The State Of The IBM i Base 2022, Part Two: Upgrade Plans
February 23, 2022 Timothy Prickett Morgan
It is always good for the IBM i ecosystem when there are new machines on the horizon with new processors, a lot more performance, and much better bang for the buck. This is, in many ways, what has drive the System/3X, AS/400, and IBM i midrange business forward for more than four decades.
But you have to admit, the kind of excitement that we used to have in the early years of the AS/400, when performance needs often outstripped what Big Blue – and indeed, any system supplier – could afford, is not prevalent in the IBM i base today. In the old days, getting a 15 percent or 20 percent, sometimes more, boosting in system performance with each new generation was enough to get customers to move between generations of machines, which were on a cadence of between one and two years, tracking Moore’s Law (twice as many transistors for the same price) and Dennard scaling (more clock speed in the same thermal envelope) increases in chip design and semiconductor manufacturing.
As we have pointed out many times, at many IBM i shops, the growth of existing workloads and the addition of new workloads is nowhere as fast as the improvements in performance that IBM has made available with each generation. And as time goes by, and the new hardware introduction cycle for hardware has stretched to between three years and four years, IBM i customers have been able to keep their machines in the field for four to seven years – and sometimes even longer. The cost of a unit of capacity has come down over time, too, and the stretching of time between when customers do upgrades and the price/performance improvements that come with each generation mean that the revenue stream from the whole IBM i platform has been under pressure.
But at least according to the annual IBM i Marketplace Survey report that comes out in January each year from HelpSystems, which we are peeling apart layer by layer, customers appear to be in a mood to upgrade their hardware and their software this year. Customers were asked about their 2022 hardware and software upgrade plans last fall, which was when there was a lull in the coronavirus pandemic and before the Omicron variant took hold. It is unlikely that Omicron, which certainly had a wave of infections but has seemed to crest, changed these plans much, particularly with many IBM i shops awaiting entry Power10 machinery and not really able to make use of a big, bad, Power10-based “Denali” Power E1080 server.
As is the case with most systems these days, IBM i customers do not have to upgrade both the hardware and the systems software stack at the same time. It has been a long time since that kind of cadence was required, much less warranted. And so this is a familiar distribution of upgrade plans, as we have seen in the prior seven years of the IBM i Marketplace Survey report. This one shows the plans among the 450 IBM i shops polled for the survey done by HelpSystems:
Not every upgrade that gets done for hardware in 2022 will be to a Power10 machine, just like every software upgrade will not be to the current IBM i 7.4 or the impending IBM i 7.5, as the future release is very likely to be called. Some customers will upgrade hardware to Power8 or Power9 machinery, which will be cheap even if it doesn’t offer better bang for the buck than Power10 iron; some customers will stay back on system software releases, moving to IBM i 7.2 or IBM i 7.3, or trying very hard to stay at IBM i 7.1, for various reasons.
I went back into the 2019 data, which was gathered in late 2018 when the Power9 cycle was just getting going, and the distribution of hardware-only, hardware-software, and software-only upgrades was similar. Back then 11 percent of customers said they were moving to new hardware, 16 percent said they were moving to new software, and 31 percent said they planned to do both in the coming 2019 year. (This was all reported in the 2019 edition of the IBM i Marketplace Survey report.) In 2022, the appetite for hardware-only upgrades is one point higher and for software-only upgrades is seven points higher, but for combined hardware-software upgrades is three points lower. The overall appetite for upgrades is only three points higher.
Just to get a second read on the intent of customers, and to ask a more precise and more relevant question given that Power10 machines are looming large, HelpSystems asked a different question in fall 2021, and the response to that question is in the chart below:
Even though the title of the chart above has the word “plans” in it, the question that was asked was not about plans as much as it was about consideration of a plan. This is an important distinct, but how important depends on how readers took the question: “Are you considering upgrading to Power10 when available?”
There is a gap between considering, as the second question asks, and have plan to as the first question asks. Many of us consider lots of things that we are not really planning for. And we plan for things that we had not really considered all that carefully, too, HA! But in any event, a full 73 percent of respondents told HelpSystems that they were considering an upgrade to Power10 this year, which is a heck of a lot larger than the 38 percent who said they were planning to upgrade their hardware this year (about three quarters of them as part of a software change).
That is a big disparity, which we think is particular true when many parts of the global economy are still struggling with the pandemic. This is the first time HelpSystems has asked the question this way, and it will be interesting to see how it played out when the 2022 survey is done for the 2023 report due in the coming January 2023.