The Secret to Broadcom’s Surprising Investments in Mainframe Software An Intellyx BrainBlog for Broadcom, by Jason Bloomberg Broadcom’s 2018 nearly $19 billion acquisition of CA Technologies raised several eyebrows across the enterprise technology landscape. What was a hardware company best known for its networking gear and optical sensor technology going to do in the enterprise software space? The mystery deepened as Broadcom quickly spun off application security vendor Veracode to private equity firm Thoma Bravo for $950 million, only to rejigger the remainder of CA into two franchises: the Enterprise Software Division, containing its Agile development, testing, API management, and security gear; and the Mainframe Division, a rollup of CA’s traditional mainframe products, many of which date back decades. In broad strokes, the overall CA acquisition strategy makes sense. Broadcom serves the largest enterprises and government organizations in the world, and by adding software to the mix, it’s able to increase its share of its customers’ wallets. Selling more to existing customers isn’t the whole story, of course – this acquisition is clearly a growth play first and foremost. But then the obvious question is: why keep the mainframe division? Even though mainframe companies continue to increase their usage of the platform, there’s little to no growth in terms of new customers to be had there. Just about every organization that might ever want a mainframe already has one. Nevertheless, Broadcom isn’t spinning off the mainframe division, or even moving it to the back burner. Instead, the company is doubling down on its investment in the mainframe, in spite of a slow-growing market. What could Broadcom be thinking? 2 BrainBlog: 5 Digital Transformations from SD-WAN by 2020 From Innovator’s Dilemma to ‘Gray Hair’ Dilemma It might seem that Broadcom – or perhaps its mainframe customers – are skewered on the horns of the Innovator’s Dilemma: either they stick with the mainframe and its aging software (only to become less competitive), or pull off the Band-Aid and ditch the mainframe entirely, regardless of the risks to the business such a move entails. Broadcom, however, provides a different path. In the case of Broadcom’s mainframe portfolio, the dilemma isn’t about innovation per se; it’s more about the aging of the mainframe workforce. Until recently, most mainframers were over 50, and a good number were over 60. The companies that depend on mainframes had been struggling to find a younger generation of professional willing to take the place of the old guard. This situation is changing, however, as a new generation gets up to speed on the mainframe. The bottom line: in the mainframe world, sticking with the status quo simply isn’t an option. Something has got to change. As a result, there’s a massive opportunity for mainframe software vendors to help their customers navigate their way to modern waters, while remaining committed to the mainframe platform. This is the opportunity Broadcom has in its sights. Understanding the Options Returning to Endevor as an example, what can Broadcom do for its Endevor customers? True, it must maintain the software so that existing customers can continue to use the product – but everyone recognizes that this alternative will only work for the short term. The real investment Broadcom needs to make is first, bringing Endevor to the modern era by adding interfaces and capabilities that the new generation of mainframe developer will favor. ©2019 Intellyx LLC. https://intellyx.com 3 BrainBlog: 5 Digital Transformations from SD-WAN by 2020 Second, Broadcom needs to provide alternatives to Endevor and its other legacy products, meeting the same needs as the earlier generation of software, but following an entirely modern approach to enterprise software. Broadcom is actively making such investments. For example, Endevor integrates with the popular open source source code repository software Git, and recently announced support for Atlassian Bitbucket as well, a commercial Git solution for professional teams. Broadcom’s new Bitbucket Plug-in integrates with Endevor to sync an Endevor repository with a Bitbucket server. As a result, mainframe application developers can work on Endevor elements using any modern IDE and push changes using familiar Git commands. Broad Commitment Broadcom is making a number of additional investments in the mainframe community as well. For example, Broadcom is a leading sponsor and contributor to Zowe, an open source effort of the Open Mainframe Project at the Linux Foundation. Zowe is a new open source software framework that provides solutions that allow both dev and ops teams to securely manage, control, script, and develop on the mainframe as they would any other cloud platform. In fact, Zowe is the first open source project based on z/OS, IBM’s mainframe operating system. Additionally, to be fair to the Endevor product team, CA has completed five releases and updates to Endevor over the past 2 years, and its Bitbucket and Git support dates from 2018 as well. Broadcom is also actively addressing the ‘gray hair’ dilemma. It has publicly committed to a 2:1 hiring ratio in replacing older workers in the mainframe division, leading to a double-digit growth in headcount. Broadcom also offers its no-cost Vitality Program for helping its clients deal with skills shortages. ©2019 Intellyx LLC. https://intellyx.com 4 BrainBlog: 5 Digital Transformations from SD-WAN by 2020 The Intellyx Take Broadcom has even been investing in product innovation. It has been actively incorporating artificial intelligence and machine learning into its Mainframe Operational Intelligence solution, integrating it with its overall enterprise mainframe portfolio. Artificial intelligence is but one example. Overall, Broadcom has shown commitment to helping its customers strike the right balance between investing in innovation and relying upon stable products that they have trusted for many years. This balance is difficult for any vendor to achieve, and the decades of history combined with the mission criticality of its customers’ mainframe investments only raises the stakes. Broadcom is showing that it is up to the challenge. Copyright ©2019, Intellyx LLC. Broadcom is an Intellyx customer. None of the other companies mentioned in this article are Intellyx customers. Intellyx retains final editorial control of this article. ©2019 Intellyx LLC. https://intellyx.com .