You Ought To Be Committed
March 13, 2023 Timothy Prickett Morgan
There is a phrase that we learn as teenagers, concomitant with the kinds of peer pressure that close friends can bring to bear early in our lives to nudge us, that applies in an inverse way to a portion of the IBM i customer base, or probably more precisely, to the upper management at a portion of the company that thinks – erroneously – that getting off the IBM i platform is somehow going to magically fix their particular IT problems.
All talk and no action.
Don’t get us wrong. We are not trying to get people to move off the platform. Quite the opposite. But we are going to point out, once again, that the number of people who talk about getting off the platform in the annual IBM i Marketplace Survey put together by Fortra (formerly HelpSystems) is nowhere near as high as the number of people who actually get around to doing it. If it were, the IBM i base would have all but disappeared by now.
Let’s do some math before we get into the commitment level for the IBM i platform.
In 1998, there were 275,000 unique IBM i customers in the world, and we think during the Y2K crunch and its aftermath, there certainly were a lot of customers who did in fact move off the platform. If they were going to move to packaged software from SAP, PeopleSoft, JD Edwards, Oracle, and others – those used to be more than two companies – then many of them chose to move off the AS/400 platform. So somewhere around 30,000 customers did that in 1998 and another 25,000 did that in 1999. But once the calendar rolled over to January 1, 2000, the Y2K problem was solved (or not) and that was not a problem. The attrition rate, caused by intense competition with Unix and Windows Server platforms, a recession, and a huge number of mergers and acquisitions across all industries, nonetheless dropped to around 5 percent for a handful or years, and then kept dropping. IBM was adding customers at that time, too, so the net loss was a bit smaller than the attrition rate.
Eventually – probably around 2015 or so – the 120,000 diehards who either cannot move or will not move were left in the market. And now, we think, the level of customers leaving the market – around 600 per year – is balanced by the number of new customers entering the market, and so we are sitting at a steady state of around 120,000 unique customers on the IBM i platform. We are not saying that they are all current on Power Systems hardware and IBM i releases. As you well know, we think only about 25 percent of them do this, and the other 75 percent are laggards who, for various technical and economic reasons, hang back on their hardware and software. (We have discussed this at length in articles itemized in the Related Stories section at the bottom of this story.) If this model of the IBM i and Power Systems market is inconsistent with what IBM or anyone else in the IBM i community knows or sees, no one has ever called us on it. It fits the anecdotal evidence of the people we know.
What doesn’t fit with what we know is the idea that the attrition rate is going to go back to that 10 percent or higher rate that we saw in the late 1990s, and every time we see that in the IBM i Marketplace Survey results, we don’t laugh but we feel compelled to explain. Intentions are not actions.
I will give you a good example: I intend to get my pilot’s license, and if you ask me, I will tell you it is on my list of a dozen things to do. But for the past 23 years I have had children young enough to need their dad around and that is a risk that I just can’t take. (Ellie is 23, Henry is 21, Chloe is 16, and Mia is 4 at the moment.) And my wife will probably put the kibosh on the idea once the kids are old enough. She wants me around, too, and knows full well I might get a little joyful crazy up there. We make-do with the 2014 Dodge Challenger R/T Turbo with the Street Pack. . . . We can get into enough trouble there, with a more reasonable risk profile.
It is with this in mine that we look at the commitment to the platform as expressed in the most recent IBM i Marketplace Survey report for 2023:
What is good and interesting about this year’s data is that, after we all started talking about cloud in earnest in the IBM i world for the past several years, is that we have inserted cloud as an option. And lo and behold, 12 percent of the base said that they were going to stay on IBM i but move their infrastructure to the cloud. The results say that 37 percent of the base is going to hold steady on their IBM i platforms, 20 percent said they are going to increase their IBM i footprint. Apparently no one is shrinking their IBM i footprint, but another 10 percent said they were going to migrate some of their applications to a new operating system, and 11 percent said that they were going to move all applications to a new operating system.
Now, let’s drill down into the 11 percent who said they are going to migrate all applications off IBM i. This sounds ambitious to us, but it still happens thanks to mergers and acquisitions. Some 48 percent of them, representing 5.3 percent of the total IBM i base, say they are going to do it in the next two to five years (Sounds like a pilot’s license plan to me). Another 33 percent of them, representing 3.6 percent of the total IBM i base if you do the math, said they would move in two years. (OK, that sounds like someone is drinking too much Everclear or too much of someone application vendor’s Kool-Aid.) Within this group, another 7 percent (just shy of 7/10s of a percent of the entire IBM i base) says it will take more than five years to move all of their applications off the platform, and another 12 percent (representing 1.3 percent of the total IBM i base) say they don’t know how long it will take.
We do absolutely believe that companies will move some applications to Windows Server or Linux platforms, and certainly new ones in data analytics and machine learning will be preferentially installed on Linux. And many companies will absolutely augment their applications with third party applications, notably things like Salesforce.com for customer relationship management, Monday or Osana for project management, and so on.
But you have to be committed if you think the intent expressed in these numbers will turn into action. And luckily for you, if you are reading The Four Hundred, you are committed to the IBM i platform as we are, and you can just get on with business.
The Power Systems Base Is A Little Less Rusty (2023 Survey)
The IBM i Power10 Upgrade Cycle Forecast Looks Favorable (2023 Survey)
RPG Use “Skyrocketed” Says IBM i Marketplace Report (2023 Survey)
Cutting IT Costs Is Not A Priority, And That’s Good News (2023 Survey)
How Do You Stay In Touch With The IBM i Community? (2023 Survey)
Security Still Top Concern, IBM i Marketplace Study Says (2023 Survey)