The purpose of this blog is to offer clear factors when IBM i hosting makes sense as well as when it does not make sense. My hope is that readers can determine their circumstances and what works for them so they can better use their time and their company’s resources analyzing options that are best for them.
Disclaimer: iSeries and AS400 are server brand names. IBM i is an operating system, like OS400. I use these terms interchangeably to help researchers more easily find what they are looking for on the web.
Over the years I have worked with hundreds of clients to help them determine if IBM i cloud hosting is right for their operation.
Surprisingly, there are some straight-forward guidelines to help those assessing this issue to get to the right answer for them – very quickly – saving time and money in the process.
Let’s first consider those factors why hosting most likely does NOT work for you.
Why NOT Host Your IBM i Applications
1) We don’t trust the internet. In my experience there are two categories of folks that do not trust the internet:
a) “I do not want any bad players from outside my operation to hack my system.” When I hear this theme I advise them to stop any further hosting assessment. You have to use the internet to get to your hosted system. If you do not trust the internet, then do not consider hosting.
b) “The internet in our area is not reliable.” If this is the case and you DO want to host, you need to investigate internet backup options to resort to when your primary connection goes out. If a backup option is not cost-effective, do not consider hosting.
2) We want to be able to touch our server. Sometimes IBM i users just feel more comfortable that they can touch the server. They can save and restore their system in media they can handle. This group of IBM i users may never be comfortable with a system hosted hundreds of miles away and only accessible by the internet.
3) We will compare the cost of a new server with the options under evaluation. Many IBM i users just compare the cost of a new on premise POWER server. They may be unaware or unable to consider the “soft” costs that are part of the Total Cost of Ownership (TCO), which include managing backups, cost of media, taking backup tapes offsite, responding to error messages, keeping the IBM i OS current with PTFs (software patches) and Technology Refreshes (TRs), implementing and managing a Disaster Recovery plan, staying current on related and complementary infrastructure technology, improved safety and redundancy of relocating the server to a Tier III data center, and more. When businesses do not put a value on these other factors that make up the POWER server TCO, they will most likely not select hosting because hosting can appear to have a higher cost compared to the server acquisition cost.
4) We have a large in-house staff of IBM i administrative talent. If you already have a large staff of IBM i administrative experts, outsourcing to a cloud provider makes little sense unless this talent will retire or leave.
5) It is not cost-effective to move our software to a server with a different serial number. Frequently I hear of application software that has software keys that link to the current servers’ serial numbers. I have seen four reasons it can be too expensive to move to a cloud hosting provider:
a) Sometimes the software provider wants BIG BUCKS for a software transfer fee.
b) Other times, the prospective hosting client is on a back-level version of the software without software maintenance. In this case, it can be cost-prohibitive to come current on software support and pay the software transfer fee.
c) Some back-level IBM i OS applications have been so heavily customized that the cost and time to test an upgraded version of the application does not make any economic sense.
d) Sometimes users are on a back-level version of IBM i (i.e. V4R4, V5R3, etc.) and do not have source code. To move to a supported version of IBM i, a user must have source code to upgrade. Without source code, there is no way to move an IBM i user to a supported version of IBM i.
If you have any of these situations, moving to the cloud…or even a new server…may not be an option.
6) We just bought a brand new IBM POWER server in the last 2 years. If you just made a significant capital investment to get a new server, chances are you may not be able to host your application with an IBM i hosting provider…unless you may want to co-locate your server and leverage the hosting providers IBM i expertise. More commonly, a prospective user is running a server that may be 5 – 15 years old (perhaps even older) and hosting can be more attractive than a capital investment for a new server. On the other hand, if you bought a new server in the last 1-2 years, hosting most likely will not make economic sense.
