IBM i hosting choices often underperform because providers overlook crucial interactions within the infrastructure. Many hosting vendors simply copy your current hardware specifications, provide a quote, and complete the transaction. Experienced infrastructure teams first evaluate your actual workloads to uncover optimization opportunities. Taking the time to perform this assessment routinely delivers hosting savings of 30 to 70 percent for businesses … commonly in the range of $5,000 – $15,000 per year savings.

Going Beyond the Standard Quote Uncovers Real Value

When prospects request pricing based on the specs of their existing hardware, it signals a common issue. These clients are looking for a quick number rather than a complete solution.

Most hosting vendors are happy to provide these quotes without digging into the client’s exact hosting needs. They’ll build a quote that mirrors the prospective client’s current server and move to the next client.

The issue with just providing a hosting solution based on these specs is that many of these clients are running oversized hardware. IBM’s manufacturing economics favor larger capacity because it costs less per unit to produce at scale. For example, a five-user distribution company running on a Power9 rated at 13,000 Commercial Processor Workload (CPW) per core may realize only 800–2,000 CPW of effective throughput. If a hosting service just mirrors the specs of their hardware, they’ll be paying for more capacity than they need.

A proper workload assessment evaluates hardware reports, software parameters, user counts, and active locations. Technicians then construct a custom logical partition tailored to your actual daily business operations. That eliminates the gap between assumed needs and real requirements, creating savings across all enterprise environments.

The Foundation of Effective IBM i Right-Sizing

Right-sizing a hosting solution is not a spreadsheet exercise. It requires decades of familiarity with how specific software packages behave under real production conditions.

I spent my early career at IBM selling into manufacturing, distribution, logistics, pharmacy, trucking, and agriculture. I later became an IBM Business Partner reselling ERP platforms including JD Edwards, Infor Application Plus, VAI, and others. I’ve tracked how those applications consume resources, how they scale with user growth, and where they create latency under specific conditions since the early 1990s.

That background is rarer than it sounds. Most IBM i practitioners know one industry deeply or one application well. Few have tracked the behavioral fingerprints of software across dozens of vertical markets over multiple hardware generations.

There is also a detail conspicuously absent from most IBM documentation: the gap between rated CPW and delivered performance. IBM measures CPW ratings in labs with hundreds of storage devices. However, most small to mid-sized clients’ servers have two to twelve storage devices. Consequently, the throughput difference is significant. This massive throughput difference is a performance aspect you only learn by connecting dots across thousands of real-world implementations, not by reading the IBM Redbooks library.

Strategic Support for Your Infrastructure

Expert right-sizing conversations maximize your initial savings, while deep engineering support protects your daily business operations.

When an unmonitored system encounters an error, users often clear the notification without identifying the underlying root cause. Proactive monitoring identifies these indicators early, ensuring your disks, cache batteries, and core applications run smoothly without interruption. Comprehensive monitoring systems detect these conditions long before they disrupt your core business workflows.

Source Data actively tracks hundreds of unique system conditions for every client environment. Experienced IBM i engineering experts respond directly to these automated system alerts immediately. Your critical business infrastructure deserves dedicated human attention rather than anonymous automated ticketing queues.

Avoid Costly IBM i Upgrade Paths

Organizations moving to the cloud often need to upgrade from older IBM i operating system releases to supported versions. In most cases, the upgrade is straightforward.

However, some legacy applications require IBM’s traditional two-step upgrade process, which can be costly. By leveraging decades of experience with legacy IBM i applications and programming languages, Source Data can often migrate these systems more efficiently and at substantially lower cost.

For example, a prominent organization needed to migrate legacy applications across multiple IBM i releases. The conventional upgrade path was estimated at approximately $15,000. Source Data completed the migration quickly for a fraction of that cost by applying proven IBM i migration techniques and deep expertise with legacy software.

The Value of Decades of Experience

Our organization focuses on practical capabilities developed through decades of managing thousands of unique IBM i environments.

Bob Losey has successfully connected software behavior, hardware architecture, and corporate outcomes since founding Source Data Products in 1979.

“Some guys really know the box. Some guys know their software. But few people know how they work together and how they interact. After 38 years in the AS/400 market, having visited and worked with over 4,000 users, I am the trusted IBM i engineering expert. You don’t just do exceptional cloud hosting. You have the ability to vet the different people and partners you bring in so that clients don’t have to spend the time. I already know their track record.” – Bob Losey, Founder and President, Source Data Products

Common IBM i Hosting Questions Addressed

What does IBM i right-sizing mean in a hosted environment?

