Dell also announced they would purchase Wyse Technology, a cloud client computing firm, as well as Make Technologies, "a leading global provider of application modernization software and services that reduce the cost, risk and time required to re-engineer applications."
Dell's competitor HP has already gone down this path.
Back in 2008, HP spent about $13 billion to acquire services heavyweight EDS. They also partnered with Micro Focus for application modernization software. Emerging out of this was an application modernization group focused on moving workload off of the mainframe. See an earlier blog post for more information.
Now, Dell and HP are in a head-to-head struggle to see who can more quickly move more legacy apps off of the mainframe onto their platforms. This is a battle to gain mid-range platform market share by stealing it from the IBM mainframe.
Should IBM be worried that two mid-range competitors are consolidating on different flanks, both intent on eliminating the mainframe computer?
Many companies want to eliminate the high cost of running legacy applications on mainframe computers. The initial big ticket price was one thing, but most software vendors annually hit their customers with 20% maintenance fees. If a decade ago you spent $1 million for a mainframe software product, you probably pay $200K each year just to keep it updated.
Over those ten years, you may have already spent $3 million on that one package; a product for which today you cannot find technical support resources. A product for which you will continue to pay annual maintenance fees despite declining usage.
Mainframe software customers got the short end of the stick, but what could they do? Their challenge has always been the extremely high cost and risk of trying to migrate off the mainframe.
Now that Dell and HP are making it easier for customers to part ways with IBM, more companies will stop just considering leaving the mainframe and try it.
If you have a legacy 4GL (such as FOCUS, NOMAD, or RAMIS) still running on the mainframe, click here to read my 2008 blog article on the topic of migrating and modernizing them.