Modern Mainframe Development

Chapter 1. Why Be a Mainframe Developer?

The long-term prospects for tech employment are particularly bright. Just look at the results of research from the US Bureau of Labor Statistics. The forecasted employment growth for technology occupations is expected to be about 13% from 2020 to 2030, which is significantly faster than the average for all occupations. The number of jobs projected to be added during this time is roughly 667,600.

But for those looking at career opportunities—​or exploring a change—​mainframe development is likely one of the last areas in tech considered. In fact, the odds are pretty good that many people will not even think about this category.

This should be no surprise. The media usually does not cover mainframe topics or trends. What’s more, these systems often handle applications that power infrastructure, which makes it difficult to get a sense of what they can do. Besides, it’s not like any one can go to a Best Buy and purchase a mainframe. These machines are expensive and complex. They also require a team of talented IT professionals.

The mainframe is a mystery for many people. And the common perception is that the industry is a backwater, with little growth.

But sometimes perceptions can be wrong, and this is certainly the case with the mainframe industry. Since the technology is generally for large companies, opportunities exist for developers to work on systems that impact many customers and users. Often the technologies support mission-critical applications, such as those that process ATM transactions or insurance claims.

Mainframe systems are also undergoing much transformation. This means they allow for the use of modern tools for DevOps, AI, integrations with mobile applications, and APIs.

So in this chapter, we will look at some of the driving forces of the mainframe industry and why it is a great option for any developer.

Fear of Disruption

In the mid-1990s, Harvard professor and entrepreneur Clayton Christensen coauthored a pathbreaking paper titled “Disruptive Technologies: Catching the Wave”. He set forth the core reasons for how technology can disrupt an industry. One of his key insights was that even strong companies could easily be vulnerable.

Christensen calls this the innovator’s dilemma. An incumbent company will generally invest in sustainable innovations for existing products to maintain revenue and profit growth. But a startup does not have to worry about an existing product. It can take big risks and try revolutionary innovations, and if these get traction with customers, the results can be devastating for incumbents.

Nowadays the innovator’s dilemma has become a palpable fear for many large companies, and many of them have mainframe systems. The belief is that if these companies don’t adopt more innovative technologies, upstarts will ultimately prevail. This fear is perhaps the biggest catalyst for change in the mainframe industry and will mean long-term need for experienced developers.

To get a better sense of this fear, just look at Jamie Dimon, CEO of JPMorgan Chase. His firm is heavily dependent on mainframes.

In a 2020 shareholder letter, Dimon pointed out that disruptive technologies represent one of the biggest threats to his company. This is the case even though JPMorgan Chase has continued to grow strongly, despite the impact of the COVID-19 pandemic. In 2020, company revenues increased from $118.5 billion to $122.9 billion, and profits jumped from $29.1 billion to $36.4 billion, which was a record for the company. The company remains focused on gaining market share, investing in new technologies, and looking at ways to bolster its risk systems.

But in his shareholder letter, Dimon noted, “Banks have other weaknesses, born somewhat out of their success—​for example, inflexible ‘legacy systems.’” He then pointed out the threat of fintech companies that have been revolutionizing financial services, such as with mobile apps: “From loans to payment systems to investing, they have done a great job in developing easy-to-use, intuitive, fast and smart products. We have spoken about this for years, but this competition now is everywhere. Fintech’s ability to merge social media, use data smartly and integrate with other platforms rapidly (often without the disadvantages of being an actual bank) will help these companies win significant market share.”

But fintechs are not the only problems for traditional companies like JPMorgan Chase. Dimon also highlighted the impact of the mega tech operators like Amazon, Apple, Facebook, and Google. He wrote, “Their strengths are extraordinary, with ubiquitous platforms and endless data. At a minimum, they will all embed payments systems within their ecosystems and create a marketplace of bank products and services. Some may create exclusive white label banking relationships, and it is possible some will use various banking licenses to do it directly.”

This stark honesty is definitely refreshing. It also is a positive sign, as Dimon is aware of the competitive environment and the need for investing in technologies. It’s table stakes.

His example will encourage many other CEOs to take action. And this will ultimately mean even more urgency for modernization of legacy systems—​leading to increasing demand for those developers who work on these technologies.

