TL:DR
- Banks face mounting challenges with on-premises data centers including power constraints, operational costs & regulatory requirements driving data center exit strategies.
- Deploying IBM z17 mainframes in an Equinix data center enables banks to modernize core systems while maintaining hybrid multicloud architecture with secure interconnection capabilities.
- This approach shifts banks from CAPEX to OPEX model while delivering AI capabilities, sustainability compliance & seamless integration with cloud services.
For banks, the public cloud is a natural fit for their digital front end. By building cloud native apps with Kubernetes, APIs and microservices, they can support modern developments like mobile and open banking.
However, the public cloud typically isn’t right for their core back-end applications. Most banks still run these apps in on-premises data centers, which they own and have struggled to keep up to date with the latest demands for efficiency, power supply, and cooling technologies. Over the years, banks have struggled to apply a clear strategy to their digital infrastructure, often accumulating multiple data centers across many locations through mergers and acquisitions.
Due to a wide range of mounting challenges, including power constraints and escalating operational costs, the need for advanced AI capabilities, and increasingly stringent regulatory and sustainability requirements, many CTOs and CIOs have realized that they want out of the data center business. They’re looking for other options, but wherever they go, they’ll still need their mainframes: the home of their core banking applications and data.
They use mainframes for everything from hosting bank accounts and loan books to running ATMs to processing payment transactions. Unlike with front-end applications, the risks and costs involved with moving the crown jewels of the mainframe onto the public cloud are far too great. Instead, as banks begin to exit their data centers in greater numbers, many of them are moving to a colocation data center to help optimize their hybrid multicloud architecture.
Rather than posing a daunting challenge, exiting on-premises data centers can be the catalyst for a transformative journey. By using the move as an opportunity to upgrade their mainframes to the latest offerings, hosted in a colocation environment that they configure to their specific needs, banks can create an optimized hybrid architecture where different applications run in the environments that are best suited to support them.
Banks unlock real value when migrating to IBM z17 at Equinix
Equinix and IBM have collaborated to deliver a powerful new solution that supports holistic infrastructure modernization, while also helping banks achieve their compliance and sustainability goals. Migrating to IBM z17 as part of a move to an Equinix IBX® colocation data center unlocks the true ROI of a bank’s data center exit by modernizing their mainframes at the same time.
With IBM z17 hosted at Equinix, our clients can gain high-reliability data center and interconnection services alongside integration into hybrid cloud environments supported by Equinix’s interconnection capabilities. It’s a viable option for banks with existing public cloud and private cloud environments that are looking to exit their own data centers.
Let’s take a closer look at the combined benefits of this next-generation solution, and how each addresses the challenges facing banks in today’s environment.
Optimize cost and efficiency through consolidation and shift to OPEX
As constraints on power and space continue to grow, banks are facing pressure to operate more cost-effectively. This pressure has become a leading driver of infrastructure migration across the financial landscape.
Transitioning from on-premises data centers to colocation helps customers move from large upfront CAPEX investments to predictable monthly OPEX costs. This improves overall financial flexibility while also providing access to a dense ecosystem of industry partners and service providers.
Rather than simply relocating their existing mainframe infrastructure, organizations can use this migration as an opportunity to replace existing x86-based compute and storage with IBM z17 mainframes, driving further cost savings.
IBM z17 platforms are engineered to sustain very high levels of CPU utilization while maintaining predictable performance, unlike typical x86 architectures that often experience performance degradation as utilization increases. Contrary to popular belief, many banks are actually bringing more applications to run on their IBM Z mainframes.
Banks can also achieve significant space and power savings by using IBM Z to support their AI strategies. A single IBM z17 can replace up to 2,944 x86 cores, and organizations can cut power use by up to 83% compared to x86 when running AI-enhanced OLTP workloads.[1]
Unlock advanced AI capabilities close to mission-critical data
Beyond a host of other operational advantages, banks can unleash the full power of AI by deploying IBM Z at Equinix.
With IBM Telum II processors and integrated IBM Spyre accelerators delivering 24 trillion operations per second (TOPS)[2], IBM z17 delivers exceptional performance for AI and other advanced compute workloads, supporting containers and modern environments for mission-critical applications.
Additionally, when hosted in one of Equinix’s 280 AI-ready data centers, IBM Z enables banks to perform AI inference close to data sources and reduce latency by avoiding offloading to external platforms. This is ideal for financial workloads such as payments, risk and lending, and it is built to help banks accelerate innovation without sacrificing security or reliability. It’s key for banks looking to perform inference at scale and move advanced AI use cases from testing into production.
Seamlessly integrate mainframe workloads with public cloud services
A hybrid multicloud approach is key to digital transformation for banks. It allows them to optimize proximity and low-latency connectivity between the mainframe and its affinity apps using cloud-adjacent private infrastructure.
To support banks on this critical journey, Equinix provides a market-leading portfolio of native cloud on-ramps to all major cloud providers including AWS, Microsoft Azure, and Google Cloud. Equinix data centers are also home to local financial ecosystems, allowing banks to connect with business partners and access services quickly and securely.
Additionally, Equinix Fabric®, our virtual interconnection solution, provides the secure, low-latency connectivity that banks need to build future-ready hybrid architectures that combine mainframe stability with cloud agility. Banks can now integrate their core systems with cloud-based applications, APIs and microservices, supporting everything from mobile banking to advanced analytics.
Hybrid architecture for banks at Equinix, featuring IBM mainframes and multicloud connectivity
Pursue sustainability and regulatory compliance
As a final benefit, the collaboration between Equinix and IBM can help today’s banks navigate an increasingly complex regulatory landscape, while meeting ever-more stringent emissions standards.
Equinix and IBM are certified as critical third-party service providers under the European Union’s Digital Operational Resilience Act (DORA), in recognition of the key role that both companies play in supporting financial services entities across the EU. Equinix also supports our customers in achieving their own compliance across many different jurisdictions. Customers benefit from our industry-standard certifications such as PCI DSS, various ISO standards, and SOC 1 Type II/SOC 2 Type II, promoting security and trust.
To support customers’ sustainability goals, Equinix data centers in EMEA and the Americas have 100% renewable energy coverage. We’ve also set a science-based target to achieve net-zero emissions by 2040. Migrating workloads from a bank’s own data centers to Equinix colocation shifts emissions from Scope 1 into their Scope 2 or 3 emissions, which could help them meet their near-term emissions targets faster.
Finally, IBM Z offers advanced security features and certifications, including Keep Your Own Key (KYOK), FIPS 140-2 Level 4 HSM, and integrated encryption stacks, making it the most secure platform for regulated industries.
Modernize with Equinix and IBM today
The work between Equinix and IBM reinforces a powerful truth: Modernization isn’t just about technology, it’s about strategy. By combining IBM z17’s unmatched performance and security with Equinix’s multicloud connectivity and sustainability leadership, banks can turn their IT infrastructure challenges into a competitive advantage.
Learn how one financial institution modernized its technical estate with help from Equinix and our partner ecosystem: Read the Innovation Federal Credit Union case study.
[2] New Telum II Processor and IBM Spyre Accelerator: Expanding AI on IBM Z and IBM LinuxONE
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