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Skills Shortage Inspires New Mainframe Plans in Europe

Spurred by rising costs and a scarcity of legacy skills, a small but growing number of European enterprises are modernizing their mainframe applications or migrating them to the cloud, according to a new research report published today by Information Services Group (ISG ) (Nasdaq: III ), a leading global technology research and advisory firm.

The 2022 ISG Provider Lens™ Mainframes – Services and Solutions report for Europe finds companies are under increasing pressure to re-evaluate their use of mainframes in the wake of pandemic-related disruptions and changing business requirements. Providers of mainframe migration tools and services in Europe have seen revenue grow an average of 20 percent in the past year, an ISG survey finds.

Enterprises are pursuing mainframe modernization despite projects taking longer than expected and, in some cases, not reaching completion, ISG says. Companies should expect a lengthy process of analyzing systems and developing a long-term migration strategy.

“Demand is high, but execution has been slow, and the number of projects is still small,” said Anna Medkouri, ISG partner, Technology Modernization, in Germany. “Large migration providers are reporting an average of 15 to 30 projects per year in Europe.”

Mainframe costs are rising due to a shortage of COBOL language skills in European countries to maintain and manage legacy systems, the report says. In addition, independent software vendors are taking advantage of mainframe dependency with expensive expert services.

The COVID-19 crisis exposed the limitations of mainframes when some government agencies in Europe could not scale their systems fast enough to respond to increased demand from their citizens, ISG says. This caused some small system disruptions, heightening interest in migrating mainframe applications to the cloud.

Enterprises across Europe are turning to multinational service providers with the increasingly rare skills needed for large mainframe projects, the report says. Unlike for most IT services providers in Europe, language and culture do not give small players a local advantage.

“In this market, the language that matters is COBOL,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Smaller companies compete by offering niche specializations and partnering with major providers.”

The report includes insights into other issues affecting enterprise mainframe strategies, including the role of hyperscale cloud providers and whether investments in modernizing COBOL are paying off.

The 2022 ISG Provider Lens™ Mainframes – Services and Solutions report for Europe evaluates the capabilities of 42 providers across five quadrants: Mainframe Modernization Services, Mainframe Application Modernization and Transformation Services, Mainframes as a Service (MFaaS), Mainframe Operations, and Mainframe Application Modernization Software.

The report names Atos, Capgemini, Infosys, Kyndryl and TCS as Leaders in three quadrants each and DXC Technology and Wipro as Leaders in two quadrants each. Advanced, Asysco, AWS (Blu Age), Cognizant, Google, HCL, Micro Focus, TmaxSoft and T-Systems are named as Leaders in one quadrant each.

In addition, Cognizant, Fujitsu, HCL, Heirloom Computing and TCS are named as Rising Stars – companies with a “promising portfolio” and “high future potential” by ISG’s definition – in one quadrant each.

Customized versions of the report are available from Google , Freesoft , Infosys and Kyndryl .

The 2022 ISG Provider Lens™ Mainframes – Services and Solutions report for Europe is available to subscribers or for one-time purchase on this webpage .

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage .

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III ) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com .

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