How Much Does It Cost to Set Up and Maintain Mainframes?
Setting up a mainframe involves significant expenditures, such as purchasing hardware and software licenses, but the real cost footprint includes less obvious elements. Initial deployment requires extensive project planning, infrastructure modifications, and integration with existing enterprise systems. These steps demand both internal and external consulting resources, which can substantially raise the total cost.
Long-term maintenance expenses also go beyond standard support contracts and utility bills. Mainframes require continuous optimization to stay efficient, including tuning workloads, updating software stacks, and managing firmware compatibility. These tasks consume both human and computational resources. In addition, the high reliability expectations of mainframes mean that organizations must invest in redundancy, disaster recovery setups, and high-availability architectures—each carrying ongoing costs.
This is part of a series of articles about mainframe modernization
Overview of Mainframe Cost Structure
Here are the key components that determine the cost of a mainframe system, divided into capital and operating expenditure.
Capital Expenditures (CapEx)
Mainframe CapEx includes upfront investments in hardware, such as the mainframe chassis, processors, memory units, and storage systems. These costs are substantial due to the custom-built, high-availability design of mainframe components. Organizations also incur expenses for specialized networking gear and data center infrastructure upgrades, including power and cooling systems, to support mainframe deployment.
In addition to physical hardware, CapEx can include the cost of initial software licenses for operating systems and core applications. These expenditures are typically amortized over the lifespan of the mainframe, which often exceeds a decade due to its durability and upgrade paths.
Operating Expenditures (OpEx)
Mainframe OpEx consists of ongoing costs required to maintain and operate the system. This includes software maintenance fees, subscription costs for middleware and development tools, and charges for capacity-based licensing models. Many vendors, including IBM, use a monthly license charge (MLC) model that ties software costs to actual usage, which can fluctuate significantly.
Personnel costs also fall under OpEx. Skilled mainframe administrators, system programmers, and application developers are required to manage and support the environment. Additionally, organizations must budget for training, support contracts, periodic system audits, and utility bills for continuous power and cooling.
4 Hidden Costs of Mainframes
Beyond the obvious costs listed above, there are several hidden costs that can substantially increase the cost of mainframes, putting a major burden on organizations.
1. Specialized Personnel and Skills Shortage
Mainframes operate using technologies such as COBOL, PL/I, assembler, JCL, and proprietary platforms like IBM’s z/OS. These technologies are not commonly taught in modern computer science curricula, resulting in a shrinking pool of skilled professionals. As a result, organizations must compete for a limited number of experienced mainframe engineers, often paying premium salaries and benefits to attract and retain them.
This scarcity also affects succession planning and operational resilience. Many enterprises rely on a small number of long-tenured employees with deep institutional knowledge, creating a single point of failure. When these individuals retire or leave, the cost of knowledge transfer and onboarding becomes substantial. Organizations often invest in internal training programs, partner with external consultancies, or offer incentive packages to delay retirements—all of which increase overhead.
2. Energy Consumption and Infrastructure
Mainframes consume a disproportionately high amount of power relative to modern, distributed systems. Their high-performance processing units, memory subsystems, and I/O channels generate large amounts of heat, necessitating advanced cooling solutions. This leads to elevated energy bills not only from the mainframe itself but from the HVAC systems required to maintain optimal operating temperatures.
Facilities may also need to be retrofitted or redesigned to handle these demands. That includes installing redundant power supplies, uninterruptible power systems (UPS), raised flooring for air circulation, and enhanced fire suppression systems. These upgrades add to both CapEx and OpEx over the system’s lifecycle.
3. Vendor Lock-In and Limited Flexibility
Mainframes typically require a single-vendor ecosystem, most commonly tied to IBM. This includes hardware (e.g., z15 or z16), the operating system (z/OS), middleware, database systems (DB2, IMS), and development tools. The tight integration and proprietary nature of these components mean customers are locked into the vendor’s pricing, upgrade cycles, and strategic direction.
This lock-in limits the ability to adopt new technologies or switch to more cost-effective alternatives without significant investment in migration or re-architecture. Even minor changes—such as adding processing capacity—can require renegotiation of contracts or incur step-function pricing increases due to tiered licensing models.
4. Security and Compliance Overheads
Although mainframes have strong built-in security features, maintaining a compliant and auditable environment involves continuous effort. Compliance with regulations like GDPR, HIPAA, SOX, and PCI-DSS requires the implementation of detailed access controls, logging, encryption, and audit capabilities.
