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For decades, COBOL applications have been the digital backbone of major institutions. They process salaries, power financial transactions, run logistics, and support governments. In short: they work. And that is precisely the dilemma.
Today’s Core Business Systems: The Breaking Point
Because of the above, organizations are reaching a critical situation:
- Traditional vendor support is fading.
- The right skills are becoming more and more scarce.
- And business pressure to innovate without risk is greater than ever.
- Yet those systems not only run the business, they also embody how it operates.
Three common issues facing core business systems:
The COBOL Conundrum
There are still over 800 billion lines of COBOL in production today. COBOL remains indispensable — but it is often seen as 'falling behind' compared to modern languages, and costly to maintain. Organizations want certainty in their COBOL future.
Why COBOL became the cornerstone for business
The COBOL computer language was devised by committee in 1959 with the purpose of supporting commercial application creation. The designers sensibly specified the following defining attributes that have been foundational to its success:
- 1. Business Focus – arithmetic accuracy, brilliant data handling and strong typing all contribute to a language that is fit for purpose for large-scale data processing and number-crunching.
- 2. Ease of Learning – COBOL’s English-like syntax and rich vocabulary make it one of the easiest high-level languages to learn and maintain.
- 3. Machine Independent – COBOL’s portability means it can run unchanged on mainframe, mid-range, UNIX, Linux, Windows and Cloud.
These defining characteristics remain foundational to the language even today. Later languages ignored some of the above principles, cementing COBOL’s position as a business-specific, readable, portable language to continue for decades.
COBOL had been introduced as a working compiler in 1960, and by 1970 was the world’s most popular programming language. In the 1990s, Gartner estimated there were over 200 billion lines of production COBOL code worldwide. In 2021, separate surveys by both the Open Mainframe Project (250bn) and Micro Focus (775bn) revised that estimate to be significantly higher, suggesting that COBOL’s footprint had expanded.
Current Situation
The COBOL technology market continues to evolve steadily. The COBOL language standard has evolved slowly over time (more recent additions included intrinsic functions and object orientation), while vendor innovations have added contemporary support for new platforms, cloud, containers, APIs, interlanguage communication, modern IDEs and much more. It is fair to say, however, that the pace of change with the COBOL language is limited compared with other language options.
Furthermore, technology is only valuable if there are skilled professionals trained to use it. So, questions—given its age—are often raised about COBOL’s ‘next generation’.
While exceptions exist, the inclusion of COBOL on academic courses has dwindled, with hundreds (rather than the many thousands for Java or C, for example) of higher education institutions teaching the subject. This means organizations must invest in training programs, apprenticeships or 3rd party suppliers instead. While some have, the COBOL world faces a widely reported skills challenge.
A bigger question perhaps is how well do those new COBOL staff really understand the business, or the specifics of the applications, they will be working on. The answer is typically that there is a very slow learning curve for anyone to become a true expert in each application area (and that’s true, regardless of language). Given the sheer scale of these COBOL systems (often millions of lines of code), it is not practical for anyone to understand them fully, however many trained staff are assigned. It requires dedicated, trained staff, yes, plus – crucially – appropriate tooling to assist with exploration, understanding, documentation, and issue identification. The choice and depth of technology requirement will depend a lot on the incumbent system, and the organization’s strategic approach to modernization.
Many other factors may affect attitudes towards COBOL. Issues such as organizational policies regarding in-house resourcing versus outsourcing; strategy regarding hardware choices (mainframe, cloud, hybrid); strategy regarding development practices (agile, waterfall); strategies regarding home grown versus packaged applications (ERP, CRM, etc.); investment decisions regarding innovative technology such as GenAI. Against these wider considerations, a dedicated, proportionate prioritization of COBOL systems is understandably difficult.
Reminder: The Value is the Business Function
For IT strategy, it is important to consider the true value of technology. In that regard, COBOL is no better or worse than any other language or IT system. In fact, language choice is not the issue at all—it is about the business value of the applications.
An organization’s core intellectual property exists, in the form of the existing applications’ business rules, written in COBOL. Those business rules are the nuggets of gold in the organization, and have been delivering business value (revenue, customer service, operational efficiency) for years. Protecting and harnessing that value is a vital aspect of any successful long-term IT strategy.
COBOL’s widespread usage has created question marks over its future viability. It is accused as being the reason for technical debt, and poorly maintained, monolithic systems, with an associated skills crisis. However, the challenges facing their COBOL systems have little, if anything, to do with the language itself.
With appropriate investment in people and technology, COBOL systems can continue to remain as viable as they are vital to the organizations they serve.
