Episode #4: Key considerations when migrating mainframe workloads to Microsoft Azure

Rob [: 00:00:00

Good morning, afternoon, or evening. Thanks for joining us for today's roundtable session. I'm your host, Rob Anderson. We're joined by a handful of accomplished experts in the legacy modernization space. First, Tim Jones, Managing Director of Application Modernization at Advanced. Scott Spiro, Worldwide Director, and Specialist of Mainframe Transformation at Microsoft. John Regan, Head of European Sales Engineering at Advanced. And Barry Wardell Worldwide Mainframe Modernization Strategist at Microsoft.

Microsoft and Advanced have had a rich history of success in the legacy modernization space that dated back decades. As a gold partner, Advanced offers an unmatched breadth of solutions and depth of expertise that ensures successful modernization to Microsoft Azure. And this has never been more important. Since the outbreak of the pandemic, the pace of legacy modernization has increased at a staggering rate. And we've seen quite a bit of change in the space from our perspective. Tim let's start with you. How does this partnership benefit companies looking to modernize, particularly in the situation that we're looking at today?

Tim [: 00:01:13

Well, thanks, Rob. And I mean, that's a really good question. I guess let's start by saying that in Advanced we've been helping organizations to modernize for more than 35 years at this point. So, we've got a huge amount of experience in taking people's legacy or heritage applications and if you like, making them current and relevance in a modern I.T. landscape. And we all know the significant benefits in moving from mainframe monolithic applications to a modern language and architecture that then sits in the cloud, as you rightly say, you know, that's accelerated following what we've just been through with the pandemic. So, you've got the obvious things like cost reduction, addressing the skills shortage, platform consolidation. But of course, you've then got the benefits of adopting cloud in terms of being able to really scale that out for the future. And I know, of course that's a key topic for us today. But from my point of view, I guess I'd say the biggest consideration that organizations have going into a large modernization program is the perceived risk of getting from where they are now to cloud in the first place. And I guess that if it was a simple task, it would be a no brainer. Everybody would have done it two, three, four or five years ago. But I guess the reality is that these mainframe applications sit at the heart of an organization's business, be that private sector in a commercial context, or whether it's public sector that's providing benefits, payments to citizens or healthcare, I guess to really individuals, real people. And it's got to be recognized that the systems that we move are both big and complex, and they've been in place for 20, 30, 40 years. And organizations need to know that when I start this program in modernization, all of those aspects and complexities need to be covered and most importantly, all the risks mitigated. So, for me, and probably the biggest consideration for any CIO about to embark on a project like this is that level of risk and managing that risk to really ensure a safe and predictable outcome. And so Advanced we've successfully completed more than 500 large scale modernization projects to this point. And of course, Microsoft. Microsoft has been a long-time strategic partner of ours, partnership spanning many years, and of course Microsoft, all the platform holders, both in terms of the cloud platform, but the technologies that we move people to as they move off that mainframe estate. And so, I guess together in terms of this partnership, it's really providing a single solution to really manage and mitigate the risks that a customer might perceive. So, I guess, Rob, that's probably been a long answer, but I guess this partnership really provides and it might sound cliche, but a safe pair of hands where we've got a long track record of working together, having completed many modernization projects together people.

Rob [: 00:04:17

Very well said. Safe pair of hands. Indeed. According to the 2021 Mainframe Modernization Business Barometer report, which is a survey and report that we publish every year, 78% of the respondents have started at least one modernization initiative in the past 12 months. And of those, 83 are looking to cloud environments such as Azure is their preferred modernization targets. This is a huge subject throughout I.T. and business in general, but particularly in the mainframe space. Barry, why are these organizations choosing Microsoft Azure?

