Most IBM i environments today are running on hardware that’s 10 to 20 times larger than what the actual workloads require. Not because IT leaders want that much horsepower, but because IBM stopped selling small systems years ago.

The outcome is predictable: companies pay for oversized servers they’ll never fully use, while also absorbing licensing tied to excess cores and storage. The smarter play isn’t to keep buying bigger boxes. It’s to right-size in the cloud.

The Myth: Bigger Servers Equal Better Value

Many CIOs still assume that buying extra capacity up front future-proofs the business. The thinking goes:

• If we oversize now, we won’t have to upgrade later.
• Bigger systems must be more cost-efficient long term.
• The cost difference is negligible compared to the risk of downtime.

In practice, oversized hardware creates the opposite outcome. You have higher capital expenses at purchase, software licensing linked to unused cores, and maintenance overhead for capacity that remains idle. Instead of investing in safety, companies are paying for waste. What this means for you is that the “bigger is safer” playbook is now a cost trap.

The Reality: You’ll Never Use That Capacity

The IBM i platform was built on efficiency. They designed the RPG language when memory and storage were scarce, which is why it runs leaner than most modern applications.

You could run your system in four to eight megabytes of memory and less than 100 megabytes of storage. Today, you can’t buy a computer that small; you have to buy one with 64 GB of memory and 800 GB of storage.

For most SMB workloads, this is akin to using a rocket engine to propel a bicycle. The system never utilizes that excess support power, but the licensing and support bills continue. What this means for you is that hardware sizing has shifted from a technology decision to a financial liability.

Cloud Hosting: Pay Only for What You Use

Right-sizing is where the cloud model changes the game for IBM i workloads.

• LPAR Allocation: Assign only the CPU, memory, and storage your workload needs.
• Scalability: Add resources instantly when growth requires it.
• Predictable Costs: Trade six-figure capital spikes for steady operating expenses.

The result is a system tuned to the workload, not oversized for hypothetical growth. What this means for you is a predictable IT budget and a system that can flex as the business evolves.

The Motorcycle Parts Distributor

One of our clients, a second-generation family-owned motorcycle parts distributor, faced the classic dilemma. They went looking for a new server when their on-prem hardware reached its end-of-life. However, the smallest IBM i server they could buy carried a $50,000 price tag and subscription licensing fees they didn’t need.

They chose instead to move into a hosted IBM i environment at roughly $700 per month. The environment was right-sized to their actual workload and came with built-in scalability in case volumes grew. Within weeks of migration, their operations team reported faster nightly jobs and a smoother reporting cycle.

The owner’s son, now running the business, summed it up, “Why would we ever go back to buying oversized iron?”

What this means for you is that moving to a cloud model doesn’t just change cost structure. It also builds in the flexibility your business will need five years from now.

Audit and Compliance Advantages

Oversized systems don’t just waste money. They introduce audit complexity:

• Paying for licenses tied to unused cores can raise concerns about over-licensing.
• Under-utilized servers often lag on OS updates and security fixes.
• Auditors expect documented proof of right-sizing and capacity justification.

Hosted environments make these issues easier. You receive allocation reports, SOC-certified controls, and audit-ready documentation that demonstrate a clear alignment of resources to workload. What this means for you is a simpler compliance review process and less risk during audits.

The Bottom Line for CIOs and CFOs

The era of affordable, small IBM i systems has come to an end. What remains are oversized and overpriced boxes that push SMBs toward wasteful spending. The myth that bigger equals safer no longer holds. Cloud right-sizing delivers performance, savings, and audit clarity without the excess baggage.

The decision point is clear: stop paying for rocket engines when all you need is a reliable sedan.

FAQs

Why Are Most IBM i Servers Oversized Today?

IBM no longer sells true entry-level systems. That means even SMB workloads get placed on machines designed for far larger capacity. The result is 10-20x more hardware than most workloads will ever use.

Does Right-Sizing in the Cloud Affect Performance?

No. In fact, performance typically improves. Because resources are tuned to the workload and can scale up instantly, systems avoid the inefficiency of idle oversized hardware.

How Does Licensing Work When I Move to the Cloud?

Licensing in hosted environments is tied directly to allocated cores, not to total physical capacity. That eliminates the problem of paying for licenses on cores you’ll never touch.

What Happens During an Audit if My Server Is Oversized?

Oversized servers often create evidence gaps. You may be paying for excess cores or running underutilized OS levels. Auditors expect proof of right-sizing, which is far easier to provide in a hosted environment.

Can Cloud Hosting Handle Growth if My Business Expands?

Yes. Scalability is one of the strongest advantages. You can increase CPU, storage, or memory in hours, not months, and without a large upfront investment.

Isn’t Keeping Hardware On-Premises More Secure?

Not necessarily. Modern hosted environments offer SOC-certified controls, continuous monitoring, and documented processes that exceed the capabilities of most SMB on-premises solutions. Security posture often improves after migration.

What Does Cloud Right-Sizing Mean for Cost Planning?

It replaces unpredictable six-figure capital cycles with predictable monthly operating expenses. That allows CIOs and CFOs to align IT budgets with business planning more effectively.

Stop Paying for Resources You Don’t Need

Paying for oversized IBM i servers doesn’t make sense. With our IBM i cloud services, you only pay for what you need while remaining ready to scale. Start your conversation with us today.