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Angel Investor (Individual)

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Investments

2

Portfolio Exits

1

About Michael Abbott

Michael Abbott is an angel investor who generally invests upto $25k in young, emerging companies. Abbott aims to assist portfolio companies through efforts and expertise focused on building/recruiting engineering teams and technical advisory work in the area of 'big data'.

Michael Abbott Headquarter Location

San Francisco, California,

United States

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Latest Michael Abbott News

Breaking the mainframe habit: Banks consider a cloud future

May 17, 2022

Cloud powered the move to mobile banking — transitioning core applications off of legacy systems may be a heavier lift. Published May 13, 2022 First published on CIOs at banks have long adhered to a version of the Hippocratic Oath: “Do no harm. Don’t touch that thing. It’s working,” said Michael Abbott, senior managing director and global banking lead for consulting firm Accenture. Mainframe computers had been the beneficiaries of that tenet until recently, but that appears to be changing, according to recent research by Accenture . The report found a significant shift in the dominant thinking about migration away from mainframes and to the cloud within the banking sector. Four in five of the 150 banking IT executives surveyed by Accenture plan to migrate mainframe workloads to cloud environments. Most of those surveyed report they aim to make this shift in the next two to five years. A similar Accenture study carried out two years ago  found that only 20% to 30% of banks had committed to moving core functions from mainframes to public cloud. “They were still thinking hybrid,” said Abbott. “And hybrid is code for on-prem.” A significant move away from hybrid models is underway, Accenture found, with only 31% of the survey’s respondents expressing a preference for splitting the workload between mainframe and cloud. Risk aversion, regulatory compliance issues, cybersecurity concerns and the investment of time, staff, and capital required to move core functions to the cloud are pressing concerns for companies eying a more complete cloud migration. Mainframe maintenance, the limitations of on-site computing and the potential opportunity costs of a business-as-usual approach to IT have made cloud solutions increasingly appealing to banking executives. “Our research shows most banks are spending more on mainframe maintenance each year,” said Abbott. “And it also shows that their intention is to move much of their core operations to the cloud in a methodical way over the next five years." A confluence of cloud catalysts For the past decade, banks took a slow and steady approach to the cloud, migrating specific applications and services, such as mobile and online banking. Core functions — record keeping, number crunching, fraud monitoring — remained on mainframes, the workhorses of the industry. “Cloud is an experience not a destination,” said Barry Baker, the VP leading offering and product management for IBM Z and LinuxONE. “A lot of the largest banks in the world that we work with are on a journey around hybrid cloud.” Advances in cloud capabilities, coupled with pandemic-induced operational disruptions, have led banking executives to a more aggressive stance on cloud migration. Prior to March of 2020, for example, call centers and the sizable IT systems supporting those operations were housed on site. When pandemic shutdowns necessitated remote work, those call centers provided a lesson in what could be accomplished quickly via the cloud. In two to three weeks, banks transitioned to virtual call centers, according to Abbott. “Once the executives saw that, they never wanted to go back from that speed of operation.” At the same time, mainframe maintenance costs had made migration a more appealing option. Of the banks surveyed by Accenture, for example, 91% reported that mainframe maintenance costs had gone up over the past five years. The COBOL conundrum and other cloud hurdles This is not the first wave of banking industry enthusiasm for the cloud. It is also not the only threat mainframes have faced as a result of technological progress. “A few decades ago, client servers were going to take on the workload and do away with this platform,” said Baker. “Then, the world of mobile was going to take over. The world of mobile created tremendous growth for us. Public cloud is the next platform, and we embrace it. It is driving growth for us as well.” Significant growth in mainframe usage – a 350% increase over the last decade, according to Baker – is just one reason IBM is optimistic about the future of the platform. There are a number of psychological and functional hurdles banks will have to overcome in order to move core operations to the cloud and break the mainframe habit. A 2020 IBM report  found that 44 of the top 50 banks relied on mainframe computing. One of biggest practical hurdles involves the baseline logistics of transferring years and years of data and code from one platform to another. “Some of these large banks are running 300 million lines of COBOL code as their core banking solution,” said Baker. “That core banking solution has been architected and developed to conform to the architecture of the mainframe, and that has taken decades to accomplish.” While Baker likens full migration of core operating systems as an expensive and time-consuming process of “reinventing the wheel on a different architecture,” Abbott sees value in the investment required to move COBOL onto cloud-compatible platforms. “Move it off the mainframe into [cloud-compatible] x86 [architecture] and you’ve got an environment that’s probably 50% cheaper,” he said. Abbott also points to the advantage of being able to access GPU farms for AI/ML risk modeling through the cloud. What does seem clear from the Accenture report is that, as technology requirements grow, banks will have the opportunity to explore various options for integrating cloud-based solutions with existing mainframe architectures. Baker explained that many of IBM’s clients already use a combination of AWS, IBM cloud, and mainframe computing, emphasizing that it does not have to be an either/or proposition. “We want to maximize the value that they are getting from the combination of all of those things,” he said. “You are going to get that by way of a best-fit platform approach that results in a heterogeneous environment.” Abbott drew on a baseball metaphor. “We’re in the first inning right now,” he said. “I'm not even sure we’ve even been at bat yet, at least not fully. But the teams are lined up, and they're ready to go. So, this game is going to be played.”

Michael Abbott Investments

2 Investments

Michael Abbott has made 2 investments. Their latest investment was in Locu as part of their Seed VC on September 9, 2011.

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Michael Abbott Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

9/7/2011

Seed VC

Locu

$0.6M

Yes

3

2/3/2011

Series A

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$99M

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10

Date

9/7/2011

2/3/2011

Round

Seed VC

Series A

Company

Locu

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Amount

$0.6M

$99M

New?

Yes

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Co-Investors

Sources

3

10

Michael Abbott Portfolio Exits

1 Portfolio Exit

Michael Abbott has 1 portfolio exit. Their latest portfolio exit was Locu on August 19, 2013.

Date

Exit

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Acquirer

Sources

8/19/2013

Acquired

$99M

2

Date

8/19/2013

Exit

Acquired

Companies

Valuation

$99M

Acquirer

Sources

2

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