Barry [: 00:04:54

And thanks for the question, Rob. It's a great one. I believe our customers are looking beyond just the qualities of Azure and they're looking at for depth and breadth of the Microsoft portfolio as they make their decision. And if you think about it, it makes sense. You have the Microsoft Azure cloud, which of course most people are familiar with, but you also have the dynamics. 365 cloud for business applications. You have Microsoft 365 for collaboration. You have the maturing industry clouds as well. And so, when you combine all these capabilities and really it represents a very robust set of tools and platforms that help our customers and throughout any path that they choose as they go through their conversation, whether that be for Greenfield path, new business logic or maybe it's a simpler, faster path and so migrate modernize. But specific to mainframe, I think that some of the qualities that our customers see or really are differentiators that our customers see are helping with that decision as well. So, security and compliance are clearly a huge area. Microsoft has 90 plus security frameworks covering industries, localities, regions, etc. and that means a lot because we all know that security in the mainframe landscape is super critical. Identity and access management is another reason why people are buyers. Customers are looking at Azure Identity and Access Management, and Azure alone has got over 550 million accounts. And if you think about if you combine that with what's on premise still it's a huge number. But more importantly, you've got a lot of maturity. You've got almost two decades or more of experience in terms of governance, policies and controls that are enabled by Active Directory. And so, as you think about the ability to modernize cloud ops data, new apps, etc., and the fact that you can wrap your own governance, your own controls, your own policies around those new services, that's really, powerful. I mentioned, you know, dynamics and collaboration. Those are important, especially for those customers who want to think about reinventing our business process and building smarter integrations and creating better user experiences. And those are capabilities that Microsoft has as well. And then, of course, hybrid cloud is a is another part that is a decision point for some customers wherein Microsoft can bring platforms to the mainframe within a customer's data center to support what could be an incremental monetization. And then as we do that, we're also bringing that Azure control planning to those data centers and we're providing the governance and security. And that is really, powerful. Option data are very critical, and you've got, you know, decades of investment in database technologies like sequel and other technologies that are becoming popular targets for mainframe. And then, of course, you know, very robust app development, like with Visual Studio, C-sharp, etc. All these things, I believe, combined with the entirety of the Microsoft portfolio really is the is driving decisions for many of our customers. I'll wrap this point by saying that it's partners like the Advanced team, who make all these things possible. And without the partners, none of this would happen. And Microsoft takes, you know, a good open and neutral approach. As we work with partners, we want to deliver unbiased guidance that is going to result in the best possible outcome for our customers. And so, the great partner network that we have allows us to do that.

Rob [: 00:08:58

Great. Thanks, Barry. You mentioned the platform options that a lot of folks that are looking at Modernizations have. And I know for new entrants into the mainframe and legacy modernization world, they come across this cognitive dissonance. Scott, a question for you. On the one hand, we have this modernization with infrastructure transformation as a top priority for many. And on the other hand, we also see major investments taking place to support mainframes in the ecosystems that they're in. Can you help us understand this duality and why it exists?

Scott [: 00:09:34

It's very dependent upon a customer's organization. And the modernizations, whether it's the infrastructure, whether it's the mainframe and the ecosystem that surrounds it, it's really driven by the business case. It's very dependent upon the customer requirements. You know, these the modernizations that we see take place, they can be a short-term modernization due to contractual obligations and avoidance. They could be 3-to-5-year modernizations. And this is specifically around the mainframe environment. It's really a question of what are the requirements, do we need to integrate with the mainframe, do we need to extend it, or do we need to modernize it? You know, in some cases. An example of extending is taking the information on the mainframe, the data, and extending that into Azure and utilizing that within a BI or analytics capacity. So, it's very dependent upon the business requirements of the customer, and that's what drives our conversations.

Rob [: 00:10:53

Well said. Thank you, Barry, back to you quick. When you speak with companies that are looking to modernize. How complete is their vision of the target environment? Do you see them wrestling with this question? And when do you think the choice of cloud provider happens? That's an important conversation as well.

Barry [: 00:11:15

Yeah. So, in terms of the vision for what you know, what the envision looks like, it's certainly mixed. Those shops that perhaps have a more mature strategic alignment between their business and technology, I think that there's generally a good vision of what that outcome, what that landing would look like. And then there are other customers who, you know entirely appreciate the complexity, the absolute necessity of the mainframe to their business, but don't necessarily understand how it works. And in those cases, that vision might be incomplete and the customer, you know, generally would need some help in terms of cloud selection. You know, that's also makes, too, for those more mature shops that have that are well on their way with cloud journey, you know, a lot of times they've made their decision. They might be reviewing multi-cloud options and you know, an additional hybrid cloud options and edge scenarios and things like that. But, you know, for those shops that are down the path of cloud journey, they're well informed of what the cloud capabilities are today for those customers who have not experimented or still have been still experimenting with cloud. You know, our approach is we like the opportunity to share with those customers what the capabilities are in the Microsoft Cloud. Right. And allow the customer to make an informed decision. But again, at the end of the day, that vision, that landing and even their selection of the cloud platform is mixed for our customers.

