IBM Mainframe Tutorial

People are often surprised when presented with the evidence for COBOL's dominance in the market place. The hype that surrounds some computer languages would persuade you to believe that most of the production business applications in the world are written in Java, C, C++ or Visual Basic and that only a small percentage are written in COBOL. In fact, the reverse is actually the case.

One reason for this misconception lies in the difference between the vertical and the horizontal software markets.

In the vertical software market (sometimes called "bespoke" software) applications cost many millions of dollars to produce, are tailored to a specified company, encapsulate the business rules of that company, and only a limited number of copies of the software may be in use. A good example of this kind of application is the DoD MRP II system. This system is "used to manage almost 550,000 spare and repair parts and equipment items with an inventory value of $28 billion. The system runs on Amdahl mainframes at multiple locations throughout the U.S. and contains over 4,000,000 lines of COBOL code." [http://www.uppermohawkinc.com/corporate_capabilities.htm]

In the horizontal software market, applications may still cost millions of dollars to produce but thousands, and in some cases millions, of copies of the software are in use. As a result, these applications often have a very high profile, a short life span, and a relatively low per-copy replacement cost. The Microsoft Office suite (Word, Excel, Access) is an example of an application in the horizontal software market. Because of the highly competitive nature of this marketplace considerations of speed, size and efficiency often make languages like C or C++ the language of choice for creating these applications.

Applications written for the vertical market, on the other hand, often have a low profile (because they are usually written for use in one particular company), a very high per-copy replacement cost, and consequently, a very long life span. For example, the cost of replacing COBOL code has been estimated at approximately twenty five dollars ($25) per line of code. At this rate, the cost of replacing the DoD MRP II system mentioned above, with a system written in some other language, would be some one hundred million dollars ($100,000,000). The importance of ease of maintenance often makes COBOL the language of choice for these applications.

The high visibility of horizontal applications like Microsoft Word or Excel persuades people that the languages used to write these applications are the market leaders. But however many copies of Excel are sold, it is just a single application produced by a limited number of programmers. Many more programmers are involved in coding or maintaining one off, "bespoke", applications. And these programmers generally write their programs in COBOL.