With the long-anticipated Cobol skills shortage starting to bite, many businesses have been steadily migrating applications off the mainframe. Not BlueCross BlueShield of South Carolina; it's doubling down on Cobol.
The healthcare insurer processes nearly 10% of all healthcare claims in the U.S., and uses six top-of-the line IBM zEnterprise EC12 systems running millions of lines of optimized Cobol to process 19.4 billion online healthcare transactions annually. Its custom-built claims processing engine has been thoroughly modernized and kept up to date, says BCBS of SC vice president and chief technology officer Ravi Ravindra. "It was always in Cobol, and it always will be."
Cobol was designed to handle transactional workloads, and for large-scale transaction processing it still can't be beat, says Lonnie Emard, vice president of IT at BCBS of SC and president of the Consortium for Enterprise Systems Management (IT-oLogy), a nonprofit association of businesses, vendors and higher education institutions dedicated to helping build a talent pipeline for Cobol and other hard-to-fill IT-related disciplines.
"We are the low-cost provider," Emard says. "We couldn't do that if we weren't on the mainframe."
BlueCross BlueShield of South Carolina "We are the low-cost provider," says Lonnie Emard, vice president of IT, BlueCross BlueShield of South Carolina. "We couldn't do that if we weren't on the mainframe."
Some organizations continue to run the business using Cobol on the mainframe simply because migrating all of that code to distributed computing systems without a compelling business benefit wouldn't be worth the trouble and expense. But some of the world's largest businesses see their Cobol infrastructure not as fading legacy technology but as a state-of-the-art, competitive weapon.
For both groups, the challenge lies in finding the next generation of talent to run those systems or risk being forced off the platform. "There's been no abatement in the number of people retiring," says Adam Burden, lead for advanced technology and architecture at Accenture, and the pipeline of new Cobol programming talent has been insufficient to address the impending outflow of retiring baby boomers.
As businesses continue to struggle with the problem, Accenture has been busy adding Cobol programmers to its consulting practice to fill the skills gap for its clients, Burden says, even as IBM, IT-oLogy and others attempt to train and recruit the next generation.
The mainframe's stronghold
For many businesses in healthcare and other industries with large-scale transaction processing needs, including airlines, retail, banking and government, Cobol on the mainframe remains the core transaction engine. Several mainframe vendors remain in the market, including Unisys, Groupe Bull and Fujitsu, but IBM has the lion's share of the market today, with more than 90%. And 50 years after IBM released its first mainframe, the System/360, in April 1964, the company still has 3,500 mainframe customers.
Some 23 of the world's top 25 retailers, 92 of the top 100 banks, and the 10 largest insurers all entrust core operations to Cobol programs running on IBM mainframes, says Deon Newman, vice president, IBM System z. Since 2010, around 50 to 75 customers have left the mainframe fold, IBM says, while some 270 of IBM's 3,500 mainframe customers have come aboard as new clients since then, Newman says.
For these mainframe-centric businesses, the Cobol application suite that runs the heart of the business isn't going anywhere. "But they still need to deal with the declining Cobol workforce . . . to keep these systems viable for the next decade or two," says Dale Vecchio, research vice president at Gartner Inc.
As for the other 90% of businesses running mainframes today, Vecchio thinks the Cobol brain drain will be the catalyst for more extensive migrations off the platform, through rewrites, moves to packaged applications or recompiling and re-hosting Cobol on distributed computing platforms.
After years of foot dragging, the looming Cobol brain drain will force many organizations into making a decision -- one way or the other -- within the next three to five years. "Increasingly, I see this transition happening," Vecchio says. "Waiting isn't going to make this any cheaper, and it isn't going to reduce the risk."
United Life Insurance Co. falls into the other 90%. The midsize business migrated off its Unisys mainframe several years ago, but didn't throw out the baby with the bathwater. It kept more than 1,000 Cobol programs that run the business, recompiling those for Windows using Micro Focus Visual Cobol, says program manager Jim Veglahn. "You don't just walk away from 1 million lines of Cobol code," he says. And while it's harder to fill open positions than it was a few years ago, Veglahn says his strategy is to "stay on Cobol and train as needed."
But the demographic shift will, in the long term, make Cobol "almost unsalvageable," says Vecchio. "The only debate is the slope of the decline."
BCBS's Emard disagrees. "Can we keep up with the demand for Cobol talent? Absolutely. The supply needs to be increased with the knowledge that these jobs are not going away," he says.
Vecchio says the number of Gartner clients that want to talk about mainframe migrations is up sharply. "I had 200 mainframe migration inquiries last year, and I have been speaking with thousands of mainframe shops about this whole migration question," he says. Mainframes eventually will be marginalized to only the very largest organizations in the market, Vecchio adds. "They're the only ones who can invest in initiatives and create their own training programs," he says.