AS400 vs Cloud – Good, Bad and The Ugly

As a Data scientist working in the public sector I am curious about how AS400 stack up against cloud technology. Many government organization and companies, like banks or factories, still use AS400 to hold important data, and knowing how to get it out can be a big win.

AS400 is steady and good for simple tasks, while the cloud is better for big, flexible projects, so understanding both lets me pick the right tool. It also gives people like us a job edge in places with old and new tech, we can figure out if AS400’s lower cost beats the cloud’s price tag. Plus, mixing the two can spark clever fixes. Curiosity about this stuff makes us better at solving problems, not just chasing what’s new.

Introduction

Big companies use two main types of computer systems: old ones like IBM’s AS400 (now called IBM i) and new cloud platforms. Lets looks at both by checking out how they’re built, how safe they are, how much they cost, the skills needed to use them, and what’s new with them.

Looking at old data, stories of companies switching systems, and guesses about the future to find out why over 16,000 banks still use AS400, even though cloud use is growing fast (17.5% each year). Switching from AS400 to the cloud cuts costs by 40% on average, there’s a 35% shortage of people who know how to use IBM i, and a mix of old and new systems is becoming the top choice for industries with strict rules.

Architectural Foundations

IBM i TIMI Architecture

The AS400, now called IBM i on Power Systems, has a special feature called the Technology Independent Machine Interface (TIMI). This separates the software from the hardware it runs on, which makes some cool things possible:

1. Old apps still work: Programs made for older 48-bit systems from 1988 can run on today’s 64-bit POWER9 systems without any changes.
2. Simple memory setup: It treats memory and disk storage as one thing, making it easier to write programs and keep data safe.
3. Strong security: Everything in the system—like files, programs, and users—is treated as a locked-up object with built-in permissions, which helps stop malware.

But this setup makes it tricky to connect with modern cloud systems. While IBM i can run AIX or Linux in separate sections (called LPARs), it doesn’t work well with the latest container tech.

Cloud Computing Architecture

Cloud systems split up who’s responsible for what, depending on the type of service:

1. IaaS (like AWS EC2 or Azure VMs): Gives you basic computing and storage power, but you handle the operating system and apps yourself.
2. PaaS (like Google App Engine): Hides the techy stuff so developers can focus on building their programs.
3. SaaS (like Salesforce): Hands you a ready-to-use app with everything set up.

Big cloud companies like AWS, which has 30% of the market, use a huge network of locations (over 218 for AWS) to make things super fast—usually under 50 milliseconds. Features like auto-scaling and serverless setups (like AWS Lambda) let you fine-tune costs, unlike the AS400, which is stuck with a set capacity that doesn’t flex.

Security Posture Comparison

Strengths of IBM i on Power Systems

1. Security rules: It comes with 20-50 security levels, and Level 40 automatically checks that objects (like files or programs) stay safe and untampered.
2. Fewer viruses: It gets 64% fewer infections compared to typical x86 systems because its data objects can’t be run like programs.
3. Private setup: Since it’s installed on-site, it avoids the risks of sharing space with others, like in public cloud systems.

Cloud Security Advantages

1. Tight access control: Tools like Azure Active Directory and AWS IAM let you set detailed rules about who gets in and what they can do.
2. Smart threat spotting: AI-powered stuff like AWS GuardDuty checks over 1 terabyte of logs every day to catch problems fast.
3. Stronger encryption: Cloud hardware security modules (HSMs) use a high-level FIPS 140-2 Level 3 encryption, compared to AS400’s built-in AES-256.

Bottom line: AS400 is great for industries like defense that need totally isolated systems, while clouds are better at handling fast-changing threats.

Financial and Operational Costs

AS400 Cost Drivers

1. Hardware: A Power9 server for IBM i runs between $50,000 and $500,000 to buy, while a similar AWS EC2 instance in the cloud costs just $0.10 per hour.
2. Workers: RPG developers, who work on AS400, are hard to find and earn over $150,000 a year—25% more than cloud job salaries.
3. Updating: Turning old-school green screen interfaces into modern web ones costs $75 to $150 per user.

Cloud Economics

1. Cost Cut Example: A company called TCS helped a UK bank lower its tech costs by $300,000 a year after switching from AS400 to a cloud system.
2. Peak Handling: The cloud can handle busy times (like a sudden rush of users) for just 1/10th the cost of keeping extra AS400 capacity ready all the time.
3. Long-Term Savings: Over 5 years, using the cloud costs 53% less on average than sticking with an on-site AS400, according to a Forrester study.
4. Real-Life Win: A North American store saved $450,000 every year by moving its AS400 setup to IBM’s Power Virtual Server in the cloud.

Talent Ecosystem Analysis

AS400 Skill Crisis

1. Aging Workforce: 58% of IBM i administrators are over 50 years old, and less than 2% are under 30.
2. Hard to Find Skills: 73% of companies say it’s tough to find developers who know RPG or COBOL, the languages used with AS400.
3. Lost Know-How: When an expert retires, they take about 120-200 hours’ worth of special knowledge with them that’s not written down.

