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A Proactive Approach Is Needed to Address IBM's Legacy Solutions



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ISVs and enterprises must move forward, while leveraging their existing knowledge and investments.


Editor's Note: This article is excerpted from the white paper "The System i Challenge," which is available free from the MC White Paper Center.


The System i (formerly known as iSeries and AS/400) is a midrange platform produced by IBM. In the '90s, the AS/400 platform became one of IBM's greatest success stories. A symbiotic relationship between platforms and independent software vendors (ISVs) proved to be a critical success factor for both the platform and the application providers. The value propositions of the System i platform and the advantage over alternatives led thousands of enterprises and ISVs to develop vertical applications based on System i and to put their trust into and base their future on this environment. It was the golden age of the platform, and new vertical solutions were created one after the other.


As with other technology-based products, over time there was a decline in purchases of new System i boxes. The decline in revenue reflected the difficulty IBM had trying to sell the System i line, which in turn caused IBM to change its product strategy regarding this platform. The System i Division was reorganized into the Power Systems and Business Systems units for larger and smaller clients, respectively.


The System i Challenge

During the peak years of System i, the interdependency between the platform and the application vendors brought prosperity to both IBM and ISVs. Many enterprises relied on the benefits of the platform as well. Today, however, as the platform seems to be ending its life cycle, both ISVs and enterprises that rely on the platform are facing a real problem.


ISVs Facing a New Reality

Many ISVs with vertical solutions based on System i still produce an ongoing revenue stream from existing customers through maintenance and support, but there is hardly any new business. Moreover, there is a constant decrease in maintenance and support fees, because customers are moving to other solutions or demanding payment reductions. Some customers have concluded that the platform and applications are at the end of their life cycle and simply refuse to pay.


Typical challenges that ISVs face include these:


•·         Selling to new customers is becoming more difficult. As soon as a prospect understands that a System i box is required, the sales process becomes much more difficult. In addition, today's customers are demanding Web-based applications and are unwilling to use green-screen applications.

•·         There's a lack of available team resources. According to customers, IBM offers too few green-screen RPG courses, and the ones that are available are too expensive, so the number of people attending them is quite low. Veteran green-screen RPG programmers are retiring, and it is very hard to replace them or enlarge the development team.

•·         Training new users on System i applications takes too long because users find it hard to cope with unfamiliar function buttons (rather than a mouse).

•·         Adapting applications to meet customer demands takes too long. Customers are accustomed to getting their requests met very quickly (with modern IDEs such as Visual Studio). Although RPG is considered a third- or even fourth-generation language, compared to today's modern languages-not to mention their powerful IDEs-green-screen RPG is less productive and lacks a rich third-party source for additional tools and code libraries.

•·         Existing customers are moving to new applications on more modern platforms such as .NET, where there is a growing availability of packaged applications.


Enterprise Concerns

Enterprises that built their IT solutions around System i are facing difficulties in-house that are similar to those facing ISVs (especially the lack of available, trained resources). In addition, those enterprises have some specific concerns:


•·         It's hard to justify internally the high total cost of ownership (TCO) of the legacy application. As enterprises are trying to reduce operational costs, there is an ongoing effort to lower costs such as the IT TCO.

•·         Users find the application "green-screens" difficult to work with compared to other Web-based applications they are accustomed to using.

•·         Existing IT staff, especially the younger developers, want to get real experience in newer development environments.

•·         Lack of agility causes problems when new functionality is needed to enhance the application.

•·         Creation of sporadic solutions, like screen-scraping, increase the cost while leaving the legacy pains untouched.

•·         Integration of business processes and data is complex and expensive.


Call for Action

In recent years, IBM has tried various solutions to mitigate some of these challenges, such as pushing the ISV and enterprise community toward Java, EGL, screen-scraping (with HATS), or even PHP. But these solutions did not provide the desired outcome, and it is now clear that while these solutions might buy some time, they do not solve the core problem.


The current situation calls for immediate action. ISVs and enterprises must recognize that it is time to move on, though it is in their interest to find ways to leverage their existing knowledge and investments. A proactive approach is needed to preserve these investments while creating a viable path to the future.


The competitive advantage of enterprises and application vendors is their expertise in a specific vertical market (manufacturing, energy, insurance, and so on). Over the years, a great deal of knowledge was gathered into the software, and keeping this knowledge is a significant need. This knowledge is the real added value that an ISV can offer to its customers, and an IT department can contribute to the profitability of the business.


Choosing the Right Solution for the Challenge

There are three main alternatives, and each one encapsulates advantages and disadvantages alongside a certain amount of risk. As each enterprise and ISV is facing a different reality, all of the options should be considered, and the best alternative for a specific case should be chosen.


For details about the different solutions and their advantages and disadvantages, we invite you to download the free white paper "The System i Challenge."

The IBM business model is built to support two principal goals: helping clients succeed in delivering business value by becoming more innovative, efficient and competitive through the use of business insight and information technology (IT) solutions; and, providing long-term value to shareholders. The business model has been developed over time through strategic investments in capabilities and technologies that have the best long-term growth and profitability prospects based on the value they deliver to clients. The company's strategy is to focus on the high-growth, high-value segments of the IT industry. The company's global capabilities include services, software, hardware, fundamental research and financing. The broad mix of businesses and capabilities are combined to provide business insight and solutions for the company's clients.