Software Is Eating the World

Marc Andreessen has a knack for anticipating the next big trend. In the early 1990s, he created the Mosaic browser, which became the basis for the iconic internet startup Netscape. Later in the decade, he went on to create Opsware, which was one of the pioneers of the cloud business.

But it was in 2011 that Andreessen set out to write his vision of the technology world. The article, published in the Wall Street Journal, was entitled “Why Software Is Eating the World”.

Writing 60 years after the invention of the microprocessor, Andreessen claimed that technology infrastructure had finally reached a point where industries could be transformed on a global scale. One reason for this was cloud platforms, especially Amazon Web Services (AWS). These platforms made it possible for any company to easily and inexpensively spin up an app. There was no need to buy servers, pay huge fees for data center access, or hire network specialists.

Another key factor was the ubiquity of broadband internet. In 2011, more than 2 billion people had access, compared to only 50 million in 2000.

According to Andreessen, “My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.”

This was definitely prophetic. Since then, we’ve seen Uber disrupt the traditional taxi industry, Netflix upend entertainment, and social media transform the broadcast industry, just to name a few examples.

But this is not to imply that traditional industries—​which often rely on mainframes—are doomed. They are not. They actually have major advantages, like access to huge amounts of data, substantial financial resources, trusted brands, and talented employees.

Their mainframe systems are also a benefit. They are highly secure and reliable, and can handle massive workloads. As traditional companies continue to develop apps and websites, they are finding ways to leverage the mainframes, not get rid of them.

Interestingly enough, Andreessen highlighted various examples of traditional businesses successfully leveraging technologies. For example, he mentioned that the oil and gas industry has been a pioneer of data visualization, analytics, and supercomputers. These technologies have been used to improve the discovery of new sources of energy.

In the agricultural industry, companies like Deere & Company and Caterpillar have embedded sophisticated data-gathering systems in their tractors and equipment. This has then been melded with satellite data. With all this, AI has been used to make better decisions and even improve the development of newer systems.

Here are some other examples from Andreessen:

Walmart

From its early days, CEO and founder Sam Walton invested heavily in technologies. During the 1960s, he focused on using IBM mainframes to improve his company’s supply chain. No doubt, this reliance on technology was a key for Walmart becoming the world’s largest retailer.

FedEx

The company is one of the largest buyers of technology, which has been critical for logistics. Andreessen writes that FedEx “is best thought of as a software network that happens to have trucks, planes and distribution hubs attached.”

Airlines

The industry innovated reservation systems, one of the first examples of mainframe use during the 1960s. Airlines also use data to price tickets and optimize routes.

In other words, those who want to work in the tech industry often end up working with traditional businesses and their mainframe systems. This will provide exciting opportunities for developers who want to take on tough challenges, such as fending off startups and retooling legacy systems.

COVID-19

The COVID-19 pandemic has shown the vulnerability of the global population. A new virus can easily spread at lightning speed and lead to massive closures. But the pandemic has also showed our amazing abilities in innovation and creativity. In record time, companies like Moderna, Pfizer, and BioNTech were able to develop revolutionary vaccines that have proven to be extremely effective.

It’s true that the long-term consequences of the COVID-19 pandemic are far from clear. But it seems likely that it will factor significantly into the decision making of businesses. Major changes have already occurred in approaches to global supply chains. Digital transformation has also accelerated.

In April 2020, Microsoft CEO Satya Nadella had this to say about it: “We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security—we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything.”

Perhaps one of the biggest changes has been a move to hybrid work approaches, blending in-office and home work. Millions of people have become accustomed to using tools like Zoom, DoorDash, Airbnb, and Slack.

A McKinsey global survey of executives bolsters Nadella’s argument of much quicker adoption of new technologies. The respondents indicated that the digitization of customer and supply-chain operations accelerated by a factor of three to four years. They also indicated that the changes would not be temporary. For the most part, digital transformation has become an extremely powerful trend.

According to McKinsey, “For most, the need to work and interact with customers remotely required investments in data security and an accelerated migration to the cloud. Now that the investments have been made, these companies have permanently removed some of the precrisis bottlenecks to virtual interactions. Majorities of respondents expect that such technology-related changes, along with remote work and customer interactions, will continue in the future.”