Rob [: 00:12:58

Yeah, I understand that completely. And from my perspective, it seems as though by the time we enter the conversation, that decision tends to be made. John. Similar question What's the primary driver that you're seeing regarding choice of cloud provider? When you cross the customers paths, I know that, you know, because of our role in modernizations, we tend to be a little bit further down the pathway when those conversations happen.

John [: 00:13:26

I echo what a lot of what Barry said there. Really, it does depend on where people are in their journey to the cloud and to their decision-making process. I'd say that most customers favor some kind of multi-cloud kind of approach and not put all their eggs in one basket. And I think, as Barry mentioned earlier, one of the key things for people is security. You know, when you put your apps out there in the cloud, the security of that cloud, that your confidence in its ability to be secure is a paramount concern, really. And obviously, that's where Microsoft scores very highly. I think being big business focused as well. So being business application focused is a big important factor.

Rob [: 00:14:14

Great. Thanks. Speaking of generally migrating to the cloud, moving workloads from the mainframe to the cloud was a bit of a late bloomer in the history and rise and dominance of the cloud. In other words, it's taken companies a lot longer to trust their business critical systems to their cloud providers. Scott, why do you think that is, and what do you believe finally tipped the scales? We've really seen a shift in the past 12 to 18 months.

Scott [: 00:14:46

I would agree, Rob. And, it might have started probably two years ago when we first two and a half years ago when we first started to see the transition. And the reason being is that the mainframe is that's the core systems. It's your core banking systems, your logistics, you’re merchandizing and warehouse. This is the system of record. And so, until customers became comfortable with the cloud for other workloads they were not going to move, they’re their core systems to the cloud. As Barry mentioned, we have over 90 certifications and attestations worldwide across geos and across industries. And it's taken time for our customers to become comfortable with the cloud as a target. It's something that we're seeing more and more customers or their mission critical applications. It's becoming a cloud first strategy for new development, but also for legacy applications rather than moving it to an on prem or to a private. Now they're trusting the public cloud for this, and it's given the fact that you can integrate with the Azure Control Plan, you can integrate with Azure Data Services, and you can now start to take advantage of the advanced services that Azure provides. That's really where the value of the customers is seeing these migrations. Yeah, the fact that you've got the poor systems traditionally have been siloed. Now they're exposed to a much greater ecosystem of applications, both internal but also being able to expose that information up and down the, for example, supply chain.

Rob [: 00:16:39

That makes sense. Thanks. So many of our survey respondents in the mainframe modernization report from this past year indicated that cost reduction was a large motivator for cloud migration, with many of them reporting up to 70% savings after their modernization project closes. I think anyone who's ever dealt with business can understand that cost reduction is a major motivator. But Barry, can you give us a sense of the size and scale of cost savings that someone can expect or at least wrap their head around when they're thinking of moving from the mainframe to Azure?

Barry [: 00:17:15

Due to like my earlier response. This is also an area of mixed results. But the good news here is that the results are very, very positive. So, we see typically a range of 50 to 85% of cost savings. News cost savings are going to be driven by the degree at which a customer desires to transform their landscape. So as an example, if a customer is running a large, complex mainframe with a critical business process and it turns out they want to potentially reinvent or greenfield or create cloud native applications to recreate those business processes in the cloud, that is when these customers will achieve a much higher degree of savings in the long run. And those are recurring savings right on the lower end, which still roughly 50% savings are reduction in operational expenses, which is still very, very significant, especially when you're talking about millions of dollars potentially a month and mainframe-oriented services still a big cost savings. And in most cases the transformation might be more incremental. It could be something like a migrate and modernize later. So, migrate as it is with no code changes. And then, of course, as you move up the needle in terms of degree of transformation, code modernization into business, logic changes. So, the pattern that our customers select or patterns, I should say that our customers select for modernization ultimately move the needle in terms of the cost savings. But to wrap it up, it's typically 50 to 85%. And then the great news again is that when that transformation is complete, those are recurring sustainable cost savings and those customers can go and reinvest those savings in whatever they choose.

