The purpose of this blog is to alert IBM i users planning server upgrades how essential it is to research software transfer fees they may incur when they move to a server with a new serial number.
Disclaimer: iSeries and AS400 are servers. IBM i is an operating system. I use them interchangeably to help folks easily find this information on the web.
Many IBM i (iSeries/AS400) users are considering changing their legacy POWER server because IBM announced hardware and software support expirations as well as software providers who may no longer support older versions of their applications.
So, if you can no longer get IBM hardware support, IBM software support or application support from your software vendor you have to start evaluating your options.
Most IBM i users I talk to only consider major hardware upgrades every 7-15 years. In other words, they don’t do it every day.
Because they don’t do it every day, they generally think the first thing to do is to get a price for a new server or figure how much it may cost to host in the cloud. Right?
Not so fast.
The MOST important next step is to find out what your applications software vendor may charge to transfer your software licenses to a new server.
The reason this is SO IMPORTANT is your license transfer costs can EXCEED any hardware quote. And by a LOT!
I see this practice of exorbitant license transfer costs all the time because every day I work with clients who are making server changes that will require NEW serial numbers. And, YOUR software is generally licensed to your POWER server by serial number.
It is vital to understand that when you move to a new POWER server – be it on premise or hosted – your new server has a new serial number.
So when that happens, you MUST find out what is involved with moving your software to a new serial number.
While many IBM i software providers charge no or small transfer fees, some software providers charge BIG fees. Some transfer fees are simply outrageous.
One company I am working with runs a mature and heavily customized manufacturing solution that has been off maintenance for over a decade. Their software provider used to be easy to work with — until it was acquired by a really BIG software company (you may be able to guess who). The new software owner wants $300,000 for a software key to move to a new POWER server! OMG.
Two small businesses I consult run IBM i General Ledger/Payroll software (owned by that BIG software company). This BIG software company demanded $30,000 to transfer the software to a new entry level IBM i POWER server. And, these users had kept their BIG software company software support current!
Well, those software transfer fees KILLED these IBM POWER deals. Outraged, these clients have determined they can get by with QuickBooks for General Ledger and Payroll.
[This BIG software company’s practice of outrageous transfer keys really upsets me as I sense this behavior shrinks the IBM i install base. That is just plain bad for all of us.)
Please be aware of two more factors:
- Your software provider may charge a software transfer fee when you upgrade your IBM iOS level (say, from V5R4 to V7R2).
- Your software transfer fee may depend if you have software support…or if you no longer have software support.
Here’s the point — Find out your application software transfer fee BEFORE you start thinking about shopping for a server change.
The software transfer fee may be the most expensive line item cost you will have for a new server.
Best to find out early what it is. If it is acceptable, then shop for your IBM i POWER options.
If the cost is unacceptable, start your search for new applications alternatives.
You may find a cost-effective alternative to paying outrageous fees.
If you cannot find cost-effective alternatives, hopefully you are better armed to negotiate a more favorable transfer fee.
If you need help negotiating a software transfer fee, call Bob Losey at 714-593-0387 or email me at blosey@source-data.com.
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