The CobolCloud Advantage
CobolCloud is a team of experienced COBOL and business systems experts and has been involved in modernizing customers’ mission-critical applications for over three decades. Our heritage goes back to previous organizations, covering customers running over 500 million lines of code (LOC) in production, from over 250 successful modernization projects.
CobolCloud was founded to reimagine the process by which customers can evolve and deliver the next chapter of their most important business systems. Whether into the cloud or containers or elsewhere, we are developing a unique, tailored approach to the technology, processes and even the skill pool of the customer to build a more predictable and guaranteed means of success for their IT systems.
Our perspective is that the value of your business systems matters – and protecting and evolving that value to support the future is the priority. Often, reusing the foundations of a working system is the best way to drive to the future.
Our experience in this industry, plus our products and processes (across the many variants of COBOL in use today) make us the domain experts and enable us to support customers looking to modernize today and regain control of delivering IT innovation into the future.
The Modernization Challenge
Studies show that up to 70% of application modernization projects fail to achieve their goals. Most first attempts fail outright. Too often, 'modernization' means rewriting or even 'translating' systems into new languages — an illusion that ignores the deep complexity of enterprise applications. Customers are tired of the risks and wasted effort.
The Essence of Modernization
Originally, Modernization meant making something more current or bringing it up to date. In IT, this frequently involves upgrading hardware or software to newer versions as vendors release enhanced, more powerful products. Staying current has become a routine part of organisational IT management, with regular cycles of updates encouraged by manufacturers and software vendors alike. This cycle applies regardless of whether infrastructure is on-premises, in data centres, or increasingly, in the cloud. However, such upgrades, while necessary, only scratch the surface of what true modernization entails.
Beyond the Latest Release: The Need for Material Change
Modernization is not merely about following vendor roadmaps or adopting the latest release. Often, the changes required are more profound than a simple version update. True modernization addresses systems or processes that are genuinely out of date, necessitating alterations that are both significant and strategic. This is why terms like ‘Legacy Modernization’ or ‘Application Modernization’ have emerged—to specify exactly which part of the IT landscape requires attention.
Mainframe and Platform Modernization
A significant aspect of IT Modernization has historically focused on the underlying hardware and operating system layers. The transition from mainframes to newer infrastructures is a well-established practice, fuelled by both necessity and innovation. The early 2000s saw pivotal moments, such as the migration of COBOL applications from mainframes to more modern server environments, demonstrating not only feasibility but also the potential for tangible business benefits. Today, the move towards cloud computing and mobile platforms has added further impetus, with major providers and system integrators offering comprehensive modernization solutions.
Modernizing Applications Without Losing Value
For many organisations, the real treasure lies in their applications—often written in languages like COBOL and refined over decades. These applications encapsulate critical business logic and historical knowledge, making them far too valuable to discard. The challenge is to modernize these systems without losing the embedded intellectual property and operational reliability they provide. Approaches such as wrapping, re-platforming, or incremental refactoring are increasingly being favoured, as they enable organizations to bridge old and new technologies without wholesale replacement or risky rewrites.
CobolCloud Perspective: Bridging the Old and the New
From the CobolCloud perspective, modernization is not about erasing the past but about building on it. CobolCloud recognises the immense value contained within existing COBOL applications and advocates for a strategy that respects and preserves this value. Their approach enables organisations to migrate critical workloads to modern platforms—including the cloud—while maintaining the integrity, performance, and reliability of their core systems. This method ensures that legacy knowledge is retained and that businesses can continue to leverage decades of investment in software development, all while enabling integration with modern technologies, APIs, and user interfaces.
By adopting this philosophy, organisations can avoid the pitfalls of ‘memory loss’—the inadvertent loss of business logic, data fidelity, or operational expertise that can occur during hasty migrations. Instead, CobolCloud’s strategy is to understand, enhance and extend the life of existing applications, providing a stable yet flexible foundation of both know-how and technology for future innovation. This not only reduces risk and cost but also accelerates time to value, allowing companies to respond more swiftly to changing market demands.
The Way Forward: Thoughtful and Strategic Modernization
Modernizing without memory loss requires a careful balance between embracing new technologies and safeguarding the best of what already exists. It is about recognising that legacy systems are not mere relics but vital repositories of business value and operational excellence. By prioritising approaches that honour this legacy, organizations can modernize with confidence—achieving greater agility, scalability, and competitiveness without sacrificing the knowledge and reliability that have long underpinned their success.