Rob [: 00:19:20

Great. Thank you for that, Scott. When it comes to legacy modernization and cost reduction, let's set that aside for a second. What are some of the other go no go decision criteria for making the jump to modernize? And how has that evolved in the past, let's say, five years?

Scott [: 00:19:40

There are always the political considerations. So organizational change and such, that's been a constant over the past five years with respect to the pandemic and its influence. We've seen costs becoming more of a consideration. We've also seen staffing as rising in the past. We've seen costs, staffing issues. Agility and other drivers. As far as the modernization with respect to go no go decision. But with the changing demographics, the looming skills shortage we're seeing, staffing is coming up in terms of prioritization of drivers.

Rob [: 00:20:30

That makes sense. John, how about you? What are some of the more common pain points that you're seeing among modernization customers from your perspective? Have you seen a shift in those recently?

John [: 00:20:41

Rob [: 00:21:48

That makes sense. Thanks, John. Tim. Slightly different question. Have you seen customer preferences around approach to modernization change or solidify in the recent past? I know that the team here has talked a lot about, you know, every customer's journey is going to be different and there is often a combination of patterns that are being used. But is there is there a trend that you've seen? Is there a preference that you've seen amongst the customers that you've worked with as far as how they choose to move forward with their modernization?

Tim [: 00:22:27

Yeah, I think I think there is, Rob. And of course, we know that modernization is not a new thing. It's been going on for decades. And when we started in this business, we're moving people off legacy platforms be all over HP 3000 or Dec VAX to something new, which was probably Unix back in the day. And then of course, as time moved on, that was then Windows. So, I think for a long time we've been doing, to John's point, we've been doing lift and shift, which is predominantly driven by cost savings in moving from one platform to another. But then for sure, over time we've seen, I mean, just going back five years, people moved away from that lift and shift, and they wanted more value out of that modernization program. So, it wasn't just about the cost. We needed to change the legacy language from COBOL to shop, for instance, or from Visa to SQL Server. So, they get additional benefits and set that application up to enable it to be sustainable and maintainable as we go forward into the future. But then again, with the advent of cloud and as I think probably Scott said or Barry said, it's up last couple of years that it's become a reality. So, in all our conversations over the last three or four years, it's always been about we get to move away from the mainframe, we're going to get ourselves onto a new platform that is then cloud ready, and we've completed phase one on that journey. We've got the option to move into cloud later. And I think now that cloud has matured and people are accepting it generally across all organizations and business, then people are far more likely from all of our conversations to go in all the way through into cloud and really getting some of those additional benefits as well, not just cloud ready, but really getting into a cloud optimized state to allow people at a future date to move into cloud. Ready, a cloud native, and take advantage of containerization and all those things. So yeah, it's seen that shift.

Rob [: 00:24:35

Great. And Scott, from your perspective, you know, I know we walk hand in hand along this journey, but oftentimes Microsoft's conversations with folks around their patterns and strategies happens a little earlier than Advanced gets involved. What does this look like from your perspective? Has the preference to pattern changed in recent past?

Scott [: 00:24:58

I would say yes, in the past. Often, customers would choose to go down the path of re hosting because of the cost of the project. Timelines and skills were not as much of an issue. In the past couple of years, though, we're seeing that shift and more and more customers are choosing to modernize, to refactor, to convert the code to C# or Java, to move to more of a microservices architecture because of the fact that they in the past re hosting allowed for COBOL to space COBOL but with the again with addressing the skills issue, that's not as much of a viable option anymore. And customers really want to take advantage of what the cloud has to offer. So, we are seeing that shift.

Rob [: 00:25:57

That makes perfect sense. John. From a technologies perspective, setting the skills shortage aside for a moment from a platform's languages and databases perspective, are there any trends that you're seeing people migrate away from most and why do you think that is?

John [: 00:26:17

Yeah, definitely. So obviously we can migrate people for all kinds of legacy environments and never see legacy technologies, but that Broadcom have really, really done a good job in recruiting people to modernize with some of their pricing policies that they've introduced. So, we've seen a big, big, big increase in interest in migrating IDMS, Easytrieve, CA Gen all the that the CA Broadcom products. So that's a big trend and I think across the whole industry. So, who knows if they'll roll back on some of that a bit if too many people migrate off their products or whether they'll just put the prices up even more, who knows? But that's certainly a trend, a big trend now.

