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Breaking Free of Capital Budget Constraints with Mainframe as a Service

Buying or upgrading a mainframe is a significant undertaking that many organizations put off for as long as possible. First and foremost, mainframe replacements or upgrades are enterprise-class IT investments that typically require a significant capital budget. In today’s economically-conscious atmosphere, where every single upgrade is meticulously scrutinized, government agencies and private enterprises are extremely cost sensitive to new capital investments. Secondly, mainframe systems, hardware and software are all historically very reliable. So much so that many organizations are willing to take the risk of delaying upgrades or new purchases for as long as possible.

Unfortunately, this puts many organizations behind the curve. Mainframes often serve as business or agency lifelines, running mission critical applications. If systems aren’t refreshed, they will struggle to keep pace with capacity demand and will inevitably face technology obsolescence. In doing so, they force organizations to fail the very customers or constituents their systems and applications are intended to serve.

Consider how the deployment of today’s mobile applications indirectly increases the demand for additional mainframe capacity. This is due to the fact that modern mobile transactions ultimately trigger backend business applications. For example, a government agency that develops a mobile application to enable citizens to apply for social benefits or inquire upon pending government services will absolutely require more mainframe capacity. Citizens using the application will likely generate mobile transactions 24x7, creating additional workloads on the government’s business systems. Without mainframe technology refreshes or upgrades, the data generated by the new mobile applications will eventually overburden the system and, potentially negatively affect its users.

Preserving Precious Capital while Expanding Capabilities
A Midwest government agency that serves as a service center to multiple state agencies and departments recently found itself facing a similar mainframe dilemma. The primary agency works on a fixed income for mainframe services, meaning they collect money from the treasury department, transportation, social services, etc. for the use of their mainframe and data center equipment. However, their mainframe equipment is aging and reaching capacity limits. They need new equipment on the ground to continue supporting all of the essential state applications running on their mainframe. Yet, as is the case for many agencies who rely on mainframes, there never seems to be enough capital budget to do any upgrades, and they are reluctant to lease equipment as it could potentially lock them into long-term ongoing expenses.

In this case, the agency was able to break free of its technology constraints using ViON’s Mainframe as a Service (MFaaS) offering. With ViON MFaaS, the agency would now preserve its Capital (CapEx) and move to an operational expenditure (OpEx) model, allowing them to upgrade their mainframe program.

ViON’s MFaaS delivers mainframe services via a monthly subscription model and works nicely for agencies that can’t come up with a large lump sum of cash to buy new equipment or manage upgrades – and who don’t want to lease equipment. In addition, while mainframe systems are quite reliable, newer mainframe systems have significantly better performance and more advanced functions. So, using MFaaS, applications with new capabilities can be deployed at significantly lower cost.

Making the Move to MFaaS
Mainframe software costs are notoriously high as they are historically tied to capacity and often account for 60 percent of the overall costs of running a mainframe, which can be a bitter pill to swallow for cash-strapped agencies. By making the move to MFaaS, organizations can also significantly lower their software licensing costs by capturing software savings that accrues by upgrading from an older series mainframe model to the next generation of hardware.

As newer mainframe models have roughly a 5 percent software pricing advantage over a one- generation older mainframe for the same level of system capacity. Organizations can expect to save at least five (5) percent in cumulative software costs when they upgrade their hardware. So, if an agency has an N-2 generation machine, then software will be about 10 percent less if they move to the current generation. If they have a mainframe that is three (3) generations old, then they can potentially save approximately 15 percent in software by upgrading to a newer machine.  By leveraging ViON’s MFaaS to upgrade an aging mainframe, an organization can realize capital budget constraint relief as well as reduce software licensing costs.

To learn more about ViON’s as-a-Service financial model please download ViON’s eBook “Cloud Strategy With Confidence”   to learn more about how your Mainframe can be modernized and optimized into an Opex financial Model.  Please contact us at info@vion.com or 571.353.6000.

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