This means investing in specialized software solutions for security information and event management (SIEM), role-based access control (RBAC), multi-factor authentication (MFA), and encryption both at rest and in transit. Organizations must also conduct regular vulnerability scans, penetration tests, and third-party audits, all of which incur direct and indirect costs.
Another challenge is that patching mainframes can be more complex than in other environments. Due to stringent testing and uptime requirements, applying security updates must be carefully coordinated and often delayed, increasing the risk of non-compliance or exposure to unpatched vulnerabilities.
4 Ways to Reduce Mainframe Costs
Here are common ways your organization can more effectively manage and reduce the cost of mainframe system operations.
1. Schedule Batch Jobs Strategically
Mainframe software costs, especially under IBM’s monthly license charge (MLC) model, are heavily influenced by peak usage. Specifically, charges are based on the highest rolling four-hour average of CPU usage within a billing period. By strategically scheduling batch jobs outside peak windows—typically overnight or during weekends—organizations can reduce this peak and thus lower their monthly software expenses.
Effective batch scheduling involves more than shifting jobs to off-peak hours. It requires careful analysis of job dependencies, runtime profiles, and business priority. Tools like IBM Workload Scheduler or BMC Control-M can automate job sequencing, dependency resolution, and alerting for failed jobs. Implementing workload management policies within IBM’s Workload Manager (WLM) can also help assign CPU priorities and manage resource contention.
Advanced analytics can identify batch workloads that consistently drive up peak CPU usage, allowing IT teams to reschedule, optimize, or even decompose these jobs. Collaboration across IT and business stakeholders is essential to balance cost-saving opportunities with SLAs and reporting requirements.
2. Mainframe Modernization and Rehosting
Modernization refers to updating legacy mainframe applications to run in more flexible and cost-efficient environments. This can take various forms, such as replatforming COBOL applications to Java or .NET, decomposing monoliths into microservices, or moving workloads to containerized or serverless environments.
Rehosting—also known as “lift-and-shift”—allows organizations to run mainframe workloads on distributed infrastructure without rewriting the application. Tools like Micro Focus Enterprise Server or TmaxSoft OpenFrame emulate mainframe runtime environments on x86 hardware or cloud platforms, preserving functionality while reducing hardware and licensing costs.
While modernization offers long-term benefits like improved agility, maintainability, and integration with DevOps pipelines, it often involves high initial costs and technical complexity. Rehosting is faster but retains some legacy constraints. Choosing the right strategy depends on the application’s strategic value, code complexity, and available skills.
Both approaches reduce dependency on specialized hardware and vendor lock-in, enabling access to open-source tools, broader talent pools, and cloud-based scalability.
3. Consolidate Workloads
Mainframe environments often suffer from underutilized resources due to fragmented workload distribution across multiple logical partitions (LPARs) or physical machines. Consolidating these workloads helps increase utilization rates, streamline operations, and reduce costs related to software licensing, support, and power.
Consolidation can be done vertically (combining workloads within the same system) or horizontally (migrating workloads from multiple systems to fewer, larger systems). IBM’s Processor Resource/System Manager (PR/SM) and hypervisor technologies allow secure isolation of different workloads within a single physical system using LPARs.
An effective consolidation strategy starts with a thorough inventory of workloads, including performance profiles, interdependencies, and business criticality. Performance modeling tools like IBM zPCR or IntelliMagic Vision help simulate the impact of consolidation before changes are made.
Careful workload balancing ensures that no single LPAR becomes a bottleneck, while policies in WLM maintain service levels. Reducing the number of active LPARs and associated software instances directly lowers MLC and support costs.
4. Adopt Sub-Capacity Pricing
Sub-capacity pricing offers a way to pay only for the actual usage of mainframe software, rather than full system capacity. To qualify, organizations must configure their systems to support sub-capacity measurement and reporting using IBM’s Sub-Capacity Reporting Tool (SCRT).
Enabling sub-capacity pricing involves activating Workload Manager (WLM) and Intelligent Resource Director (IRD) features, and assigning proper service classes to control CPU dispatching. The SCRT collects usage data and generates monthly reports that IBM uses to calculate software charges.
This model is particularly beneficial for organizations with fluctuating workloads, seasonal spikes, or large but infrequently used applications. By capping CPU usage for non-critical workloads, enterprises can manage their 4HRA and avoid unnecessary cost escalation.
To fully leverage sub-capacity pricing, regular analysis of SCRT data is essential. This helps identify trends, anomalies, and opportunities to reconfigure workloads for further savings. However, misconfigurations or failure to submit accurate reports can result in higher costs or loss of eligibility, so governance and process discipline are critical.
Related content: Read our guide to mainframe migration
