IBM i Power8 Migrations Flourish, Say Service Providers

August 22, 2016 Dan Burger

IBM‘s second quarter financial report was an icy description of Power Systems revenue. It exposed a shivering 24 percent decline compared to a year earlier. Despite that biting insight, there’s a warm glow in the midrange market that is predicted to continue through the third quarter. Migrations to Power8 boxes are finding momentum in the IBM i-dominated small to midsize market, where purchases have been delayed, but are now occurring at an accelerated pace.

With hardware migrations comes downtime, so it’s interesting to take a peek at how the migration/downtime dilemma is being handled.

Bob Johnson, an executive vice president at Vision Solutions, talked with IT Jungle about some migration trends discovered by a Vision Solution survey. Let’s begin with 66 percent of IT professionals admitting to delaying hardware migrations for reasons attributed to concerns about downtime, lack of resources, no plan for accomplishing the migration, and costs related to the hardware upgrade.

“Their fears are not unfounded,” Johnson says. His evidence comes from additional eye-opening stats from the Vision survey.

Nearly 75 percent of all companies that performed a migration in 2015 were offline or experienced downtime for 48 hours or more, while 35 percent of companies surveyed said they lacked the experience or the expertise to confidently perform a system migration. A confidence-shaking 44 percent of businesses experienced a migration failure in 2015.

These numbers point to some serious migration dilemmas: downtime that extends beyond most companies’ comfort zone; a lack of skills to complete the migration project and get it right; and an uncertainty about how to proceed.

Vision Solutions is the dominant vendor in the IBM i high availability software field. According to Johnson, the IBM i customer base at Vision Solutions tops 5,000 and contributes 80 percent of the company’s revenue.

When Vision was acquired by Clearlake Capital Group three months ago, its total customer base was estimated at 12,000. That leaves 7,000 customers on systems other than IBM i and those systems bring in 20 percent of Vision’s revenue. Background on which customers participated in the survey was not provided.

From Johnson’s perspective, the lack of skills to do a hardware upgrade is universal regardless of whether the computing platform is IBM i, Windows, Unix, or Linux. Therefore, the survey numbers have a minimal margin of error when the conversation turns platform specific.

“We see a tremendous amount of opportunity as IBM i customers move to Power8,” Johnson says. “IBM i shops run critical apps on Power and when they go offline it causes significant business disruption.”

Helping IBM i customers migrate to Power8 by reducing downtime is a growing services business for Vision. Johnson expects it to grow.

“Most companies don’t maintain the expertise to conduct migrations in the manner that we can deliver, which is ultimately minimizing or eliminating downtime and the risks behind it,” he says.

Vision isn’t the only company with a services business built around migrations. Focal Point Solutions Group has spotted this opportunity as well. Ron Venzin, CEO at Focal Point, believes Power8 migrations are picking up speed in IBM i shops.

“It was always our belief Power8 was released too early, which helped create a slower adoption rate,” he says about the IBM i community. “What significant feature was provided in Power8 that would make a customer move from Power7 or Power7+ to Power 8? The improved Linux capabilities were not going to make large numbers of CIOs upgrade!”

IBM i shops that didn’t buy Power7 or Power7+ boxes are now ready to move to Power8 because the maintenance costs on the older boxes are relatively high, Venzin says. “We use their yearly maintenance cost savings to often justify the purchase of a Power8 server.”

That perspective is shared by Pete Massiello, CEO at iTech Solutions Group.

Massiello says IBM i shops are looking at the costs for three more years of hardware/software maintenance and finding it compares favorably with the cost to bring in a new Power8. “And, by the way, the Power8 with all solid state drives is not much more,” he notes.

The majority of iTech’s customers are small to midsize businesses and many of them are ready for a Power8.

“I would not expect the pace of migrations to get any hotter than it is right now,” he says. “IBM began a license transfer savings promotion back in May that continues until the end of September. There’s been really good traction on that. Small customers can save $5,000 on a license transfer.” (We detailed this promotion at this story.)

Johnson describes hardware migrations as Vision’s biggest revenue driver right now. In addition to server upgrades, he says other migration drivers include moves to greener, more efficient data centers, moving workloads to LPARs, and database migrations. He also says there’s a lot of consolidation in the healthcare and financial markets that are fueling hardware upgrades.

“Companies are bringing their acquisitions to the IBM i infrastructure, which is putting more data and applications on the i platform,” he says.

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