Rob [: 00:27:01

Good to know. Thanks, John. Barry, from Microsoft's perspective, have you seen a dominant language database or technical quandary drive modernizations more than others?

Barry [: 00:27:12

Yeah, I have. But it's no surprise. I mean, the most popular use cases are COBOL and modernize that into C#, Java and DB2 and to manage SQL and Azure those are very, very common pattern databases and languages. I mean of course you know; we encounter languages and there's specialized requirements across the spectrum. And I'll add here that one of the things that I'm seeing is. And going back to Scott's comment about, you know, rehosting, lifting, and shifting. Yeah, that's been a popular pattern. Yes, that still happens. Will happen, of course. But in terms of code modernization as the technology around that improves, it becomes more mature. The testing automation for the code modernization improves. We're seeing more. We're seeing customers give that a harder look and leaning into leaning towards a code modernization where in the past they may not have looked at that as hard. And then one other comment that we're seeing, certainly seeing more of in terms of patterns really is an extend approach. And I think that that is becoming a viable, viable option for many customers, especially to use that extended approach as part of an incremental modernization journey.

Rob [: 00:28:41

Interesting. Thanks for that. One of the questions that came in I think is interesting. And I think we as people who spend a lot of time in the modernization industry take for granted is visibility and experience. And if someone is navigating the uncharted waters of mainframe modernization for the very first time as experts in this space, what advice could you provide to the uninitiated? Tim let's start with you.

Tim [: 00:29:14

Okay. Well, thanks for letting me go first on that one then, Rob. I mean, you're right. You know, lots of organizations, for all the reasons that we've talked about, have reached the point where they've decided that they want to move away from the mainframe. They want to move platforms, move themselves into cloud as part of their strategy. But very few people in organizations have done something like this before. So, they're experts in their business. They're not experts in modernization and migration. And so, I guess that's where we come in. So, I would say talk to the experts who have done this before, really. And it's not all about one size fits all. So, we can work with people on disposition strategies to look at the options. So, is conversion refactor the right thing to do? Does it repost? Does it retire? Is it rewrite or a combination of those things? But I think yes, speak to people who've done it before, got the experience, seen the blockers and the way to overcome those sorts of things. And that's we at the box office and can help people.

Rob [: 00:30:25

Great. Thanks Tim. Barry. How about from your perspective, what would you say to the uninitiated?

Barry [: 00:30:31

Rob [: 00:31:09

Great. Thanks, John. How about you?

John [: 00:31:12

Rob [: 00:31:50

That's great advice. Thanks. And last but certainly not least, Scott, how do you feel? What would you say to the uninitiated.

Scott [: 00:31:58

I would echo all the other answers that have been provided. We've been doing this at Microsoft since 2009. And so, we've seen a lot of environments, a lot of strategies, a lot of businesses across vertical industries. And so, with that expertise, what we do is look to see where customers today, where do they want to be in one, three and five years, both from a business perspective as well as from a technology perspective. And this is where we come in and act as trusted advisers to provide guidance on that journey, because it is a journey and really, it's about what are you trying to achieve and what is the art of the possible. So, if you're looking to move to a microservices architecture containerized environment. We can provide guidance on that. And every customer may share a similar path. Customers may have multiple paths depending on the line of business, depending on the requirements. So that's where I approach everyone else. It's about the requirements that's driving it. And talk to the to your trusted advisers and talk to customers that have been on this journey.

Rob [: 00:33:14

Great advice, guys. Thank you. Now, I know we're running a couple of minutes over our allotted time. A few comments to close things out. First, thank you to our panelists today for getting involved. Second, for those of you who are watching and or listening, we would deeply suggest investigating the companies that you plan to partner with, look for demonstrated success, look for those proofs of success and experience, because it really is that trusted partner component that is going to reduce the risk and keep things on track because these are incredibly complicated projects. If they weren't, our industry wouldn't exist. We would not be sitting here having this conversation. Thanks again, everyone, for joining.