Financing

How to Completely Migrate From Your Mainframe to Windows With $0.00 Out-Of-Pocket Costs!

In the sub-500 MIPS mainframe world in which T3 lives, we hear many reasons why companies consider migrating off their mainframes. The most common ones are:

• to eliminate ridiculously high mainframe software costs
• to eliminate very high annual maintenance costs for mainframes and peripherals
• the lack of mainframe skills in the marketplace
• a desire to re-take their IT strategy from a single-source supplier
• a desire to enjoy the flexibility and agility that a .NET environment provides

But there’s one common reason why companies in the small to mid-sized mainframe space don’t actually take action and migrate. The reason we hear most often is the budget hit of having to pay for the migration costs and simultaneously continue to pay the mainframe costs during the migration process, which can typically take 6-18 months for users of this size mainframe. Especially in today’s difficult economic conditions, even the anticipated huge future cost savings of migrations cannot outweigh the hardship of paying this "double-dip" cost.

Companies and public agencies in this position should consider a leasing option. T3, for example, has teamed with several financial institutions that understand the technology in play and recognize that most companies and public sector agencies with mainframes are creditworthy customers. T3’s Liberty 2.0 mainframe migration solution is ideally suited for a leasing option since it includes all necessary hardware, software and services components; and it all comes from a single vendor.

Let’s examine a hypothetical example. County X has a small mainframe that costs nearly $500,000 a year (software and maintenance) to run several legacy applications. In a budget crunch year, they determine their mainframe costs are too high and seek options to eliminate it from their facility. T3 offers a turnkey proposal including all hardware, software, services, installation and 1 year of support for all components at just over $500,000 (providing a typical 12-13 month ROI). While this county has budgets approved for the $500,000 needed for their mainframe, they cannot find a way to pay the $500,000 needed for the migration cost.

In the example below, T3 structures a 36 month lease with one of our financial institutions that costs $193,000 per year with a $1.00 buyout at lease expiration. Best of all, lease payments do not begin until delivery, testing and cutover of the migrated solution is complete! No “double-dipping”! With the first monthly payment made on the lease for the migrated solution, the county reaps a savings of 61% which continues for 3 years! Then in month 37, the county pays $1.00 to purchase the asset from the lending institution and pays only maintenance and support costs of roughly $42,000 per year, an 84% savings compared to the original mainframe cost. And all of this was achieved without one extra dollar required from what had been budgeted for the mainframe!

Thanks to the foresight of these financial institutions, one very common reason for not migrating off the mainframe has been eliminated and the benefits of mainframe migration can be enjoyed by all!