Right-sizing means configuring a hosted Logical Partition (LPAR) around your actual workload throughput rather than original hardware specs. IBM frequently builds mid-market systems with significantly more computing capacity than average business environments ever consume. A proper assessment evaluates utilization reports and user counts to identify your true infrastructure needs. This assessment ensures you get the capacity you need without overpaying. We took a closer look at these issues in a post about IBM i LPAR right-sizing.

Why does IBM ship oversized hardware to mid-market clients?

IBM optimizes its manufacturing efficiency by producing higher-capacity systems at a lower cost per unit. That incentivizes the production of larger configurations over smaller, custom-tailored hardware alternatives. As a result, small to mid-sized businesses frequently receive systems with significantly more capacity than their daily operations require.

What is the difference between the CPW rating and the actual delivered performance?

Commercial Processing Workload (CPW) ratings reflect system capabilities measured under ideal laboratory conditions with extensive storage arrays. Most mid-market operations run on much smaller storage configurations containing only a few active drives. This difference creates a substantial variance between laboratory ratings and actual production throughput. Raw performance ratings do not accurately project real-world delivery, making custom workload assessments essential.

Can older IBM i versions migrate directly to V7.5 without intermediate upgrades?

Many organizations running legacy operating systems can transition directly to modern versions without intermediate steps. The safety of a direct migration depends on your specific software applications and custom code. Engineers must test these applications within the target environment before executing the final cutover. We covered how we helped one client make this jump in a recent post.

What ISV transfer fees should I expect when migrating IBM i to the cloud?

Independent Software Vendor (ISV) transfer fees depend on the policies your application providers have in place. Some software vendors charge minimal administrative processing fees, while others demand a percentage of total license values. Businesses should confirm the fees with each application developer before finalizing migration schedules. Partnering with an experienced infrastructure specialist helps you anticipate and plan for these expenses. We recently published a post that explores how ISV transfer fees can influence these transitions.

How deep should IBM i system monitoring go in a hosted environment?

Comprehensive IBM i monitoring covers between 250 and 1,000 individual system conditions per environment, depending on complexity. That includes disk health, cache battery status, job queue depth, message queue alerts, and performance thresholds. General cloud monitoring tools designed for Windows or Linux infrastructure do not surface IBM i-specific conditions at that level. Effective monitoring requires platform-specific expertise and tooling built for the IBM i operating environment.

What certifications should an IBM i hosting data center hold?

A Tier III data center classification means the facility maintains N+1 redundancy across power, cooling, and network paths. The facility must have 99.999% uptime as defined by the Uptime Institute. SOC 2 Type II SSAE 18 attestation confirms that financial controls in the hosting environment have been independently audited. These two certifications together address both physical infrastructure reliability and the control environment your auditors will ask about.

How do I know whether my IBM i environment is a good candidate for cloud hosting?

Organizations that benefit most from IBM i cloud hosting typically share several characteristics. They often run aging Power servers that are approaching or beyond IBM’s supported maintenance lifecycle, have a small IT staff with limited IBM i expertise, or face the retirement of their in-house IBM i specialist. Other common drivers include inadequate disaster recovery capabilities, an upcoming lease expiration or data center closure, or the need to reduce infrastructure costs.

The primary exception is poor internet connectivity. Because IBM i cloud performance depends on a reliable, low-latency network connection, organizations with limited or unstable connectivity should address that issue first. We discuss this in more detail in our article on the factors that determine IBM i cloud performance whether IBM i hosting is the right choice.

True Technical Expertise Drives Cloud Success

Right-sizing an IBM i environment is not a feature any hosting platform offers automatically. It is the product of decades of watching how specific software packages, storage configurations, and user profiles interact under real production conditions. If your hosting conversation has stayed at the level of specs and monthly pricing, it has not started yet.

Start a workload assessment with the Source Data team to align your actual hosting costs with true business usage.

Bob Losey is the founder and president of Source Data Products. He has held an uninterrupted Premier IBM Business Partner relationship since 1992 and previously served as President of the Association of Service and Computer Dealers International (ASCDI).