IBM i Delivers Sizable Benefits, Forrester Consulting Reports
June 7, 2023 Alex Woodie
IBM i shops have firsthand knowledge of the positive characteristics of the platform relative to industry-standard X86 servers. We often hear anecdotes about the platform and share them with you through these pages. But IBM would like to get beyond mere anecdotes and get to some hard numbers on the IBM i advantage. That’s when it turns to Forrester Consulting.
According to Forrester Consulting’s latest Total Economic Impact (TEI) report, a typical IBM i customer can expect to save about $2.6 million over three years as a result of the IBM i platform’s uptime, productivity, and efficiency. The report, which was commissioned by IBM, was released in April.
For it latest TEI report on IBM i, which you can find here, Forrester Consulting interviewed five senior leaders at five IBM i shops. The leaders and the organizations were diverse, ranging from a chief digital information officer at a $7.7-million industrial machine and equipment company with 150 employees to the director of architecture at a $135-billion healthcare provider with 58,000 employees.
According to the report, Forrester took two main approaches to their questioning. On the one hand, the consultants quizzed the leaders about the types of IT challenges that they face. The leaders cited downtime, siloed systems that didn’t communicate, and repetitive manual process. According to the report, the organizations looked for solutions that could address these concerns (which ostensibly was the IBM i server, although that was never completely spelled out).
Forrester also gathered hard information related to system cost, the number of people required to manage the server, the number of business users, the number of downtime incidents they experience annually, and the cost of that downtime. The consulting firm took those actual, real-world numbers and used them to generate a single, composite IBM i shop that has $28 billion in sales and 15,000 employees, which would be the subject of further economic analysis.
The analysis says the move to IBM i correlates with the elimination of three separate downtime incidents of downtime per year. When the cost of downtime is factored in, the reduction in system downtime was worth $1.06 million over three years, Forrester said.
Simpler administration also benefited the IBM i shops. According to Forrester, the hypothetical IBM i customer was able to get by with just 1.5 full time equivalent (FTE) worker compared to three for the non-IBM i organization, leading to a savings of $470,000 over three years.
The IBM i and its applications also contribute to an increase in productivity of business users, Forrester said. The savings amount to 3.75 FTEs, equal to a savings of $1.05 million over three years. When you add it all up, the composite IBM i shop was able to save $2.6 million over three years relative to whatever the comparison system would be, according to Forrester’s analysis.
Costs were part of the equation too. Forrester’s composite IBM i shop incurred system costs of $336,000 over three years, which included the cost of an IBM Power model S924 8-core server, which carried a price tag of $77,000. The composite shop also had an annual $2,100 maintenance fee and annual $102,000 IBM i fee for five licenses, according to the report.
Personnel expenses represented the bulk of the costs. Forrester says the composite IBM i shop incurred $548,000 in integration and administration expenses over three years, which represented 1.5 FTEs dedicated to supporting IBM i at a “fully burdened” salary of $140,000 for each systems administrator.
All told, the shift to IBM i was beneficial for the composite company, with a return on investment (ROI) of just half a year, Forrester says in its report.
“The representative interviews and financial analysis found that a composite organization experiences benefits of $2.58 million over three years versus costs of $884,000, adding up to a net present value [NPV] of $1.69 million and an ROI of 191 percent with a payback period of less than six months,” Forrester says in the report.
There are also unquantified benefits of using the platform, Forrester found. For instance, the capability to “easily integrate in-house developed applications” is seen as a boon for IBM i users, it says. The scalability that results from using IBM software, including open source options, is another benefit that’s tough to put a number.
Protection against malware is a more tangible thing that most IBM i shops would be familiar with, even if it’s also something that is difficult for the bean counters to quantify. Forrester also cited “peace of mind about uptime” that comes from owning an IBM i server. (While we’re not ones to invalidate anybody’s feelings, the fact that Forrester had already quantified the cost of downtime makes this one a bit harder to accept.)
Some of the comments from the five IBM i professionals, which Forrester included in the report, are telling in that they reflect the sorts of capabilities that IBM i shops commonly experience.
“With everything that IBM i is doing, there really isn’t anything you can’t do anymore,” says the senior programmer/analyst at the sign and display manufacturer, which has $250 million in revenues and 850 employees. “You can do AI, run your data warehouse rewrite your RPG applications, and more.”
“IBM i is running the whole business,” said the director of information technology at the healthcare product manufacturing company, which has $9 million in annual revenues at 70 employees. “I think that’s pretty incredible that you’re able to run your whole business from one box like that. That’s simply amazing to me.”
“The fact that I can manage the IBM i with a smaller number of people. That’s great,” said the software architect for a financial services firm, which has revenues of $4.4 billion and 8,300 employees. “That’s a tangible benefit.”
“IBM i is always up,” said the director of information technology for the healthcare product manufacturing company. “In December, we migrated from a Power8 to a Power10 – our downtime was one hour.”
In the end, the Forrester TEI report helps to validate what IBM i customers already know about the platform. Hopefully IBM can get it into the hands of decision-makers who are looking to make a change in their business platform, whether that’s possibly moving off the IBM i platform or moving off another platform. It’s when these decisions are made that opinions can be swayed with these sorts of analyses and testimonials.