Will Independent IBM i Clouds Survive PowerVS?

June 16, 2025 Alex Woodie

IBM currently competes with a slew of private IBM i clouds with its Power Virtual Server (PowerVS) offering. But at least one major private IBM i cloud is bowing out of the business as IBM’s PowerVS grows bigger and more capable. Can the private IBM i clouds survive?

Private clouds have been around in one form or another for as long as the IBM midrange server has existed. Whether it’s termed co-location, a computer bureau, an application service provider (ASP), a managed service provider (MSP), or the private cloud, people have been running IBM gear on behalf of other people for a very, very long time.

Since the online bookseller Amazon decided in 2006 to start offering its spare compute capacity via Amazon Web Services, the world of computing has been moving to the cloud. In recent years, public clouds like AWS, Microsoft Azure, and Google Cloud have gobbled up ever-bigger chunks of the overall computing pie. That has spurred many companies to seek cloud-like homes for their proprietary IBM servers, including IBM i.

Today, IBM i shops can choose from more than dozen private clouds that run Power servers in their own data centers or, more often, rent space in a co-location facility owned and managed by others. Some of the names of private IBM i cloud providers that might be familiar include LightEdge Solutions (formerly Connectria), Meridian IT, Racksquared, Source Data Products, Kyndryl, and Data Storage Corp.

Fresche Solutions is another IBM i private cloud provider you might recognize. Back in October 2021, Fresche acquired Abacus Solutions, one of the largest managed service providers (MSPs) serving the IBM i private cloud market. Fresche figured that a certain number of its IBM i modernization customers would also be looking to modernize how they ran their overall IT environment by moving to the private cloud.

However, the move to host hardware under former Fresche chief executive officer Steve Woodard did not appear to pay off, as Fresche is now pointing customers in the direction of PowerVS, IBM’s hosted offering for IBM i, AIX, and Linux.

Fresche shifted its strategy about six months ago, according to Lief Morin, the general manager of Fresche’s cloud and modernization business. And in March, Fresche announced an expansion of its partnership with IBM that saw Fresche become a PowerVS partner and encourage its private cloud customers to adopt PowerVS.

“CapEx is a harsh, harsh world to live in,” Morin told IT Jungle during the recent POWERUp 2025 conference in Anaheim, California. “We believe our best opportunity to access market at scale is through the channel.”

The decision to leave the business of owning and running Power hardware on behalf of customers came after careful market analysis. The biggest thing that changed was an improvement in IBM PowerVS, Morin said.

“We will agree – I think IBM would agree – that a year ago or 18 months ago, it didn’t have all the services that were needed to run a mission-critical workload. There were questions about lots of different things – networking, communications. And I think all of that has been fixed,” Morin said. “They have just put a ton of energy and work into improving the capabilities and resiliency, availability, service – all of those features. All of that is so much better. And that was somewhat of a compelling moment for us.”

The IBM i installed base seems to have noticed, too. Steve Sibley, vice president and business line executive in IBM Systems, said at POWERUp 2025 that the PowerVS business is currently growing at a 30 percent rate annually.

As we reported in April, IBM had 650 PowerVS customers as of October 2024, when it offered PowerVS in 21 IBM Cloud datacenters around the world. Doris Conti, the vice president of Power Systems product management, told The Four Hundred back in October that IBM had enjoyed eight consecutive quarters of double-digit revenue growth and triple-digit signings growth for that PowerVS business.

The man running PowerVS is Anthony Ciccone, director of product management for IBM Power Systems Cloud Offerings. He addressed the success that IBM is having with PowerVS on IBM i during the opening session of COMMON’s recent conference.

“I like to think that everybody knows about Power Virtual Server,” Ciccone said. “But I’m often surprised that people don’t know that you can actually extend your IBM i environment into the cloud and modernize it in that way.”

Ciccone highlighted the ability to run three operating systems a hybrid manner, as well as the trust that comes from running an IBM server.

“We have a long list of compliance certification and security controls, and it provides you easy access to over 250 IBM cloud services that can help you modernize IBM i applications, moving to the cloud,” he continued. “You can use things like containers and OpenShift services. You can add watsonX services to your IBM i environments with co-resident watsonX access services. And we continue to invest in making this platform better and better to be what we like to think of as the best landing zone for IBM i in the cloud.”

The market for private IBM i cloud has changed over the past five years, Morin said. It has improved to the point where the largest players are fairly uniform in terms of the quality and terms of the private cloud offerings. Fresche decided that it wasn’t a business it wanted to be in anymore, and so it partnered with IBM and PowerVS.

While it doesn’t want to be in the business of buying and running hardware, it does want to be in the private cloud business in another way: managing boxes and applications on behalf of customers. That’s part of Fresche’s Keep The Lights On, or KTLO, business, which it launched last year, Morin said.

“We think we need to move up the value chain, going back to applications to stand out,” Morin said. “We do not want to compete with the resellers. We want to enable them to bring their workloads to Power. And we will do that providing the onboarding services and the operational managed services if they’d like. . . That’s our niche, and that’s where we think we’re headed and where we think strategically will have value.”

If the improvement in PowerVS led Fresche to get out of the private IBM i cloud business, are other providers doing the same math? That’s a question that we hope to dig into in future issues of The Four Hundred. As always, if you have an opinion on this or other matters relating to IBM i, don’t hesitate to contact us.

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