Strategic Purchasing Decision Mainframe Hardware Refresh

The mainframe is an essential component of many IT infrastructures, often supporting critical core applications. Migrating away from the mainframe is either impossible or possible with significant personnel and financial resources; often leading to a high level of technology dependency. In addition, such a major infrastructure change involves unpredictable business risks, often resulting in vendor lock-in.

Every two to three years IBM launches a new generation of servers featuring either major or minor technical innovations compared to the previous version which can be upgraded to meet unforeseen growth requirements within the first few years. This can be achieved by adding additional hardware components (e.g. processors) to the mainframe or by further activating already installed components via microcode. After 3.5 to 4.5 years, new hardware cannot be added (“hardware withdrawal from marketing”), and thus activating components (“licensed internal code withdrawal from marketing”) is no longer possible around a year later.

Without being able to upgrade, it becomes impossible to react to unforeseen growth. In particular, the discontinuation of activating pre-installed processors indicates an artificial shortening of the lifespan of a server generation. This lack of upgradeability often causes uncertainty for the customers and raises questions regarding whether and/or when new hardware should be purchased.

The z16 hardware generation currently available on the market has already been available for over two years without there being any official information from IBM as to when the succeeding generation will be released. Moreover, the frequently used z15 will no longer be upgradeable via microcode at the end of this year, leading to customer uncertainty. For this reason, many companies are considering a hardware change, yet there are currently only two options available:

Although the problem outlined in this article is dedicated to the current z15/z16 solutions, it can in principle be applied to all other generations of mainframe computers. As the periods between availability and discontinuation of the update capability are usually similar, comparable situations arise with a certain regularity. The following solution approaches can therefore be considered both for the specific, current situation as well as on a general level.

Let’s consider the positive aspects first: There is no need for mainframe managers to panic. Even if the upgradeability of a generation is discontinued, this does not mean that security vulnerabilities will automatically arise. Maintenance and patches remain available for the foreseeable future, as these are only discontinued after the “end of service” date is reached, which is normally many years after. Additionally, with good capacity planning and for example the use of pre-paid OOCoD tokens, it will still be possible to respond dynamically to capacity peaks.

As a result, waiting for the new generation to become available and only then carry out a mainframe refresh is a valid strategy. This is also an attractive option from a cost perspective, as higher software savings can be achieved through technology discounts while at the same time hardware costs are optimised.

Nevertheless, it is advisable not to entirely rule out the procurement of the currently available z16 generation from the outset. Thanks to attractive offers from IBM, a replacement can mean economic advantages compared to continuing to operate on the current model, such as the z15 - it is therefore always necessary to consider the current standing both strategically and tactically to evaluate all scenarios. Only in this way can the most economically and operationally advantageous solution be identified.

Intero Consulting has many years of experience supporting all forms of IBM customers and manages IBM hardware negotiations in a wide variety of contexts. Together with our clients, we examine the implications of using the current IBM mainframe architecture and help develop long-term and sustainable strategies to optimise their standing and generate savings. We also support our clients both directly and indirectly in negotiations with IBM. Please contact us for an initial, non-binding consultation.