Mainframe Migrations Follow Different Routes

NYSE unit moves quickly toward Unix; Reader's Digest takes outsourcing path

Francis Feldman recalled last week that as he got closer to choosing a vendor to help his company with a mainframe-to-Unix migration, he was worried. But the IT manager said that after “a sleepless week, where I was trying to figure out where to turn,” he came up with an idea to help him make his decision.

Feldman, vice president of the shared data center at Securities Industry Automation Corp. (SIAC) in New York, made surprise calls to the the vendors being considered for the migration project. He told the president of Clerity Solutions Inc., one of the vendors, that he was going to send the company some coding work and then fly to its Phoenix development center within 24 hours to examine the end results.

Some of the other vendors balked at such tests, Feldman said. But Clerity completed the work and was hired.

That taught Feldman a lesson about dealing with prospective migration vendors. “Don’t be afraid to challenge them with a final test,” he said. “And that test should [make them] stand on the merits of what they have told you so far. If they told you that they can migrate so much code or so many screens in a certain time frame, put them to the test.”

Nick Sementilli, vice president of global technology operations at The Reader’s Digest Association Inc. in Pleasantville, N.Y., is also involved in a mainframe migration process. But he has taken an entirely different approach by outsourcing his mainframe to Infocrossing Inc. under a contract that was signed in 2004 and recently extended by three years to 2012.

SIAC’s migration is moving ahead on a fixed schedule and is due to be completed by the fourth quarter. For Reader’s Digest, the migration could last five more years, according to Sementilli, who has stopped developing new applications for the mainframe and plans to gradually port existing applications to Unix.

SIAC, a subsidiary of NYSE Group Inc. that runs the systems for the New York Stock Exchange, is migrating to IBM servers running AIX. Feldman said the 1,650-MIPS mainframe that SIAC is moving off of processes data after trades are completed and generates reports for NYSE member companies. It also gathers data for regulatory purposes.

Feldman didn’t disclose specific savings goals but said he expects the move to Unix systems to cut the costs of running the applications on the mainframe in half. He considered outsourcing the mainframe but said he also expects to gain business advantages through increased integration of the systems once the migration is completed.

Reader’s Digest is mostly switching to Solaris-based systems from Sun Microsystems Inc., along with some AIX-based machines. Sementilli said he had concerns about outsourcing the mainframe, partly because that was the only system involved. As a result, he wanted to seek out a small vendor instead of going to a large IT services firm.

Infocrossing bills the publishing company based on usage metrics, such as the amount of disk space consumed and tape cartridges needed. Sementilli said Reader’s Digest has cut costs by managing the data on the mainframe more efficiently. He added that the variable cost structure created an incentive “to look at our resources and see what we really needed.”

“Once you’re paying by the drink, every sip matters,” said Peter Allen, managing director of Technology Partners International Inc., an outsourcing consultancy in The Woodlands, Texas. Allen said some CIOs are using variable cost models to control internal expenses through chargebacks.

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