Rising cloud spending may not signal the end of traditional infrastructure

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As cloud investment continues to rise, it’s fair to ask if traditional infrastructure has hit its shelf life. 

There’s been a mass exodus of mainframe talent from the workforce due to IT professionals aging out, coupled with new generations of entry-level talent raised on an app-based, cloud-driven culture. It’s time to put the old technology out to pasture and commit to a cloud future, right? 

For some of us, this is an all too common refrain. In the 1980s, Sun Microsystems was going to be the death of the mainframe. PCs and client/server computing would also reportedly be the demise of the mainframe, if not in the 90s then in the early 2000s. 

But yet, here we are. While cloud investments have been increasing year-over-year for a decade and investment in data center systems will continue to grow in 2023 by a projected 4.7 percent, according to Gartner, the mainframe lives on.

The continued growth in cloud services reflects organizations’ appetite to have greater command of their data. The addition of cloud resources to augment existing systems — rather than replace them altogether — marries cloud with traditional infrastructure for a more hybrid approach.

Data management challenges ensure the mainframe won’t die 

The biggest challenge facing large businesses is how to get the most value out of their data as it becomes ever more sprawled across multiple systems, as well as in a hybrid cloud environment. Ensuring that data is accessible and secure across multiple environments — legacy, on-premises, and data center applications running in the cloud — is an increasing headache. 

For these companies, large on-prem systems are still the glue to mission-critical applications and processes. But the cloud holds tremendous value. Organizations leverage cloud technologies for analytics and other functions, and it’s critical that they are able to integrate them. Doing so securely, seamlessly and with simplicity, while remaining compliant, can be a daunting task. 

In a survey of respondents using mainframe technology, 80% of IT professionals said mainframe technology remains critical to business operations. Enterprise organizations have layer upon layer of technology that has accumulated over time, in an intricate web of applications and processes that support their business.

Enterprises must marry the innovations and tools of today’s world with legacy technology. Ripping and replacing existing technology is disruptive to business, putting a drain on both employee and financial resources — neither of which are in great supply. 

As enterprises struggle with this new reality, VC-funded startups and smaller companies may think this hybrid approach to infrastructure has no impact on them. 

They would be wrong. 

Opportunities of hybrid environments  

Venture-backed startups are likely never going to have an IBM mainframe. That may come along in a later growth phase as a company grows — but this hybrid approach presents an opportunity. 

Any startup writing an enterprise solution running in the cloud must anticipate the value of that application to their largest customers. So, even if an organization doesn’t use traditional infrastructure, they need to be able to speak the language of the enterprise. This includes facing legacy challenges, modernization and cost challenges associated with creating a hybrid cloud environment where cloud and legacy infrastructure live in harmony. 

Instead, these cloud-native companies can take a page from the “embrace and extend” playbook, finding ways to welcome the data and integrations of on-premise critical systems into their ecosystems. These hybrid environments are decades from disappearing, and those vendors who can tap the tremendous value baked into the data, processes, and efficiencies of \existing systems will be best positioned to capture enterprise markets. 

I had the opportunity recently to speak with a startup that had created a payments app for the restaurant industry, a terrific concept with founders that really understand the financial side of the restaurant industry. What they didn’t understand, however, was the technology. Most restaurants are still reliant on old-school ERP systems.

It’s not just restaurants, either. Dental and medical offices, distributors, and financial services: All are broadly dependent on legacy systems, whether it’s enterprise resource planning (ERP) or customer relationship management (CRM). Startups need experts that sis in between the new and old worlds and can translate both. Modern-world APIs are a wonder — but not if they don’t integrate with older legacy systems. 

Founders that don’t understand these systems will dazzle in their promise but fail to deliver against real market needs. 

Will the day come when traditional infrastructure meets its demise? Never say never, but it will be a long time before cloud technology fully replaces traditional infrastructure. Enterprise organizations will continue to embrace the cloud and the benefits it enables but remain reliant on the core systems that have run their businesses — and that will continue to have far-reaching ramifications across the technology industry. 

Chris Wey is President of the Power Systems Business Unit at Rocket Software 


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