The purpose of this blog is to report that IBM i cloud hosting seems to be more popular than on premise servers for IBM i users that need to consider replacing their server when their support expires in 2019. The insight comes from others which confirm what I have experienced.
Disclaimer: I use IBM i, iSeries and AS400 interchangeable. To be clear, IBM i is an operating system. iSeries and AS400 are servers. I use them interchangeably to make it easy to find related information with web searches.
What Are IBM i Users Up To?
Well, those on back-level servers faced with End of Service in 2019 are actively evaluating their options.
Clearly, this group includes POWER4 (and older, all will no longer have IBM hardware maintenance options), POWER5, POWER6, and POWER7 8202-E4B and E4C.
One would expect that they would simply upgrade to POWER9, the newest most powerful IBM POWER server yet.
Not so fast.
Surprisingly, many are seriously considering cloud hosting.
I have talked to several marketing individuals hired to call IBM 8203 and 8202 users to promote POWER9. (I will let you guess who has hired these lead generators. The answer is pretty simple.)
What they told me was that about 3 out of 4 IBM i users favor going to the cloud!
I share this because I doubt that this insight is ever shared in any trade journal or most common articles about IBM i.
It also is consistent with what I have been hearing since Memorial Day 2017.
So, why the keen interest in IBM i hosting instead of a new on premise POWER9?
I hear several key themes when talking to IBM i users and experts.
First, many of the IBM i experts (IT managers, programmers, and consultants) are at the age of retirement. As a result, the pool of IBM i experts is shrinking. It is far easier for a POWER user to outsource than search for and vet replacement talent. So, IBM i cloud hosting offers outsourced, competent IBM i expertise.
Second, for a variety of reasons (not all of them good), IBM i users are leaving the POWER platform in favor of other business software. While many of the new solutions described to me fall way short of the stability, robust features and tailoring that currently run their business, newer management compels them to leave the platform. I often hear the reason is based on the number of IT experts that know Windows, Unix or Linux is vastly bigger and less expensive than the shrinking and more expensive IBM i expertise.
This means if a POWER user is moving away from IBM i to a new platform, this user would rather “rent” only as long as needed (1-3 years) instead of buy (a capital investment, which implies a 5-9 year asset life).
So, it is easier to host with a flexible term with the “certainty” that the new system will be in place in 1-2 years, and then can discontinue hosting.
Third, perhaps less obvious to most users, is that many vertical software providers are promoting hosting instead of an on premise solution for several reasons.
Like Salesforce.com that pioneered Software as a Service (SAAS), SAAS offers an independent software vendor (ISV) predictable revenue in addition to annual support.
Many ISVs have struggled because they cannot rely on the annual software support as they compete for users that migrate away from the IBM i. On the other hand, if their client moves to a hosted environment, they can count on a longer life with the client who will pay for annual support and future software upgrades.
It also makes them more valuable to future buyers when the ISV may want to sell their business.
To sum it up, I was surprised when the marketing people I talked to told me that 3 out of 4 prospective POWER9 buyers are favoring a hosted solution over an on premise solution. While it is consistent with my conversations with prospective clients, it is the first independent corroboration of what I have experienced.
What I hear as the three most common reasons to host:
1) outsource IBM i expertise,
2) short-term rental of IBM i as a new software solution comes online,
3) ISV promoting hosting.
I guess hosting is here to stay!
Interested in learning more about how IBM i Cloud Hosting can help your operation? Email me at blosey@source-data.com or call me at 714-593-0387.
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