropriate in the days of the large conglomerates, where we saw a lot of companies trying to centralize all of that processing in large data centers. This consolidation made a lot of sense, when folks were looking for economies of scale in the mainframe world.

Today, we're seeing customers driving for that degree of agility you have just mentioned. In fact, my second case study represents that concept in spades. This is a large multinational manufacturing concern. They never allow their name to be used in these webcasts, so we will just refer to them as "a manufacturing company." They have a large number of businesses in their portfolio.

Our particular customer in this case study is the manufacturer of electronic appliances. One of the driving factors for their mainframe migration was precisely what you just said, Dana, that the ability to divest themselves from the large mainframe corporate environment, where most of the processing had been done for the last 20 years.

They wanted control of their own destiny to a certain extent, and they also wanted to prepare themselves for potential investment, divestment, and acquisition, just to make sure that they were masters of their own future.

Gardner: You mentioned earlier, John, about a two-times increase in the demand since 2008. I wonder if this demand increase is a blip. Is this something that is just temporary, or has the economy -- and some people call it the reset economy, actually changed the game -- and therefore IT needs to respond to that?

In a nutshell the question is whether this is going to be a two-year process, or are we changing the dynamic of IT and how business and IT need to come together in general?

Not a blip

Pickett: First, Dana, it's not a blip at all. We're seeing increased movement from mainframe over to HP systems, whether it's on an HP-UX platform or a Windows Server or SQL platform. Certainly, it's not a blip at all.

As a matter of fact, just within the past week, there was a survey by AFCOM, a group that represents data-center workers. It indicated that, over the next two years, 46 percent of the mainframe users said that they're considering replacing one or more of their mainframes.

Now, let that sink in -- 46 percent say they are going to be replacing high-end systems over the next two years. That's an absurdly high number. So, it certainly points to a trend that we are seeing in that particular environment -- not a blip at all.

Dana, that also points to the skills piece. A lot of times when we talk to people in a mainframe environment the question is, "I've got a mainframe, but what about the mainframe people that I have? They're good people, they know the process, and they have been around for a while." We found that HP, and moving to an HP centralized environment is really a soft landing for these people.

They can use the process skills that they have developed over time. They're absolutely the best at what they do in the process environment, but it doesn’t have to be tied to the legacy platform that they have been working on for the last 10 or 20 years.

We've found that there is a very strong migration for those skills and landing in a place where they can use and develop them for years to come.

We've found that you can take those same processes and apply them to a large HP Integrity Superdome environment, or NonStop environment. We've found that there is a very strong migration for those skills and landing in a place where they can use and develop them for years to come.

Gardner: Les, why do you see this as a longer term trend, and what are the technological changes that we can expect that will make this even more enticing, that is to say, lower cost, more efficient, and higher throughput systems that allow for the agility to take place as well?

Wilson: Good question, Dana, and you have two parts to it. Let me address the first one about the trend. I've been involved in this kind of business on and off since 1992. We have numbers going back to the late 1980s as to the fact that at that time there were over 50,000 mainframes installed worldwide.

When I next got into this business in 2004, the analyst firms confirmed that the number was now around 15,000-16,000. Just this week, we have had information, confirmed by another analyst, that the number of installed mainframes is now at about 10,400. We've seen a 15-20 year trend away from the mainframe, and that will continue, given this unprecedented level of interest we are seeing right now.

You talked about technology trends. Absolutely. Five years ago, it would have been fair to say that there were still mainframe environments and applications that could not be replaced by their open-system equivalents. Today, I don't think that that's true at all.

Airline reservation system

To give you an example, HP, in cooperation with American Airlines, has just announced that we're going to be embarking on a three-year transition of all of the TPF-based airline reservation systems that we HP has been providing as services to customers for 20 years.

That TPF environment will be re-engineered in its entirety over the course of the next three years to provide those same and enhanced airline reservation systems to customers on a Microsoft-HP bladed environment.

That's an unprecedented change in what was always seen as a mainframe centric application, airlines reservations, with the number of throughputs and the amount of transactions that need to be done every second. When these kinds of applications can be transformed to open systems' platforms, it's open season on any mainframe application.

