AWS's New Mainframe Service Goes After Legacy IT Market Worth Billions – Business Insider

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Amazon Web Services continued its tradition of announcing a slew of product updates and announcements at its annual re:Invent conference last month. Though perhaps lacking some of the panache of previous years under former CEO Andy Jassy, the announcements still reaffirmed AWS’s position as the market’s leading cloud provider.
But some of the flashier announcements it did unveil — such as a new so-called “digital twins” product or even its private 5G service — weren’t the ones that were most exciting to AWS partners
They told Insider that Amazon’s new mainframe migration service, announced by new AWS CEO Adam Selipsky, has the potential to disrupt a legacy IT business that has long been dominated by IBM and offers a big opportunity for partners to do business with the cloud giant. 
Kenneth Ziegler, the CEO of AWS consulting partner Logicworks, called Amazon’s announcement a major move to capture that massive market — essentially creating “a fast-line” from traditional IT hardware to its cloud. To some, it’s an aggressive move, reflecting the broader cloud industry’s push to fully replace the legacy model. 
“The fact remains that AWS and all of the hyperscalers’ goals is to shut down data centers,” said Gordon McKenna, CTO of AWS consulting partner Ensono. “They want customers to move that data and their servers and their applications to Amazon’s data centers.”
Amazon’s service helps customers using mainframe computers, the physical servers once considered the standard for computing in the 1970s, transition that IT infrastructure to its cloud without the necessary in-house expertise. Mainframes are still in use at many banking and retail companies , for example, presenting a lucrative opportunity for all three cloud giants to expand their footprints: Microsoft and Google also have programs aimed at the segment, which similarly piggyback off the help of IT services partners.
That market is only growing: Analyst firm Gartner predicts 35% of mainframe storage will move to the cloud by 2025, compared to less than 5% in 2020, and Transparency Market Research (TMR) expects the size of the global market to reach $108.9 billion within a decade.
Indeed, as all the tech giants race for what’s left of the market for cloud computing, some insiders say Amazon’s latest move could help it undermine one of IBM’s last great strongholds in mainframes and take over even more of the IT market.
But others, like Futurum analyst Dan Newman, say AWS is mostly interested in the data and applications that companies plan to move to the cloud anyway. The rest, which might be regulated or have special security requirements, will remain on mainframes, he expects. Still, other mainframe giants like Broadcom and Hewlett Packard Enterprise are phasing out their older equipment, he said, accelerating the mainframe-to-cloud pipeline for AWS.
That, in turn, could be a big opportunity for what Ziegler describes as the “big swath” of AWS partners who offer the mainframe service to their own customers.
“They’re obviously trying to put a lot of partners into that business by providing an acceleration path to unlock those stuck, legacy applications,” Ziegler said.
AWS partners have previously told Insider that the cloud giant places a premium on migrations, offering big incentives for partners to help move customers onto its cloud.
“It’s a big initiative within AWS, and it’s a big initiative for us,” said Elena Shorb, an Amazon alliance manager at the AWS partner Mission.
Big Blue, meanwhile, is hoping its hybrid cloud approach will be more enticing to mainframe customers, who may not be ready to give up all of their physical hardware just yet.
Meredith Stowell, a vice president in IBM’s mainframe unit, told Insider over email that “34 out of 35 attempts at pure migration fail,” while IBM’s approach “carries less risk.”
“IBM’s POV is that mainframes are a key part of a hybrid cloud approach. It’s not about cloud or mainframe – the data shows that cloud and mainframe are better together,” she said, adding that IBM does not consider AWS a competitor.
“We want to help our clients to find the right platform for a particular workload, whether that is IBM Z, IBM Cloud or third-party hyperscalers including AWS,” Stowell added.
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