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Mainframe Users Look to Cloud for Agility, Cost Savings

Enterprises in the U.S. and Brazil are accelerating mainframe modernization and cloud migration for performance, scalability and ESG benefits, ISG Provider Lens™ report says

Enterprises in the U.S. and Brazil stepped up their modernization of mainframe applications and increased outsourcing of related capabilities last year, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2023 ISG Provider Lens™ Mainframes — Services and Solutions report for the U.S. – with additional coverage of Brazil – finds most organizations are steering their budgets toward investments that generate results in the near term, but nearly all recognize the importance of mainframe modernization.

“Companies are moving away from traditional mainframe infrastructure because the benefits of doing so are simply too great,” said John Schick, Americas leader, Mainframe Modernization and Optimization, for ISG. “All forms of modernization can simplify and improve operations while reducing costs.”

Mainframe trends are largely the same in the U.S. and Brazil, where most legacy systems are supported by IBM or Unisys, ISG says. Most enterprises are pursuing one of three major strategies to modernize their environments: re-platforming (running legacy applications in the cloud with emulators or compilers), rewriting (maintaining mainframe applications while converting them to new programming languages), or reengineering (extracting code requirements and using AI to write new code).

Mainframe migrations to the cloud have accelerated for several reasons, including performance gains, cost savings and the ability to standardize the process with DevOps and continuous integration tools. Integrating mainframe data into cloud-based data stores for access to analytics tools is a particularly fast-growing trend, the report says.

ESG (environmental, social and governance) objectives are driving some mainframe strategies, ISG says. Moving legacy applications to the cloud allows companies to use carbon-neutral data centers, and cloud-based operations can provide more flexibility to comply with data sovereignty, data loss prevention and access control regulations. Most enterprises do not have the documentation to prove compliance on their own mainframe infrastructure, the report says.

“Replicating a mainframe in multiple jurisdictions would be an extremely expensive compliance strategy,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “By contrast, all hyperscalers operate cloud data centers in diverse locations and are committed to meeting ESG targets by 2030.”

The report also explores other mainframe trends in the U.S. and Brazil, including the growing importance of automated application testing and the rising need for training of mainframe migration practitioners.

For more insights into the challenges enterprises face in mainframe modernization and advice on how to safely proceed, see the ISG Provider Lens™ Focal Points briefing here.

The 2023 ISG Provider Lens™ Mainframes — Services and Solutions report for the U.S. evaluates the capabilities of 56 providers across six quadrants – five of them focused solely on the U.S.: Mainframe Modernization Services; Mainframe Application Modernization and Transformation Services, U.S.; Mainframe as a Service (MFaaS); Mainframe Operations; and Mainframe Application Modernization Software. A sixth quadrant - Mainframe Application Modernization and Transformation Services, Brazil – focuses on Brazil.

The report names Capgemini, DXC Technology, Ensono, Infosys, Kyndryl, TCS and Wipro as Leaders in three quadrants each. It names Accenture and HCLTech as Leaders in two quadrants each. Advanced, Astadia, Avenade (Asysco), Atos, AWS, Cognizant, GFT, Google, Heirloom, LTIMindtree, Micro Focus, Mphasis, TmaxSoft and TSRI are named as Leaders in one quadrant each.

In addition, DXC Technology, FNTS, Hexaware and mLogica are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

Customized versions of the report are available from CPT Global, DXC Technology, Ensono, FreeSoft and Hexaware.

The 2023 ISG Provider Lens™ Mainframes — Services and Solutions report for the U.S. is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

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 automation, 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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