AS400 modernization services have become a strategic priority as legacy systems reach the end of viability. AS400 systems, now known as IBM Power Systems, have supported banks, insurers, manufacturers, and healthcare organizations for more than three decades. As many of the experts who built and maintained these environments near retirement, companies risk losing valuable institutional knowledge. This reality turns modernization from a simple technical upgrade into a strategic priority for long-term continuity.
Organizations that depend on IBM i systems face a major challenge due to this talent gap. RPG, COBOL, or CL run most AS400 environments, yet the pool of skilled developers shrinks faster. The application modernization market shows promising growth, and experts predict it will reach USD 98.38 billion by 2034, with a 16.80% growth rate between 2025 and 2034. This growth underscores the urgent need for IBM application modernization services, as companies seek to upgrade aging infrastructure and ensure long-term resilience.
Cost concerns make things even more complicated. When companies put modernization on hold, expenses tend to creep up as they rush into emergency fixes or depend on niche contractors. A “wait and see” approach usually backfires because it adds risk and throws long-term planning off track. Now is the time to take a closer look at when to modernize IBM i applications and how to build an effective migration plan with the right IBM i modernization company.
Table of Contents
Identifying Technical Debt in AS400 Systems
Technical debt in AS400 systems extends far beyond basic code inefficiencies. These accumulated liabilities restrict business agility and drive up operational costs as organizations maintain legacy systems.
Legacy RPG and COBOL Codebase Challenges
AS400 systems present major hurdles for organizations with aging codebases. These legacy systems operate with slow development cycles, and their monolithic program structures need thorough testing for each update. Companies wait months for minor changes while their competitors with modern systems roll out new features within weeks. The complex nature of AS400 codebases makes it hard to refactor without disrupting core functions.
Dependency on Aging IBM i Hardware
New IBM i OS versions often need new hardware because older servers might not work with the latest software. This makes infrastructure upgrades essential, and organizations must also plan for installation and data migration to ensure a smooth transition.
Hardware dependencies create ongoing issues:
- High maintenance costs (HVAC systems, 24/7 monitoring, UPS)
- Risk of extended downtimes from hardware failures
- Absence of user-friendly monitoring dashboards
Lack of Integration with Cloud and APIs
AS400 applications have trouble connecting with modern analytics, cloud services, and APIs. Most systems need custom connectors or manual exports that hold back progress. Native AS400 applications lack built-in support for RESTful APIs, making middleware essential for integration. This makes immediate data access difficult and limits the use of emerging technologies like AI and machine learning.
Shrinking Talent Pool for IBM i Expertise
The biggest challenge for IBM i systems is finding skilled people to maintain them. The experts who’ve handled them for years are retiring, and younger engineers rarely choose this tech anymore. That leaves businesses scrambling for whoever is still available, which usually means higher salaries or expensive consultants. All of this adds pressure, and it’s pushing organizations to finally make IBM i modernization a priority.
When to Start Planning AS400 Modernization
“In short, sticking with the AS400 isn’t just about maintaining the status quo—it’s betting that nothing will go wrong, that talent won’t dry up, and that competitors won’t outpace you, and that your business doesn’t need new feature sets. That’s not a safe strategy. It’s a gamble, and one that becomes riskier with every passing year.” — John Barker, Principal Consultant, ArgonDigital (legacy modernization expert)
You need a full picture of several key factors to know when AS400 modernization makes sense. Too often, organizations delay action and only respond once problems arise, rather than planning proactively.
Signs Your AS400 System Is Holding You Back
Hardware limits often highlight when you need AS400 modernization services. Legacy IBM i systems were not designed for the elasticity, automation, or real-time demands of today’s cloud-first businesses.
Your aging infrastructure makes it hard to work with modern technologies:
- Cloud services and APIs don’t connect well
- RESTful interfaces lack native support
- Modern DevOps practices are tough to implement
Business Risks of Delaying Modernization
Your company faces technical problems when you put off IBM i application modernization. Organizations deal with increasing continuity risk as senior administrators retire and take their knowledge about custom integrations, batch jobs, and security procedures with them. This creates a dependency on fewer available experts. Your competitors gain an edge with cloud-native technologies while you spend time building workarounds instead of innovating.
Compliance and Data Retention Pressures
Many companies keep AS400 systems just to access old data. The data sits in outdated formats that are hard to search or verify, which creates regulatory compliance issues. Government rules often require you to keep financial or employee records, among other industry-specific compliance needs. These requirements mean you must collect data regularly, which gets harder as AS400 expertise becomes scarce.
Cost Implications of Maintaining Legacy Systems
The cost of delaying IBM i modernization continues to rise as vendors reduce support incentives. Over time, maintaining legacy systems becomes more expensive than replacing them, creating a tipping point where modernization is the smarter financial choice. Traditional on-premise servers also bring high hosting and maintenance overheads, while cloud options offer more efficient and cost-effective alternatives.
You should work with an experienced IBM i modernization company before these challenges turn into serious business problems.
How to Plan AS400 Modernization Without Disruption
AS400 modernization needs careful planning to avoid disrupting operations. Mission-critical operations make up a majority of IBM i workloads, which makes the migration process crucial.
Inventorying Applications and Dependencies
The first step in planning AS400 modernization services is to find all assets that need to be migrated. You need a detailed inventory of all applications, batch jobs, and system integrations on your IBM i system. Map out how different systems connect to each other since hidden legacy connections can delay migrations and drive up costs. Clear documentation of these relationships ensures that processes remain intact and minimizes the risk of disruption after migration.
Choosing Between Rehost, Replatform, and Re-architect
Your business priorities should guide the modernization approach:
- Rehosting (Lift-and-Shift): Moves workloads “as-is” quickly with minimal changes
- Replatforming: Makes small improvements for better cloud performance while keeping core logic intact
- Re-architecting: Completely redesigns for cloud-native features to maximize long-term flexibility
Data Extraction and EBCDIC to ASCII Conversion
Data migration becomes challenging because IBM i data uses EBCDIC encoding instead of ASCII. You must implement conversion tables correctly to handle packed decimals and other IBM-specific formats. Without accurate conversion, numeric values can become corrupted during migration.
Parallel Run and Rollback Strategy
A clear rollback strategy must be part of every migration plan. Set up your backups, snapshots, and restoration processes early. Your team should run legacy and cloud systems side by side to match their outputs and ensure consistent logic.
Validating Data Integrity Post-Migration
Data validation becomes critical after migration. Use On Check commands to run integrity checks that verify your data’s accuracy. The migration pipeline needs automated checks to build confidence before the final cutover.
Conclusion
AS400 modernization is a critical business decision, not just another technical upgrade. Companies face growing pressure as AS400 expertise becomes scarce. This talent shortage and mounting technical debt create an urgent need to act, making modernization essential for long-term stability and growth.
Technical debt shows up in all kinds of ways—old RPG code, hardware that’s past its prime, and systems that don’t connect well with newer tools. Businesses need to notice these issues early, before they turn into outages or stalled projects. The costs add up fast, especially as legacy systems become harder and more expensive to maintain.
A smooth migration starts with a clear plan. That usually means taking stock of every application and understanding how they depend on each other. From there, teams choose whether to rehost, replatform, or fully re-architect. And since IBM i environments often rely on EBCDIC, moving data to ASCII also needs extra care to ensure accuracy and prevent disruptions.
Organizations using AS400 systems need to take a hard look at their technical debt and map out a practical modernization plan. Companies that address IBM i application modernization early see important benefits: faster operations, lower long-term costs, and systems that connect more easily with modern tools.
Leave a Reply