Here are some of the other takeaways of the survey:

• The respondents are three times likelier to have 80% of their customer interactions be digital.

• There has been a seven-year increase of the rate at which companies have developed products and services. This has been driven primarily by industries like healthcare, financial services, and professional services.

• For various corporate measures, the one that has increased the most has been the budget for digital transformation.

• About one-quarter of respondents reported a decrease in their physical footprints.

The impact on mainframes has been notable. Historically, many business leaders have been resistant toward investing in modernization. After all, these systems were rigid and carried risks for changing mission-critical functions. But COVID-19 drove an urgency to change the status quo—​and this came from senior executives and managers.

Government Modernization

The opportunity for mainframe development is not just about modernizing IT for businesses. It is also about governments across the world. As you’ll see in the next chapter, one of the biggest catalysts for the standardization of mainframes during the 1960s was the US Defense Department.

As a result, mainframes remain pervasive within government agencies and institutions. However, meeting the needs of the 21st century will require significant retooling of these systems.

The COVID-19 pandemic has highlighted this. When the pandemic emerged in April 2020, many unemployment insurance systems crashed. The legacy IT systems were simply not built to handle such spikes in applications.

The situation was so dire that New Jersey governor Phil Murphy gave a speech in which he said, “Given the legacy systems, we should add a page [to their online call for health professionals] for COBOL computer skills because that’s what we’re dealing with. We have systems that are 40-plus years old. There will be lot of post-mortems, and one of them on our list will be how the heck did we get here when we literally needed COBOL programmers.”

Many states had to scramble to find solutions, which spurred innovation. Just look at Texas: when the pandemic hit, its unemployment insurance system was instantly swamped as the number of claims rose from 13,000 per week to more than 400,000. To deal with the surge in volume, government authorities looked at ways to enhance existing mainframe systems. One move was to migrate the website to a cloud service provider. But mainframe capacity was also increased by 200%. Next, the Texas government implemented a modern voice response system that used chatbots. Interestingly enough, this helped with basic issues, such as retrieving user IDs and passwords for applications. After all, many of these people had not used unemployment insurance in many years and had forgotten their credentials.

According to Clay Cole, director of the Texas Unemployment Insurance Division, “Even though we had legacy systems, our information technology teams were very nimble and were able to modify our software programming in order to allow us to deliver these new programs, and we did so.”

Texas is certainly not alone in striving for modernization. This is a top-of-mind goal for all state governments. The federal government is ramping up efforts as well.

For example, the Technology Modernization Fund (TMF) was launched in 2017. The goal of this federal government program is to streamline the process for agencies to obtain funding for IT modernization programs.

Some of the areas that the TMF focuses on include high-priority systems, cybersecurity protection, public-facing digital services, and cross-government collaboration services.

Note

The US federal government is the world’s largest buyer of technology. Its spending is more than $100 billion per year.

Future of Mainframe Development

Common Business Oriented Language (COBOL) is the main computer language for mainframe development. Chapter 4 provides some background on this, and later chapters show how to use the code.

While COBOL has its issues, it is still a robust language. Just look at a survey from Micro Focus. About 70% of respondents indicated that they were not interested in replacing and retiring COBOL applications. Instead, their focus was on using the language to modernize existing systems.

This is what Chris Livesey, senior vice president of Application Modernization and Connectivity at Micro Focus, had to say: “As we see the attitudes around COBOL modernization with changes to where and how it needs to be delivered and how its usage continues to grow, COBOL’s credentials as a strong digital technology appear to be set for another decade. With 60 years of experience supporting mission-critical applications and business systems, COBOL continues to evolve as a flexible and resilient computer language that will remain relevant and important for businesses around the world.”

Here are some of the other findings of the Micro Focus survey:

• 92% of respondents said they believed that their organization’s COBOL applications were strategic, up from 84% in 2017.

• From 2017 to 2020, the average COBOL application code base has gone from 8.4 million to 9.9 million lines.

• 63% of respondents said that their modernization efforts will focus on new functionality and improving existing processes.

