Case Study – IBM Licensing Optimization: Mizuho Financial Group Saves $71M on IBM Mainframe Licensing
Background
Mizuho Financial Group, one of Japan’s largest financial institutions, operates a global banking network across corporate, retail, investment, and asset management services.
With over 60,000 employees and a technology footprint spanning Asia, the U.S., and Europe, Mizuho manages vast volumes of transactional data, regulatory reporting, and real-time core banking operations.
For decades, IBM mainframe infrastructure has been a critical foundation for Mizuho’s backend systems. The bank licenses a significant portfolio of IBM z/OS-based software, including DB2, CICS, IMS, MQ, and various proprietary IBM middleware. These environments run on high-capacity zSeries systems across global data centers.
By 2023, Mizuho’s IBM mainframe licensing and support costs had reached unsustainable levels. The institution engaged Redress Compliance to conduct a comprehensive licensing and contract analysis, aiming to reduce costs without compromising regulatory, performance, or security requirements.
The result: an unprecedented USD 71 million in verified licensing and support savings, achieved through rightsizing, workload realignment, and contract optimization.
Challenges
Despite a highly mature IT and procurement operation, Mizuho faced numerous challenges typical of large-scale IBM mainframe environments:
- Complex Licensing Metrics: IBM mainframe software is priced using MLC (Monthly License Charges) and custom metrics tied to usage peaks, processor capacity, and software classifications—making license optimization difficult without specialist expertise.
- Siloed Workloads: Applications running on the mainframe spanned business units and decades, many of which consumed licenses disproportionate to their value or load.
- Inefficient Workload Management: Batch jobs and production systems were not aligned to peak usage periods, resulting in inflated MLC bills.
- Rigid Contract Terms: Mizuho had long-term IBM licensing agreements that included bundled software, limited termination flexibility, and outdated product structures.
- Vendor Pushback: IBM consistently proposed “solutions” that involved moving workloads to cloud subscriptions or committing to bundled license renewals, without addressing root cost issues.
The bank required a strategy that would safeguard mission-critical mainframe performance while achieving meaningful, defensible, and long-term cost reductions.
How Redress Compliance Helped
Redress Compliance deployed its Mainframe Cost Optimization Program, designed specifically for regulated enterprises with large IBM z/OS deployments.
1. Full Licensing & Workload Assessment
Redress began with a deep dive into Mizuho’s IBM entitlements and real-world usage:
- Mapped entitlements across DB2, CICS, IMS, MQ, and other MLC and IPLA components
- Analyzed peak rolling 4-hour average CPU usage and software reporting cycles
- Audited workloads and batch processing timelines to identify capacity spikes and inefficiencies
- Reviewed IBM contracts, bundling, and renewal schedules to pinpoint leverage points
This phase revealed that a significant portion of Mizuho’s mainframe software was over-licensed, misaligned, or priced inefficiently based on configuration and usage timing.
2. Optimization Strategy and Cost Modeling
Redress developed a multi-track optimization roadmap, including:
- Workload realignment, moving batch jobs away from peak periods to reduce peak MLC metrics
- Rightsizing of license allocations, ensuring high-cost products like DB2 and IMS were only allocated to nodes where required
- Decommissioning of dormant products, including software modules under support that were no longer in use
- Reconfiguration of LPARs to optimize sub-capacity usage
- Contract restructuring, including removing bundled software and reclassifying product usage categories for pricing relief
All optimizations were fully supported by IBM documentation and license terms—ensuring compliance and audit defensibility.
3. Renewal Strategy and Negotiation Support
Redress worked with Mizuho’s procurement and legal teams to:
- Build a commercial negotiation plan based on the optimized baseline
- Reframe renewal conversations around accurate, reduced usage—not IBM’s inflated assumptions
- Push back on bundled renewals and convert to lower-cost pricing models where applicable
- Ensure that future licensing flexibility is baked into revised contract terms
Outcome and Impact
The engagement delivered historic savings and strategic impact:
- USD 71 million in total savings over 5 years, broken down as:
- ~$15M in annual MLC reductions
- ~$5M in avoided renewals and unbundled software components
- Improved commercial terms and pricing flexibility for future IBM negotiations
- No disruption to core banking operations or regulatory compliance
- Zero audit exposure, with all optimizations contractually and technically validated
- Sustainable internal governance, including workload placement policies and reporting controls
- Renewed negotiating power with IBM and roadmap alignment with IT leadership
Mizuho can now operate its IBM mainframe infrastructure at enterprise scale without the legacy cost burden.
Client Quote
“We knew our IBM mainframe spend was too high, but we lacked a clear path to reduce it without risk. Redress Compliance changed that. They translated the complexity into actionable strategy—and helped us secure $71 million in savings. Their team worked seamlessly with ours and protected every business-critical system along the way.”
— Head of Global IT Procurement, Mizuho Financial Group
Call-to-Action
Is your IBM mainframe licensing out of control? Redress Compliance helps financial institutions, such as Mizuho, achieve significant cost savings without compromising compliance or performance.
Schedule your IBM mainframe cost optimization session today.
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