For most companies, mainframe expenses require up to 40 percent of the IT budget.

Investing in a quality mainframe system brings significant value to many top enterprises, and yet it can still be difficult to stomach. Mainframes remain essential for carrying out mission-critical operations within banking, finance, health care, and government, so their value should not be diminished through hasty budget cuts.

How can mainframe managers work to reduce ongoing mainframe costs without complicating the value z/OS systems bring to their company?

It’s time to make some changes. You can exert more control over IBM mainframe prices than you might think. But first, before you adjust your configuration, you must understand the primary drivers of mounting mainframe expenses.

What contributes to high mainframe costs?

You’re tasked with reducing the monthly mainframe cost, but, unfortunately, it’s not as simple as cutting the most significant price factors.

One of the most difficult steps in mainframe cost control is identifying excess expenses. Cost control initiatives cannot come at the expense of system performance, so uncovering savings can be a bit of a balancing act.

Although far from an exhaustive list of cost drivers, the below system features are common cost culprits for most mainframes:

  • Software licenses
  • Contracts
  • Operational inefficiencies

Let’s explore each of these elements individually to better understand what influences mainframe expenses, and explore cost control methods to ultimately optimize z/OS performance without breaking the bank.

Software licenses

Hardware leasing costs are more-or-less static, so this expense comes at no surprise. It is the software that runs on the system that tends to sneak up on users and result in monthly sticker shock. Here is the million dollar question: how does your current workload configuration drive cost?

Monthly licensing charges (MLC) can be a volatile variable for mainframe expenses. zOS, DB2, IMS, CICS, etc. usually require around 30 percent of the IT mainframe operating budget, and MLC is probably the largest line item on the monthly mainframe bill.

MLC can be a detriment to your budget for many reasons:

  • Outdated licenses: Within a complex z/OS system, it’s not uncommon for outdated, or unused, software to bloat your system and drive up mainframe costs.
  • Redundant applications: After years of operation, there’s a chance applications have been installed that perform similar functions, so users are essentially paying double but not receiving any added value.
  • Software stagnation: Sometimes applications simply lose their efficacy. Software that was once useful no longer has a place in an evolving configuration, and yet you still pay for the license.

A little housekeeping of software licenses might be in order, but how? Software Urbanism is a methodology designed to ensure that all software installed within your IT infrastructure brings the most added value possible.


It is in the best interest of IBM to offer z/OS discounts, because it promotes user satisfaction and retention. But, even though discount opportunities exist in the world of mainframe cost control, users don’t always know where to look. It’s not uncommon for z/OS users to over-pay simply because they don’t know how to bargain hunt.

For example, contracts based on Advanced Workload License Charges (AWLC) are designed to reduce mainframe costs by aligning cost with MSU consumption. This pricing metric — a “pay for what you use” model — allows users to pay for key software at the LPAR-level. This degree of specificity allows users to regulate costs with improved efficiency.

However, this pricing metric is not a simple “set it and forget it” option. Without ongoing optimization, users stand to take on an even greater financial burden than when they started.

AWLC requires users to commit to an annual MSU consumption limit, and if this cap is exceeded users are penalized with a large bill at the end of the year. Whether due to penalty fees, or overcompensating with excess consumption commitments, many users overpay for mainframe contracts.

Be sure to review your monthly report, identify common workloads that might be subject to discounts, and adjust accordingly. But, don’t stop there — practice regular system optimization to ensure your mainframe needs and contract requirements continue to align.

Operational inefficiencies

Operational inefficiencies is an admittedly broad cost control category, but it is no less crucial to budget management efforts. While it might seem reductive to attribute mainframe costs to optimization issues, in many cases it really is that simple.

The key to remedying operational bottlenecks is through the Sub Capacity Reporting Tool (SCRT). SCRT is a window into mainframe performance — SCRT reports help users identify mainframe inefficiencies, which can lead to actionable cost-savings down the line.

There is far more utility in SCRT than most users realize. This report is the ultimate guide to machine consumption and offers invaluable insights such as:

  • Detailed product information: Section V5 of the SCRT report can inform configuration adjustments and help you make the most of your z/OS environment.
  • LPAR activity: Monitor the consumption and activity of each LPAR. This includes MSU consumption and the Rolling 4-Hour Average peaks used for invoicing.
  • Monthly billing analysis: Build graphs to easily see peak distribution. Better understand MSU ranges that are in need of soft capping efforts.

The greatest advantage that comes out of SCRT is the ability to analyze mainframe data, which can be used to influence future configuration adjustments. An informed user is a frugal user — with improved insight into mainframe activity, managers can make cost-savings decisions on a granular level.

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