Should save £17 million a year, plus support AIOps and automation
BT has signed new deal with Kyndryl, which specialises in managed infrastructure services and was spun out of IBM in 2021. At the moment Kyndryl services BT’s mainframe applications that run its consumer broadband and copper local loop.
Under the new contract, it willwell h help BT’s Digital unit as move “critical legacy applications that cannot be shut down in the short term to the cloud” under the terms of the new 10-year partnership, although moving the unspecified applications to the cloud should be completed by 2026.
This should enable BT to reduce operating costs and energy consumption by 70%.
The projected savings from the latest move with Kyndryl are £17 million (€19.32 million) annually in operating expenditure.
Some applications will be retired – BT’s target is to have fewer than 500 strategic systems by 2027 to simplifying its technology estate – others refactored, that is, redeveloped to fit into BT Group’s strategic systems and architecture. Still others are to be rehosted, that is, repackaged to operate in a cloud environment.
In all cases, the idea is to digitalise applications and increasingly use APIs and microservices to help integrate data across wider BT Group systems, and support innovation through automation as well as lower costs.
Applications “will be hooked into BT Group’s service management platform, and support its AIOps self-healing IT estate model, reducing the risk of downtime and accelerating and automating fixes,” the press statement reckons. The model involves ServiceNow running on Google Cloud Platform.
This should mean applications can call on data and capabilities from across other mainframe applications for better customer experience, and in particular, eventually help migrate customers to fibre from the copper local loop.
Harmeen Mehta, Chief Digital and Innovation Officer at BT Group (pictured) said, “We like thinking out of the box to solve complex problems – like how to move off mainframes given the prohibitive increase in legacy infrastructure cost – without rewriting decades-old applications.
“With that mindset, working with Kyndryl, we figured out how to turn legacy mainframes into modern digital apps and run them at a fraction of the cost.”
There are no details about how many or which specific applications are involved, or which cloud platform(s) will be involved, but BT did sign up AWS last year as its preferred cloud provider in May last year to help it save £2 billion a year.
Wider movement to save
Last November, BT announced its pre-tax profits had fallen by 18% to £831 million year on year for the H1. BT Group’s CEO Philip Jansen said he wanted to find a further £500 million in savings by 2025. This is a 20% increase on the target he’d set of £2.5 billion when he assumed the role in early 2019.
The savings are to be invested in building out FTTH. BT was very late to the fibre broadband party as along with other major European operators, most notably Deutsche Telekom, it preferred to stick to squeezing every penny out of its copper local loop.
With the pandemic adding impetus, this resulted in a frantic effort across much of Europe to catch up countries with more advanced fibre infrastructure, with Spain leading the pack in the larger countries.