Furthermore, the trend in terms of open-systems price performance improvement continues at 30-35 percent per annum. You just need to look at the latest Intel processors, whether they be x86 or Itanium-based, to see that. That price performance trend is huge in the open systems market.

I've been tracking what's been going on in the IBM System Z arena, and since there are no other competitors in this market, we see nothing more than 15 percent, maybe 18 percent, per annum price performance improvement. As time goes on, HP and industry standard platforms continue, and will continue, to outpace the mainframe technology. So, this trend is bound to happen.

People have to take considered opinions. Investments here are huge. The importance of legacy systems is second to none.

Gardner: Paul, we've heard quite a bit of compelling information. Tell us about the upcoming conference, and perhaps steps that folks can take to get more information or even get started as they consider their alternatives to mainframes?

Evans: Based on what you've heard from John and Les, there is clearly an interest out there in terms of understanding. I don't think this is, as they say in America, a slam dunk. The usual statement is, "How do you eat an elephant? and the answer is, "One bite at a time."

The point here is that this is not going to happen overnight. People have to take considered opinions. Investments here are huge. The importance of legacy systems is second to none. All that means that the things that John and Les are talking about are going to happen strategically over a long time. But, we have people coming to us every day saying, "Please, can you help me understand how do I start, where do I go, where do I go now, or where do I go next week, next year, or next month?

The reason behind the conference was to take a sort of multi-sided view of this. One side is the business requirement, which people like Geoffrey Moore will be talking about -- where the business is going and what does it need.

We'll be looking at a customer case study from the Italian Ministry of Education, looking at how they used multiple modernization strategies to fix their needs. We'll be looking at tools we developed, so that people can understand what the code is doing. We'll be hearing from Les, John, and customers -- Barclays Bank in London -- about what they have been doing and the results they have been getting.

Then, at the very end, we'll be hearing from Dale Vecchio, vice president of Gartner research, about what he believes is really going on.

Efficiency engine

The thing that underpins this is that the business requirement several decades ago drove the introduction of the mainframe. People needed an efficiency engine for doing payroll, human resources, whatever it may be, moving data around. The mainframe was invented and was built perfectly. It was an efficiency engine.

As time has gone on, people look at technology now to become an effectiveness engine. We've seen the blending of technologies between mainframes, PCs, and midrange systems. People now take this whole efficiency thing for granted. No one runs their own payroll, even to the point that people now look to BPOs or those sorts of things.

As we go forward, with people being highly mobile, with mobile devices dramatically exploding all over the place in terms of smartphones, Net PCs, or whatever, people are looking to blend technologies that will deliver both the efficiency and the effectiveness, but also the innovation. Technology is now the strategic asset that people will use going forward. There needs to be a technological response to that.

Over the last year or two, either John or Les referred to the enormous amounts of raw power we can now get from, say, an Intel microprocessor. What we want to do is harness that power and give people the ability to innovate and differentiate, but, at the same time, run those context applications that keep their companies alive.

That's really what we're doing with the conference -- demonstrating, in real terms, how we can get this technology to the bottom-line and how we can exploit it going forward.

Gardner: Well, great. We've been hearing about some case studies that demonstrate how costs can be cut significantly, while productivity and agility are boosted.

I want to thank our guests in today’s discussion. We've been joined by John Pickett, Worldwide Mainframe Modernization Program manager. Thank you, John.

Pickett: Thank you, Dana.

Gardner: We've also been joined by Les Wilson, America’s Mainframe Modernization director. Thank you, Les.

Wilson: Thank you for the opportunity, Dana.

Gardner: And also Paul Evans, worldwide marketing lead on Applications Transformation at HP. Thanks again Paul.

Evans: It's a pleasure.

Gardner: This is Dana Gardner, principal analyst at Interarbor Solutions. You have been listening to a sponsored BriefingsDirect podcast. Thanks for listening, and come back next time.

Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Hewlett-Packard.

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Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Learn more. Sponsor: Hewlett-Packard.


Transcript of the third in a series of sponsored BriefingsDirect podcasts on the rationale and strategies for application transformation. Copyright Interarbor Solutions, LLC, 2005-2009. All rights reserved.