They were probably promised a very low price for their first few years, before their cloud costs get re-negotiated. Once they are locked in, the cloud cartel can jack up their price to make sure they get as much money as possible.
But also, mainframes are extremely expensive, so they can probably do better on commodity hardware. The cloud is a way to rent a lot of commodity hardware.
The big-brained move that they are almost certainly not doing is to use cloud services to bridge the retirement of their mainframes and move everything back on-prem with Linux boxes in 5 years.
> They were probably promised a very low price for their first few years, before their cloud costs get re-negotiated. Once they are locked in, the cloud cartel can jack up their price to make sure they get as much money as possible
People often say that, but that literally has happened once, with GCP, and has no relation to how AWS and Azure do things. Please go and find an example in the 10+ years that AWS have been a big serious contender for the world's IT workloads of them jacking up prices.
But also, mainframes are extremely expensive, so they can probably do better on commodity hardware. The cloud is a way to rent a lot of commodity hardware.
The big-brained move that they are almost certainly not doing is to use cloud services to bridge the retirement of their mainframes and move everything back on-prem with Linux boxes in 5 years.