The St. Paul, Minnesota-based startup is promoting a private cloud for mainframe shops, as well as an externally hosted Software-as-a-Service model for COBOL and z/OS compilers.

Check out the Cloud Compiling presentation from the recent SHARE conference:

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Charles Mills, the Chief Development Officer at Cloud Compiling, LLC, explained that his company’s technology saves companies money on their mainframe software licenses by moving compiles from individually licensed LPARs to a single cloud mainframe, either in a pre-existing private cloud or in the company’s software-as-a-service (SaaS) public cloud. Cloud computing-wise, the program reduces the number of platforms needed to maintain compilers, and improves standards enforcement. In addition to the cloud computing benefits, Mills noted the cost savings is a key selling point of the product.

“Customers pay a license fee for every version of every compiler in their environment, on every mainframe in their environment. This is how IBM licenses compilers,” said Mills. “So, if the customer has multiple versions of COBOL compilers in their environment, they are paying a fee for each one on each of their mainframes, based on MSU rating. With Cloud Compiling, the customer keeps the native compiler or compilers on one designated mainframe, installs Cloud Compiling on the other mainframes, and from there, the technology virtually leverages the native compiler across the enterprise. Programmers compile just like they do today, using the same compilers. We then split the monthly cost savings with the customer – they save 50% and pay us 50% of their total monthly savings.”

For customers with just one mainframe, notes Mills, the SaaS or public cloud model is utilized to similar effect in regard to savings – they split the 50% saved on their mainframe license fees with Cloud Compiling, LLC. The only difference here is that the cloud is created using Cloud Computing’s mainframe – they maintain the native compiler on their mainframe, the customer installs Cloud Compiling on theirs, and then virtually compiles as a service model – in the vein of salesforce.com. Mills also notes that there is no up-front investment in Cloud Computing, so ROI is essentially immediate.

I also talked with Mills about any security issues related to the product. Public and private cloud-wise, Mills noted that security options offered include SFTP, or FTP with TLS; VPNs; and PassTickets – IBM’s technology that safeguards passwords. In addition, for mainframes, Cloud Compiling operates on the customer’s in-place security subsystem – either RACF or others. The Cloud Computing technology excludes the use of security credentials for interactive access.

So saving money on mainframe costs sounds good, right? But lots of folks with good ideas have ended up on the wrong side of Big Blue’s legal team lately. I asked Mills if IBM might react negatively to Cloud Compiling and he did not think it would be an issue.

“We are helping IBM customers to optimize their licensing and maximize their use of Z technologies,” said Mills. ”Unlike many other companies, we are advocating the continued use of both IBM Hardware and IBM software. Our Cloud Compilers ensure you get the greatest amount of value and flexibility from the platform in general. Any technology that improves the customer’s environment has the side effect of possibly diminishing IBM’s revenues. For example, performance monitors postpone the need for CPU upgrades. For our public cloud customers, our IBM licenses allow us to offer compiling as a service –- we are really no different from any other service bureau.”

For more on Cloud Computing, here’s a video:

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Micro Focus touts that migrations to the platform in the new release are accomplished without any changes to the application code or data, and that it provides an ideal environment for migrating to and developing new mainframe applications on the Windows Application Platform.  The migration of CICS apps, among others, is aimed at mitigating risk and slashing data center costs.

“The Microsoft Application Platform offers our customers unrivalled cost and performance benefits,” said said Peter Duffell, Vice President of Strategic Partners at Micro Focus, in the announcement.  “And together Micro Focus and Microsoft have created the best solution for the migration of mission-critical mainframe applications.”

Others, though, aren’t so sure that the migration will even happen.

“The likelihood is pretty small,” said Joe Clabby, President of Clabby Analytics, an IT research and analysis firm.  “It’s a completely different type of system you’re asking people to move to.”

The payroll system is built on COBOL. And as a public-sector consulting firm CEO says in the Sacramento Bee story, COBOL programmers are hard to find. Some of those who came out of retirement to program COBOL part-time for the state were laid off. Others might ditch the state job and go looking for real money. From the Sacramento Bee story:

“COBOL programmers are hard to come by these days,” said Fred Forrer, the Sacramento-based CEO of MGT of America, a public-sector consulting firm. “It’s certainly not a language that is taught. Oftentimes, you have to rely on retired annuitants to come back and help maintain the system until you’re able to find a replacement.”

Retired state employees who have returned to work part-time for the state were among thousands of workers laid off last week.

Forrer said the system has tens of thousands of lines of code, so it is time-consuming to find and replace salaries for each job classification on an individual basis.

If Schwarzenegger wants the changes in payroll to be made, he’s going to have to start rehiring some of the COBOL programmers he fired. And I doubt they’ll be accepting minimum wage. Here are some selected comments from Slashdot:

First this:

There are plenty of COBOL Programmers out there, the problem is nobody in IT wants to hire old people.

And a response:

no – the problem is that no one wants to be paid minimum wage to program COBOL

And another response:

no the problem is social security pays more so why go back to 40 hours weeks of coding at that rate!