Mainframe vs Cloud: 5 Reasons why Retirement Plan Industry should move to Cloud

The retirement plans industry wants to grow breaking all barriers, but needs the technology backing to be able to scale up fast, in a stable manner, without disrupting services and without having to invest heavily in IT infrastructure. Cloud can be that enabler as it is agile, scalable, robust and can talk to multiple systems using API technologies.

Five advantages of getting on the cloud:

  1. Cost of infrastructure slashed: Straight away, we can say cloud can provide a cost advantage. According to our estimates, for a large mainframe of more than 11,000 MIPS, the average annual cost per installed MIPS is about $2-3 million annually, conservatively. For a mid-sized mainframe, it would be about 3000 to 5000 MIPS, taking the average annual costs to around $1-2 million annually. And this is just for the hardware. Software cost would be over and above that. By moving to cloud, the cost of infrastructure reduces by almost to one fourth. Plus, cloud has redundancy and disaster management built in.
  2. Scaling up, no problem: As the business expands, the need for additional storage also increases. In Mainframe, it means adding a client. And sometimes, a new server to connect the client if the existing one is already at optimum use. A new Mainframe will become viable only if it has optimum number of clients, so the business has to support proportionally. This not only means cost, but also a time delay. On cloud, the cost of expansion is just one eighth the cost in Mainframe and happens instantaneously. Also, the storage and processing costs of cloud keeps reducing and the availability is always on the increase.
  3. Cloud is inclusive: Mainframe has been designed for old world business strategies and allows for vertical scaling while cloud enables quick horizontal scaling as well. Cloud can enable automatic restructuring of monolithic mainframe applications to agile cloud-native applications. The applications can be scaled up and scaled back to optimize the use of compute resources, thus ensuring elasticity, availability and cost optimization. The current generation of web and mobile application possesses easy to use interface that make configuring and consuming very easy.
  4. Processing at your fingertips: This ability to optimize resources at will also help meet unexpected increase in processing needs and completing them within the same working day using parallel processing in multiple cloud systems. Cloud also allows for synchronizing and validating data across the systems to ensure data integrity.
  5. Last Mile Connectivity: Mainframe requires plan sponsors to use a leased line. For cloud, Wi-Fi connectivity is enough, yet another factor in lowering costs. Mainframe applications can only be accessed by special terminals, whereas an application hosted in cloud can be accessed from anywhere, giving you a great flexibility at the working place.

The world is increasingly moving to cloud/web based technology resulting in the availability of skilled manpower and tools. This makes new feature releases for products easier and faster. As investment in mainframe application is higher, it is difficult to move away from the application if things do not work out, resulting in vendor lock-in.

Moving to cloud without losing investment in current Mainframe systems is not an easy decision to make. An experienced partner like Congruent, with domain knowledge and technical expertise, can help you protect your investments as they gradually modernize applications using the Strangler Pattern.

Stay tuned. Our next blog is on how the Retirement Plan industry can make the shift to Cloud.


Date Published: December 18, 2019

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