IBM sinks as Anthropic positions Claude Code as the ideal tool for code modernization

IBM is sinking as Anthropic touts Claude Code’s ability to modernize COBOL code bases.

COBOL, or Common Business-Oriented Language, is a programming language for business functions. Code written in this language has been developed and altered over decades, getting increasingly clunky and cluttered on mainframes, and the number of experts who know this language well is dwindling.

Anthropic said in a blog post that Claude Code can automate COBOL modernization, and, with the help of human judgment, migrate this code incrementally into modern languages, where it can be hosted across various cloud providers.

That is a potential threat to the likes of IBM, an architect of the COBOL system that uses the language on its mainframes for enterprises. IBM is also offering AI tools (like watsonx) to modernize COBOL code, but crucially, wants to keep the outputs running on its hardware and software.

“The strength of our Z placement fuels our flywheel for growth with its attractive 3x to 4x stack multiplier across IBM,” CFO James Kavanaugh said after the company’s latest earnings report. “Z” refers to IBM’s mainframe offerings. As such, getting and keeping customers on IBM’s mainframe is a key way the company drives revenue growth for other software and services.

COBOL is standard in many financial operations (like ATMs), as well as in government and airline systems, as Anthropic notes, so users may want to keep this code tied to one mainframe architecture for security, reliability, and speed (it’s the devil they know!) rather than migrating to a different platform.