IBM i Cloud Cost Considerations – Learn What to Ask

IBM i Cloud Cost Considerations

July 29, 2020


According to the 2020 IBM i Marketplace Survey, 23 percent of IBM i shops already have already found their way into the cloud. That’s up six percent from the previous year. What is driving this trend?

Sure, cloud-only or hybrid-cloud environments have the potential to provide a better user experience, scale with flexibility, and facilitate modernization and innovation. However, many organizations perceive cloud computing as a silver bullet for controlling IT costs. But CIOs and IT directors know that this is not always as straightforward as it appears.

In this article, we outline where some of the hidden charges associated with cloud computing, so you won’t have any nasty surprises.

CPU, Disk, and Memory

With cloud, you get what you pay for. That’s why it’s important to properly understand and quantify your current IBM i workload like never before.

Disk storage and memory is normally charged by the gigabyte (GB) while virtual central processing units (vCPUs) are calculated by the number of shared or dedicated units used. The dedicated vCPUs will incur a premium.

You could save money with every billing cycle if you are intimately familiar with your workload peaks and valleys, as well as any anomalies found there.

Operating System and Licensed Programs

In case you or your boss are new to the IBM i operating system, you should understand that you already pay maintenance on the operating system itself as well as any licensed program products (LPPs) that you have installed on-premises through the traditional software maintenance agreement (SWMA) with IBM.

This SWMA agreement entitles you to software upgrades, fixes, and telephone support from IBM. When moving to the cloud, these charges still apply and are normally split between the operating system and licensed product programs.

The difference in the cloud is that some cloud providers will offer you the choice of how you’d like these costs to be billed. There are two common methods:

  1. Short-term VMs (recommended for test or DevOps), which is calculated on a pay-as-you-go basis where you have exceeded your pre-defined reserved capacity
  2. Continuous-use VMs (recommended for production), which is typically calculated monthly against your pre-defined reserved capacity

Software Licensing in the Cloud

Software vendors differ widely in their approach to software licensing, pricing, and maintenance. Here are some questions you will need to ask in order to understand the impact of moving your application to the cloud.

Is your software license tied to a serial number?

Verify whether your software license is tied to a serial number and what your grace period is if you choose to move it to another (cloud-based) server.

It’s also worth noting that cloud providers offer services in several geographic regions. Be aware of the possibility that they could move your workload to another region or server, which would mean that the underlying serial number would change too and potentially invalidate your application.

What type of workload are you planning to move to the cloud?

Are you thinking about moving production, test, QA, or development to the cloud? Do you plan to use the cloud as a target server for HA/DR purposes? Some vendors offer sizable discounts based on your intended use.

What type of software license do you have?

The most common pricing models for IBM i third-party software vendors are based on:

  • Number of active processor cores
  • Number of users who will be accessing the application
  • Maximum number of users that will be accessing the application concurrently
  • IBM Power Systems processor group

Be sure you understand how your applications are priced as you consider your cloud migration.

Does your ISV charge a license transfer fee?

Regardless of whether you are transferring your third-party license from one server to another on-premises or in the cloud, you should not be surprised to see a small administration fee associated with the transfer. While this charge is normally small, be sure to factor it into your cloud cost considerations.

Is Cloud Worth the Cost?

While the cloud cost considerations discussed here may make the cloud seem expensive—or more complicated than the on-premises model you may run today, for that matter—when done right, IBM i in the cloud can be extremely cost efficient.

Remember that, once you understand exactly what your peak workload looks like and how it changes through the seasons, you’ll find that you’re paying for exactly the resources and licenses that you require—and not a dollar more.

Plus, you no longer need to purchase new hardware with sufficient headroom for both organic growth and anticipated seasonal spikes.

A growing number of IBM i cloud providers are now in the market. Some offer simple infrastructure-type solutions while others offer remote monitoring and management in addition to the infrastructure.

Whatever your requirements are, cloud can offer a viable, flexible alternative for IBM i shops that have traditionally run on-premises only.

Meet Performance Navigator

The historical performance data on your servers is a treasure trove of information regarding actual usage over time. But you must access and interpret this data to get to the bottom of performance issues or inform future hardware investments. Performance Navigator can help! Request a live demonstration and we’ll show you how.

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