7 Mainframe Modernization Techniques (And When to Use Each)

Before we discuss the crux of the topic, let’s explore some of the benefits of mainframe modernization:

The outdated the mainframes are, the more expensive they become to maintain. Your mainframe works fine … as long as you keep spending on its maintenance.

High licensing fees, a shortage of talent who know legacy languages, and the expense of hardware maintenance turn your mainframe into a money-dumping pit.

Modernization can cut these costs down by improving code quality or migrating your mainframe to a modern platform.

According to a Kyndryl report, mainframe modernization was expected to save an organization at least $23.3 million per year.

And the best part? The average cost of mainframe modernization dropped from $9.1 million to $7.2 million in 2025.

Decade-old mainframes make integration with modern systems complex and costly. And sometimes, integration is simply not possible. It prevents businesses from adapting to changing business needs.

At present, businesses need mainframe data and functions to work with web, mobile, and cloud apps to improve efficiency and connect with their customers.

Mainframe modernization resolves integration challenges using APIs. It helps businesses stay relevant and agile.

The performance of decade-old mainframes becomes sluggish. You may notice longer response times, decreased throughput, and batch processing windows exceeding SLA limits.

However, modernization can help cope with performance challenges. Refactoring, particularly, helps remove inefficient code and enables automation of routine tasks.

Some top companies for mainframe modernization also use tools like IZTA. It speeds up short-running queries by storing data in fast memory and finding faster ways to access it.

Legacy mainframes are monolithic. They work well for predictable workloads. But what about demand spikes? Monolithic architecture makes them inflexible and hard to scale.

Modernization helps you decompose these systems into smaller and independent parts called microservices. It enables you to add more instances of components as demand grows.

Technical debt is the “cost” of workarounds or delaying proper updates in the mainframe. These modernization delays make changes risky and slower due to unfamiliar dependencies.

Mainframe modernization helps reduce technical debt by improving documentation, removing dead or redundant code, and refactoring tangled dependencies. The end result? Better code quality and more maintainable mainframe systems.

Security and compliance are the biggest concerns with mainframe systems. According to the 2025 BMC Mainframe Survey, 59% of respondents say security and compliance are their top priority for modernizing mainframes, with cost optimization coming in second.

Outdated apps are vulnerable to modern security attacks. On top of that, many compliance requirements are near impossible to meet with an outdated mainframe. How will it impact your business?

Operational downtime, heavy fines, a dark stain on your reputation.

Modernizing mainframes improves security and compliance. It lets you add modern authentication, encrypt data, and automatically check for vulnerabilities.

Since you are more interested in learning about mainframe modernization techniques, we are assuming you are already familiar with “what is mainframe modernization?” If not, check out our guide to cover the basics first.

There are seven mainframe modernization approaches. These approaches are also known as the 7 R’s of mainframe modernization.

Let’s take a look at each modernization technique and find out what it is and when it’s best to use it.

Refactoring is a process of restructuring and optimizing code without changing its functionality.

This includes modernizing the codebase architecture and breaking monolithic applications into microservices while keeping the core logic intact.

This strategy may help businesses reduce technical debt, improve performance, and support integration with modern systems.

When to Refactor

• To improve code quality and integration capabilities.
• To enhance the performance and security of existing systems.
• If you want to modernize while maintaining operational continuity.

Rebuilding means rewriting the entire application from scratch using modern languages, frameworks, and architectures.

In this approach, the specifications and functional scope remain the same as the original mainframe application.

The technique helps businesses reduce the costs associated with maintaining legacy applications and implement best practices.

When to Rebuild

• Legacy code is complex and undocumented.
• The current architecture restricts adding new features.
• To eliminate technical debt.

Rehosting is a mainframe modernization technique in which outdated applications are migrated to a different infrastructure with no code changes. This approach is also known as lift-and-shift.

Rehosting helps businesses cut hardware costs, reduce their data-center footprint, and scale infrastructure more flexibly.

When to Rehost

• Need rapid migration with minimal functional interruption.
• To reduce infrastructure costs.
• Need quick wins with minimal investment.

Replatforming is also known as Lift-Tinker-Shift. It might just have given it away that it is similar to rehosting, but involves small optimizations.

This technique involves migrating applications to a new runtime platform with minor changes, without altering the core architecture.

When to Replatform

• To benefit from modern platform capabilities.
• To reduce hardware, infrastructure, and licensing costs without a complete rebuild investment.
• To move away from IMS/VSAM databases.

Replacing is a method of substituting mainframe applications with commercial off-the-shelf (COTS) software or SaaS solutions.

This strategy helps businesses move faster and keep costs predictable.

When to Replace

• Modernization isn’t enough to overcome technical limitations.
• To eliminate custom code ownership and focus on core differentiators.
• Need immediate access to modern capabilities.

In this mainframe modernization technique, your development partner analyzes your mainframe applications and shuts down those that no longer add value to your business or are redundant.

This includes proper data archival and ensuring regulatory compliance before decommissioning.

When to Retire

• ROI isn’t justified.
• Redundant or overlapping functionality exists.
• The business function that the application performs no longer exists.

Retaining means deliberately keeping the application on the mainframe while making it accessible to modern systems through APIs, web services, or integration layers.

The mainframe application continues to operate unchanged, but is wrapped with modern interfaces.

When to Retain

• Mainframe systems operate flawlessly.
• Have modern mainframe hardware.
• Performance isn’t an issue.

If you’ve been with us so far, you’re already familiar with the benefits and the different mainframe modernization techniques.

But you might still have some hesitation moving forward. Questions about the risks, budgets, and what to expect in terms of ROI are totally valid.

However, to provide you with the reassurance you need, we would love to share two real-world case studies of mainframe modernization.

Modernization Approach

Refactor (Automated refactoring from COBOL to Java)

Challenge

The U.S. Air Force faced challenges, including rising operating costs, a shortage of skilled mainframe talent, and limited integration and analytics capabilities.

Solution

To address these issues, it modernized its 54-year-old Standard Base Supply System, known as “The Beast.” The company used automated refactoring tools to convert COBOL code to Java, and then migrated to the cloud.

Outcomes

• 82.7% reduction in annual system operating costs.
• $25 million saved annually.
• 92% faster IT response to changing business needs.

Modernization Approach

Rehosting (Virtualization to AWS Cloud)

Challenge

Kmart Australia faced challenges with flexibility and business agility. They were unable to meet growing business needs and customer expectations.

Solution

Kmart adopted a ‘cloud-first’ strategy and migrated its 30 mainframe applications to the cloud.

Outcomes

• Annual operational cost savings of over $4 million.
• Estimated $30-$40 million in total savings over five years.
• Enabled business scaling and store network growth that was impossible before.

Note that these are just two of the many mainframe modernization case studies available online.

But what matters most for successful modernization is choosing the best mainframe modernization strategy and partner. And when it comes to a partner, who better than Code District?

Code District has been helping businesses modernize their mainframe applications for nearly a decade.

Our experts work with you to identify the mainframe modernization technique that best fits your business and delivers the highest return on investment.

We can help you reduce maintenance costs, improve performance, and be agile.

Downtime, disrupted operations, data loss, cost overruns? Not with us. Hundreds of big names have put their faith in us, and we delivered. We are now ready to do it for you.

Reserve your free consultation today and let us guide you on your mainframe modernization journey.