$13 Trillion of the US GDP Rides on Mainframes

$13 Trillion of the US GDP Rides on Mainframes

August 7, 2023

By Rachit Awasthi, VP of Strategy

Mainframe computers are widely deployed, especially amongst older, bigger American companies. They are robust, trusted and reliable. For older companies, they are the cornerstone of the computing infrastructure that they deploy. At the time of adoption, in some cases over half a century ago, they were cutting edge technology.

However, as these systems age, they become increasingly complex and difficult to maintain and evolve. With the average age of a COBOL programmer at 58 and roughly 10% retiring each year, the market for mainframe skills is in an accelerated state of permanent decline. This situation not only hampers innovation and competitiveness, it poses a significant risk to the companies comprising the lion’s share of the US economy.

The volume of economic activity dependent on these antiquated software systems is staggering. 

  • Analysts estimate that 71% of all Fortune 500 companies rely on mainframes as their systems of record. 
  • Fortune Analytics found that the Fortune 500 revenue for the fiscal year 2022 is USD 18.1 Trillion (2022). 
  • For reference, the Bureau of Economic Statistics of the US Department of Commerce estimates current US GDP at USD 25.46 Trillion (2022). 
  • The five hundred biggest companies in the United States contribute over 70% of US economic output.

Doing some quick math, one realizes that nearly USD 13 Trillion of revenue relies on these antiquated systems.

The profits for the Fortune 500 are USD 1.56 Trillion (2022), which puts the value dependent on well-maintained mainframe infrastructure at USD 1.1 Trillion. These figures represent the value-at-risk: the potential loss of revenue, profits, and productivity that can be displaced by competition, or lost to security breach or other computing collapse (Southwest Airlines).

The value-at-risk from antiquated mainframe systems is not evenly distributed across all industries. Financial services companies, for example, are particularly dependent on mainframes, having been amongst the earliest to adopt these computing technologies and bear the brunt of their inability to innovate rapidly. Other industries that are highly reliant on mainframes include healthcare, telecommunications, transportation, and energy.

Mechanical Orchard mitigates the risks posed by these aging systems of record, utilizing a novel approach to reverse-engineer legacy mainframe applications to run on a modern stack in the cloud, so our customers can return to innovating and meeting customer demand.

Your new legacy starts here.

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