The Skills Crisis
COBOL itself is more than 65 years old, and many applications were conceived decades ago. The market perception is that 'COBOL skills are disappearing.' In reality, the real crisis is deeper: it is the loss of application memory. The business rules hidden in millions of lines of code are rarely documented. Functions can span multiple programs, transactions, or even systems. Over time, what is lost is not the language, but the knowledge of how the application truly works. And without a way to restore and maintain that knowledge, organizations fall back into the same cycle of uncertainty and poor decisions.
Measuring the Gap
According to a wide variety of sources, the headlines paint a bleak picture of the IT skills crisis. Reports published in IDC, CIO, and Information Week warn of a $5.5 trillion global impact by 2026 due to IT skills shortages. The skills gap spans AI, machine learning, cybersecurity, data analytics, and blockchain. And, studies reveal, it is a global issue. The demand for digitally skilled professionals is outpacing the growth of the talent pool, and businesses are feeling the pressure.
The proliferation of modern technologies and rising importance of the tech sector across all walks of life has seen the demand for skilled technologists continue to outpace supply. And in corners of the tech sector, away from the bright lights of innovative technology, the workforce supporting these systems is aging, and younger professionals often perceive mainframes as outdated. Such is the challenge facing the so-called legacy systems world – mainframes, COBOL, mid-range, assembler. While these are great technologies, they do not feature in today’s educational curriculum. As such the legacy world faces a genuine skills supply gap.
Skills: a strategic concern
Concerns over skills is, or at least should be, a strategic concern. Failure to provide the necessary expertise to manage critical IT systems creates long-term business exposure. And that stats underline that – separate market survey results published by Futurum Group, Forrester, Deloitte, and PopUp Mainframe reveal:
- 91% of organizations anticipate hiring mainframe talent within two years.
- 93% say acquiring the right resources is moderately to extremely challenging.
- 96% face development and testing challenges on the mainframe.
- 79% cite staffing limitations and poor tooling as barriers to meeting business goals.
The skills gap is affecting productivity, modernization efforts, and long-term planning. What steps can organizations take to mitigate the skills risk?
In-House Training
Examples across the industry exist of successful organizations who have invested in robust, recurring technical training bootcamps and onboarding programs. These efforts include recruitment, training, role placement, and cultural integration. Studies suggest that these are strategic investments that pay off.
Academic Partnerships
Very few of the world’s universities include mainframe or COBOL on their computing syllabus. The few who do are busy partnering with employers to produce skilled graduates, while the EMMA digital apprenticeship in the USA has seen tremendous levels of interest since it started a year ago, proof that demand exists when supply is visible. Despite the pockets of progress, however, organizations cannot necessarily expect trained graduates in sufficient quantity on the open market for all the skills they require.
Third-Party Training
Addressing specific skills gaps may require the assistance of third-party training organizations. One such example, Interskill Learning, delivered over one million hours of IBM mainframe training in 2023, suggesting a large industry appetite. In fact, 81% of organizations now leverage third-party learning platforms.
Consulting and Contractors
Boutique consultancy organizations can offer flexible, high-skill solutions, while larger system integrators also provide modernization services, helping bridge specific skills shortages quickly. More broadly, plotting the skills requirement now and into the future may highlight a necessity for additional organizational resources.
Are Tactics Enough? Strategic Planning Starts at the Top
The IT skills crisis is a C-level issue. An IT strategy is nothing without the skilled people—today and tomorrow—ready to execute it. With high turnover rates and generational shifts, long-term planning is essential. Millennials and Gen Z now make up a majority of the mainframe workforce. Their expectations differ, and organizations must accept that new forms of training, motivations, and expectations are necessary.
There is hope. Generational shifts are natural, and younger professionals are acquiring hybrid skills that blend AI and legacy system knowledge. The key lies in proactive investment and an acceptance that skills evolution sits squarely alongside technology investment.
The CobolCloud Perspective
For many organizations, the IT skills crisis is real. Importantly, leadership must accept the long-term requirement that their operations face in terms of training. Looking at isolated gaps tactically is just papering over the cracks.
CobolCloud recognizes not only the profound value of heritage IT systems, but that they must be able to evolve, grow, and support new business needs. With easy to use products, a robust customer-centric approach to modernizing and building those systems, plus investments in AI-based technology to assist with the vital ingredient of truly understanding the business systems, CobolCloud is looking to wrap the necessary support around the customer to enable them to organically develop and evolve their skills alongside their IT systems, retaining control of their IT destiny.
With smart planning, strategic investment, and a willingness to adapt, organizations can weather the storm and emerge stronger.
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