Discover the Proven IT Investment Patterns Behind Hybrid Cloud Success

The Data Behind Best-in-Class IT Strategies 

Where do the best business insights come from? The answer lies in careful analysis of data—lots of data in my case.  

As a technology economist, I thrive on analyzing vast pools of data. So, when investigating which technology platforms fuel the success of industry-leading companies, I turned to what I know best—the data. 

My research over several decades across 2,400 leading companies reveals a distinct trend. Top performers display a predictable and consistent pattern of investment in the IT platforms making up their hybrid environments that directly correlates with business success.  

The Birth of Technology Asset Class Optimization 

Two years ago, I teamed with Broadcom to explore this connection more deeply. This collaboration led to my study into a groundbreaking economic model I call Technology Asset Class Optimization. 

The model treats cloud, mainframe, and distributed servers as distinct technology asset classes similar to the approach one takes to guide their personal financial investments. Drawing from my experience advising businesses and governments globally, I based the model on three core principles: 

1. Each asset class has its own profile of returns and risk
2. Asset class selection should align with strategic goals 
3. The best-performing portfolios maintain a balanced, hybrid approach 

I ​have built and ​leverage the world's largest business and technology dataset. This data helps business executives evaluate their technology investment ​with more in-depth insight to help them achieve measurably greater success​. 

The Technology Asset Class Optimization model makes this task even easier and more intuitive by applying the same logic and framework people use when managing their financial portfolios. 

Clear Distinctions Between Top Performers​ and Those That Fall Behind​ 

My initial 2023 report revealed a clear pattern. Top performers across industries incorporated more cloud and mainframe capacity in their hybrid environments compared to average performers. 

The best-in-class organizations consistently demonstrated an IT mix with approximately 10 percent more cloud ​– ​and 10 percent more mainframe than their average-performing counterparts. These percentages are not mere chance. They are an optimized mix showing that the organizations are running the right workloads on the right platforms to achieve the best business outcomes.  

Three ​Top​ Trends Impacting Technology Investment 

This year's report takes a fresh look into how the world’s leading organizations have adjusted their tech stacks over the last 12+ months and highlights three significant trends reshaping the technology landscape: 

1. Technology Spending Continues to Rise
   

   Technology intensity (the relationship of both technology expense to revenue and operating expense) has more than doubled in the past 5 years in leading companies with overall global IT spend reaching approximately over $9 trillion annually. This substantial investment reflects technology's increasingly central role in business operations and strategy. 

2. IT Inflation Outpaces Overall Spending
   

   IT inflation – which was 4.8 percent in June of 2024 – has risen to 6.8 percent at the start of 2025, exceeding GDP growth, the consumer price index, and overall global inflation rates. The impact of recent tariffs on hardware, software and other components of IT expense may even drive this to 15 percent. For IT decision-makers, this represents a first-in-a-lifetime event that dramatically impacts technology investment calculations. 

3. Companies are More Selective about Public Cloud Migration

   Public cloud remains a valuable and growing part of most hybrid IT environments, but movement to public cloud has cooled as companies become more aware of the platform’s full costs and more deliberate about their workload placement choices. As cloud expenses increase, organizations have been looking for a safe harbor. Many now view the mainframe as that trusted, cost-effective option for critical workloads.

   The vast majority of compute power globally – 87 percent according to my latest study – remains on-premise. There is good reason for this. 

The Mainframe Unit Cost Advantage 

Enterprises increasingly recognize the superior unit cost efficiency of mainframe workloads compared to other platforms. The economics are compelling when examining total cost of ownership (TCO). 

For example, based on published data from 2023-2024, the average TCO for ​a ​4,000 MIPS​ environment​ is approximately $6.8 million on a mainframe at that scale but exceeds $9.5 million in public cloud environments. The public cloud calculation is based on equivalent cloud processing power and contractual rates from major providers. This differential grows substantially as processing requirements increase. At 6,800 MIPS, TCO is approximately $6.7 million on mainframe but jumps to nearly $16.5 million on public cloud.  

Essentially, for any workloads above 2,000 MIPS—the current mainframe breakeven point—the cost advantage continues to grow with scale. This represents significant improvement from last year's breakeven point of 3,500 MIPS, making the mainframe even more attractive for medium-sized workloads as well. 

The Business Benefits of Optimization 

Organizations that optimize their hybrid technology mix consistent with the Technology Asset Class Optimization model gain important efficiencies that enable them to: 

• Generate greater revenue per IT dollar spent compared to industry averages 

• Direct higher levels of IT investment toward enhancing capabilities, transforming operations, and bringing new advances to market 

• Reduce their cost per transaction (what I call the Technology Cost of Goods) 

My latest report includes data and analysis on each of these metrics. 

Interestingly, organizations that trend “mainframe heavy” tend to outperform both average performers and those with an overreliance on cloud infrastructure. This finding challenges conventional wisdom about platform selection and serves as an example of why I advise my enterprise clients to always let the data inform their technology choices. 

Looking Forward 

The Technology Asset Class Optimization model provides a framework for achieving competitive advantage through strategic platform selection. By balancing your technology portfolio appropriately, your organization can maximize returns while managing technology costs more effectively. 

For more detailed insights and analysis, I encourage you to read my latest report: Technology Investment Analysis: Linking IT Choices to Market Leading Business Performance.