Career Opportunities

As companies look to modernize their systems, they are running into a major problem: a talent shortage. It is increasingly difficult to find prospects who have the right skills, such as the ability to code in COBOL. According to PwC’s 23rd Annual Global CEO Survey, about 74% of respondents indicated that this was a major concern and could limit growth. Of course, the COVID-19 pandemic has had a notable impact, as 40% of employees have been considering a job change, according to Microsoft’s 2021 Work Trends Index.

Such issues have definitely been aggravated in the mainframe industry. One reason is that only a few dozen colleges teach COBOL. Moreover, many Baby Boomers will retire in the next decade, and this will mean even fewer COBOL programmers.

Of course, these trends bode extremely well for developers who are looking at a career in the mainframe industry. With demand increasing and the supply of qualified developers falling, compensation rates will rise. According to Leon Kappelman, a professor of information systems at the University of North Texas, “Undergrads who take the school’s two classes in mainframe COBOL ‘tend to earn about $10,000 per year more starting out than those that don’t.’”

Employers will also increasingly look at ways to train and mentor new prospects. In fact, it is common for larger enterprises to have their own educational programs or bootcamps.

Employment arrangements will also likely be more flexible. With remote work and hybrid approaches becoming more common, opportunities will be available for people across the globe. It’s also becoming more common to hire qualified mainframe developers as freelancers.

Note

The technology talent shortage will likely have adverse impacts on the US economy. Based on research from Korn Ferry, it could mean losing out on over $160 billion in annual revenues from 2020 to 2030.

Interestingly, some employers are even forgoing the need for a traditional four-year degree. Rather, apprenticeship programs will bolster the necessary skills.

Even the federal government is looking at taking a role. In 2021, the House of Representatives passed the National Apprenticeship Act, which would earmark $3 billion for new programs.

The proposed Grace Hopper Code for Us Act also was introduced into Congress in 2021. It would provide $100 million in grants to colleges to provide education for legacy systems and languages. But assistance would also be available for students from age 6 through 12. Some of the supporters of the bill include IBM, University of Alabama at Birmingham, and North Carolina Agricultural and Technical State University.

One of the sponsors of the bill, Pennsylvania representative Matt Cartwright, noted, “The importance of IT professionals cannot be understated, especially given the weaknesses the COVID-19 pandemic showed in government IT systems. Lack of IT infrastructure can ultimately impact the government’s ability to respond in the time of a crisis, and skilled IT professionals can help ensure our preparedness.”

One argument against mainframe development is that it is not particularly exciting. Further, some people fear learning languages that may ultimately become obsolete. But for the most part, the work of mainframe development can be very fulfilling. Again, there is an opportunity to have a major impact on a large company whose systems impact potentially millions of people.

For example, about 20% of the 15,000 developers and HR managers who responded to a survey from CodinGame said that solving interesting technical challenges was the most important part of taking a job. This came after flexible hours and healthy work-life balance (18.5%), salary (13%), and company culture (10.9%).

Note

A study from iCIMS shows that it takes about 66 days to fill a technology role, which is 50% longer than other roles.

Conclusion

In this chapter, we took a look at key drivers for growth of the mainframe industry. One of the most important is fear in the executive suite, as fast-growing startups pose an existential threat to larger companies. They do not have to deal with legacy systems and have the benefit of a thriving venture-capital market. Another threat comes from the mega tech operators like Amazon, Apple, Facebook, and Google.

As a result, larger companies have had more urgency to invest more in digital transformation. They certainly understand that “software is eating the world,” as Andreessen said in 2011.

The COVID-19 pandemic has been another big factor. Some of its impacts are likely to be long-lasting, including remote-working arrangements and higher levels of IT investment.

Given all this, modernizing legacy mainframe systems carries more urgency, which should be a long-term catalyst for growth for developers. Larger companies certainly have advantages, including their financial resources, strong brands, and significant customer bases. Thus, developers have an opportunity to be a part of these exciting transformation efforts.

We also have seen that governments will be a source of growth. They have expansive mainframe systems that need to be modernized. To this end, Congress is already looking at ways to develop relevant programs.

The bottom line: mainframe development represents a solid career path. In the next chapter, we’ll continue this discussion by walking through some background information on mainframes.