7) We have a really BIG IBM i POWER server. IBM i users running P20 – P40 software tiered servers will generally not find a cost-savings when moving to a cloud provider unless those applications still needed to use a fraction of the resources of their sizeable servers. I have found that IBM i users with requirements for multiple cores, multiple LPARs each with lots of RAM memory (over 128 GB) and storage (over 5 TB) do not see savings to host with a cloud provider. On the other hand, there can be clear benefits to hosting their server at a data center with deep IBM i expertise.
If one or more of the above characteristics seems to fit your circumstances, IBM i cloud hosting is probably not right for you.
Now, let’s consider those factors that favor IBM i cloud hosting.
Why Host Your IBM i Applications
1) We need IBM i expertise. I talk to many IBM i users that have little-to-no in-house IBM i skills. The most common reasons include retiring IBM i talent, shrinking pool of IBM i talent from which to recruit, or the in-house technology backgrounds do not include IBM i. And there are still IBM i applications needed to support the business. Outsourcing your IBM i applications to a skilled and experienced IBM i hosting provider can be a safe and cost-effective way to satisfy this need. A qualified IBM i hosting provider will manage all aspects of the IBM i infrastructure, including daily tape backups, keeping the IBM i OS up to date with upgrades and software patches, monitoring and attending to IBM i error messages, and more.
2) We want to focus on supporting our IBM i end-users instead of dealing with IBM i administration and maintenance issues. While this reason may sound similar to the first one I just mentioned, the difference is the IT application team wants to spend their time rolling out new features, enhancing current functions and providing support for the end-users. In such cases, their application skills have a bigger impact with the user community than their administrative skills. Again, this is a solid and cost-effective reason to host IBM i applications.
3) We need flexible, short-term access to newer IBM i technology and we cannot justify a capital expenditure for new equipment. I have seen several variations of this need.
a) We are transitioning from our IBM i applications to new technology. Some IBM users are moving from their legacy IBM i ERP software to a different ERP solution. They plan to sunset their IBM i applications… they just don’t know when. They need access to their legacy IBM i system in parallel on flexible terms until they go live on the new system.
b) We need to maintain our legacy system for compliance. We have many customers that must retain access to their legacy IBM i system to comply with government regulations.
c) We want to offer our customers our Software As A Service (SAAS). Many software developers have IBM i cloud providers host their clients. This is a very competitive way to win and support new clients so they do not have to buy a server and the software team can focus on software development and support, not diluting their skills with hosting.
d) We want to test and develop software. We have many software developers that need a flexible way to test, develop and support their application software.
e) We have a short-term for testing. A number of clients come to us to test their software on a specific IBM i OS version or test a version upgrade without impacting their production environment.
4) When we compared the Total Cost of Ownership (TCO) of hosting to buying a new server, hosting was more cost-effective. Many IBM i users find that hosting can be more cost-effective than buying a new server. They compare the monthly hosting fee to the cost of a new server with related software fees, hardware and software support, server management, disaster recovery solutions, a secure data center, and on-going support. Not surprisingly, when considering the TCO of a new server compared to hosting, IBM i cloud hosting can win hands down.
5) We just don’t want to deal with server acquisition and managing the technology anymore. More frequently we are hearing from both IBM i users and applications users that they don’t want to have to deal with managing an on premise server and related hardware. They want to outsource the server and data center management. They just want to turn on their desktop and run…then call the help desk if they need help. Convenience can be a powerful motive.
6) We are comfortable with the internet. Most users I speak with are very comfortable with the internet. In fact, many make heavy use of the internet to link to other business locations, customers, suppliers, and allies.
If one or more of the above characteristics seem to fit your circumstances, IBM i cloud hosting is probably right for you.
Conclusion
My hope is that I have provided you clear guidelines when cloud hosting makes sense and when it does not.
When it comes time to change your current IBM server, researching your options is time-consuming and expensive for you and your company. With insight you can focus your research on the fewer options that make the most sense for your needs.
Still not sure if IBM i Cloud Hosting would be a great fit for your operation? Give me a call at 714-593-0387 or email me at blosey@source-data.com.
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