Cloud Talent Surge

1. Cloud Jobs Boom: Cloud architect jobs grew 27% in a year, with salaries between $160,000 and $180,000.
2. Certifications Pay Off: People with AWS certifications earn 20% more than those without.
3. Popular Tools: 85% of DevOps engineers use Kubernetes, while only 12% of AS400 users do.

What It Means: The shortage of AS400 experts is pushing companies toward cloud or hybrid systems, even though switching can be risky.

Use Case Alignment

AS400 Ideal Scenarios

1. Banking: Over 16,000 banks use AS400 to handle transactions, processing 3 million per second.
2. Manufacturing: JDE World A9.2 on IBM i manages over 10 million product codes (SKUs) and stays up 99.99% of the time.
3. Healthcare: Patient records on IBM i’s DB2 pass HIPAA audits 40% faster than on SQL Server.

Cloud-First Candidates

1. Online Shopping: Cloud auto-scaling easily handles holiday traffic that’s 10 times higher than normal.
2. AI and Machine Learning: AWS SageMaker trains models 8 times faster than on-site GPU setups.
3. Global Apps: Azure’s 60+ regions keep app response times under 100 milliseconds worldwide.

The “Ugly” Challenges

AS400 Migration Pitfalls

1. Data Issues: Switching from EBCDIC (AS400’s format) to ASCII (cloud’s format) messes up 1 out of every 10,000 records.
2. Old Code Problems: 40% of COBOL programs moved to the cloud need rewrites costing $50,000 or more because the code isn’t well explained.
3. Downtime Risks: A 72-hour switch to a new system could cost financial companies $500,000 or more per hour if things go wrong.

Cloud Adoption Risks

1. Cloud Fees: Moving data out of AWS adds 15-20% to costs if you use multiple clouds.
2. Rule-Breaking: 60% of cloud users fail PCI security audits, compared to just 12% on AS400.
3. Speed Needs: Manufacturing IoT devices need responses in 5 milliseconds, which public clouds can’t always deliver.

Future Trajectories

Hybrid Architectures

IBM’s Power Virtual Server makes it easier to connect AS400 systems with AWS or Azure in these ways:

1. Shared Hardware: AS400 and Linux setups (called LPARs) can run side-by-side on the same POWER9 machines, keeping things efficient.
2. Easy Connections: 80% of companies use REST APIs to link IBM i’s Db2 database to cloud apps, making data sharing smooth.
3. Faster Recovery: Cloud backups help get AS400 systems back online 67% quicker after a disaster, cutting downtime.

Strategic Recommendations

1. Regulated Industries (like banks or healthcare): Keep AS400 for the main systems that need tight security, but use the cloud for data analysis and user-friendly interfaces.
2. Small/Medium Businesses: Switch everything to the cloud to cut total costs by 30-40%.
3. Developers: Learn to update RPG skills (using tools like RDi and SQL) and how to connect AS400 with AWS or Azure.

Conclusion

The AS400 system, now known as IBM i, continues to reign supreme as an unmatched champion for managing massive transaction volumes and meeting the stringent demands of compliance-heavy workloads—think industries like banking, healthcare, or manufacturing where precision and reliability are non-negotiable. Its robust $15 billion ecosystem, a testament to decades of refinement, remains a vital lifeline for businesses that can’t afford even a moment of weakness.

Yet, this isn’t a story of stagnation—far from it. That ecosystem, once a standalone titan, is increasingly intertwining with the dynamic world of modern cloud platforms, forging a partnership between yesterday’s dependability and today’s innovation. The savviest enterprises, those with an eye on the future, are charting a hybrid course: they keep their battle-tested COBOL cores running smoothly on IBM i for the mission-critical stuff, while plugging into the cloud’s dazzling capabilities—like artificial intelligence (AI) and advanced analytics—to push their operations into new territory. It’s a brilliant fusion of legacy strength and digital flair, a strategy that promises to keep them competitive.

However, there’s a flip side to this tale. Companies that cling too tightly to the past, refusing to evolve, face daunting risks: breach costs that can soar up to 150% higher than their proactive peers, alongside a steady exodus of talent as skilled workers drift toward trendier fields. But rushing blindly into a full cloud overhaul isn’t a magic fix either—hasty migrations can spiral into costly quagmires, with rewrite projects easily climbing past $1 million when legacy code clashes with modern systems. The wisest path forward is a thoughtful one, balancing AS400’s proven reliability with the cloud’s scalability, guided by a clear-eyed look at what each workload needs to deliver the best bang for the buck.

Speaking of what’s next, this hybrid journey opens the door to some exciting tech frontiers worth exploring further. Curious about how data science and machine learning could supercharge data recovery in a hybrid setup? Or how AI-driven encryption and decryption might lock down your systems tighter than ever?