Tuesday April 5, 2022 was a great day to be part of the mainframe community.
As you may have seen on the wire, that was the day IBM “unveiled IBM® z16™, IBM’s next-generation system with an integrated on-chip AI accelerator—delivering latency-optimized inferencing. This innovation is designed to enable clients to analyze real-time transactions, at scale — for mission-critical workloads such as credit card, healthcare and financial transactions.”
As the CFO of DataKinetics, an independent software vendor providing Mainframe Data Performance & Optimization solutions to help customers get the best performance out of their investment in the mainframe, this is music to my ears. In finance, one of our key missions is to protect the future value of our assets. There are several criteria that I think are important in assessing future value for a business that operates as a going concern.
Are there happy customers?
You bet! One of the best tests of whether a product has true future value is if you can find a reference customer who is willing to talk about it. Ross Mauri, GM, IBM Systems, had Paul Mottola, Head of Strategy, Mainframe at JPMorgan Chase, on stage with him to talk about the value of the mainframe to the bank. He had a great analogy too, pulling out the Jesse James reference to talk about why bandits target banks; “that’s where the money is!”. Customers who need to provide a secure, robust environment to safeguard their sensitive data know the mainframe is the highly secured platform for running mission critical workloads.
Are companies making investments in the space?
Confirmed! This was a very exciting comment for me. Ross Mauri and his team during this event talked about a 10-year roadmap. How’s that for future value! A 5-year future value is always a confident prediction, since whenever a publicly traded company makes a large investment in technology, they are confirming there is multiyear future value as they need to be confident that if they are adding an asset to their balance sheet, and amortizing that over a 5-year period, that they won’t have to book an allowance to write that asset down. 10 years is much more meaningful – double digit territory. That’s means a lot to a numbers guy. A cynic may say talk is cheap -anyone can spin a yarn about a long-range roadmap – can you prove it with action? I agree – put your money where your mouth is. Indeed, that has happened. A key feature of the IBM z16 release was the “IBM Telum Processor, an industry-first integrated on-chip AI accelerator”, essential to deal with customers’ needs to have fast and predictive decision-making across business and operations to maximize revenue potential and deal with risks like fraud. IBM also announced in 2021 a “breakthrough in semiconductor design and process with the development of the world’s first chip announced with 2 nanometer (nm) nanosheet technology.” Investing dollars in new processors and chips is a great way to prove you believe in the future. And it’s not just IBM – DataKinetics and a whole slew of other companies in the mainframe ecosystem continue to ship new software products for the mainframe space to customers. If you had a very reliable recurring revenue stream which was profitable, but you did not believe in the future, there is a textbook answer for what a finance person would do – cash cow that business, and make it even more profitable, buy stopping your investments. Since leaders in this industry continue to invest in innovation, that demonstrates that the confidence in the net present value of the future revenue steam justifies the investment, beyond the hurdle rate. In other words, there is a good ROI with a rapid enough payback period. There’s a finance business case 101 refresher while we are at it!
Are companies hiring?
A quick search on Indeed.com alone for mainframe jobs in the USA reveals over 4000 opportunities! There are thousands more elsewhere. It’s a who’s who of the Fortune 500 on the company list: USAA, BNY Mellon, Bank of America, Citi, Anthem and more. Paul from JPMorgan Chase said in his chat with Ross that they are hiring IBM is hiring. Systems Integrators are hiring. Everyone knows that recruiting and investing in attracting and retaining talent takes time and money – it’s a major investment for most companies. The fact that so many recognizable names are making this investment proves they see the business case for the future. Speaking of hiring, wouldn’t it be great if Planet Mainframe had a careers section? With all these companies hiring mainframe talent, and since the readers of this site are mainframers, it feels like a logical fit.
Is there an ecosystem?
You probably noticed I mentioned above that Systems Integrators are hiring. That’s one of the best signs to me that there is a vibrant ecosystem. Large recognizable SI’s or consulting firms like Capgemini, EY, Deloitte & Tata are all hiring mainframe talent. I see several mention on their website that they have a center of excellence for the mainframe. Above and beyond the big names, there are also several independent software vendors in the mainframe space who continue to invest in making their customers successful. In addition, the mainframe ecosystem is global in nature, spanning North America, Latin America, Europe and ASEAN. I have heard customers say that a vibrant ecosystem is important to them as a form of risk mitigation – I look at it the same way when I am a buyer. It’s good to know that you have options down the road, just in case.
Is it sexy?
So, this is the criteria where maybe a lot of people who have been nodding along with the facts above say nope, this is old, legacy technology, so it’s not sexy. I say those people are wrong! The mainframe certainly has been around for a long time. According to the IBM archives, the “first general purpose automatic digital computer built by IBM dates back to 1944.” However, just because something has been around for a long time, does not mean it is obsolete, or not sexy. The Star Wars franchise has been around for a long time too. I remember being a kid in his single digits in 1977 when Star Wars came out (Episode IV: A New Hope for those who follow that naming convention!). It was incredible fun to watch Star Wars again with my kids when they were in their single digits, and even now that they are adults, guess what was on TV over the Christmas holidays – that’s right, Star Wars! Interestingly, DataKinetics was formed in 1977, the same year as Star Wars. To pick on that definition a bit more, I reached out to a trusted source. https://www.merriam-webster.com/dictionary/legacy. Webster defines legacy as “being a previous or outdated computer system”. I ask you this – is a modern technology with leading edge chips and investments onboard, processing billions of sensitive transactions for the Fortune 500, indicative of an outdated computer system? I think not!
In summary, recognizable customers are using the mainframe, and continuing to invest in it. Those customers view the mainframe as the trusted technology to help enable them to keep their customer’s data safe. We’re proud to be a trusted vendor that several of those companies use to get the most out of their investment in the mainframe. DataKinetics will be celebrating our 45th birthday in December
2022 – based upon these key criteria, I’m looking forward to us celebrating many more happy birthdays in the future.
Stay safe and well out there everyone.
Regular Planet Mainframe Blog Contributor
Randy McCoy is the CFO of DataKinetics – the global leader in Data Performance and Optimization. In his role, Randy regularly works with the C-level of Global Fortune 500 firms to provide insight into complex technologies and their operational impacts – leading to thriving, long-standing client and colleague relationships with mutually beneficial outcomes.