AS/400 Total Cost of Ownership (TCO): Real Numbers, Case Studies & Cost Drivers

What Is AS/400 Total Cost of Ownership (TCO)?

AS/400 Total Cost of Ownership (TCO) refers to the complete long-term cost of running and maintaining an IBM i system, including hardware, software, licensing, staffing, maintenance, energy, upgrades, and operational overhead. AS/400 System Savings: Why the Old Workhorse Still Wins on Cost

In 2026, many enterprises are re-evaluating legacy infrastructure costs. Surprisingly, when analyzed properly, AS/400 systems often deliver lower long-term TCO compared to cloud-only or full migration strategies.

Understanding the real numbers behind AS/400 TCO is critical for CIOs and CFOs making modernization decisions.

Why TCO Matters More Than Initial Cost

Many organizations focus only on upfront expenses, such as:

• Hardware refresh

• Migration project cost

• Licensing fees

However, TCO includes ongoing costs over 5–10 years.

A low initial migration cost may lead to:

• Higher recurring cloud subscriptions

• Increased data transfer charges

• Security compliance expenses

• Re-architecture costs

• Ongoing consulting fees

TCO provides a clearer financial picture.

Key Components of AS/400 Total Cost of Ownership

1. Hardware Costs

Modern IBM i systems are highly efficient.

Hardware costs typically include:

• Server purchase or leasing

• Maintenance contracts

• Power and cooling

• Data center space

AS/400 systems are known for longevity, often running reliably for years with minimal downtime.

Unlike distributed environments, they consolidate workloads efficiently.

2. Software Licensing and Subscription Costs

Software expenses may include:

• Operating system licensing

• Database licensing

• Third-party application licenses

• Backup and recovery tools

Compared to multi-layer cloud stacks, AS/400 environments often have fewer software layers, reducing complexity.

3. Staffing and Operational Costs

Staffing costs depend on:

• IBM i administrators

• Security specialists

• Application developers

• Infrastructure engineers

Although IBM i talent is specialized, the platform’s stability often requires fewer administrators compared to distributed systems.

Less patching and fewer outages translate to lower operational overhead.

4. Maintenance and Support

Ongoing costs include:

• Vendor support contracts

• Hardware servicing

• Software updates

• Security monitoring

AS/400 systems have a reputation for stability, reducing emergency maintenance costs.

Downtime is expensive — stability saves money.

5. Downtime and Productivity Impact

Unplanned outages can cost enterprises millions.

AS/400 platforms are widely recognized for:

• High availability

• Integrated architecture

• Fewer integration points

• Lower failure rates

Reduced downtime significantly improves ROI.

6. Migration and Modernization Costs

When companies consider replacing AS/400, costs may include:

• Application rewrites

• Data migration

• Testing and validation

• Compliance re-certification

• Employee retraining

• Business disruption

Migration projects often exceed initial budget estimates.

These hidden costs dramatically impact TCO comparisons.

Real Cost Comparison: AS/400 vs Cloud Migration

Cost Category	AS/400	Full Cloud Migration
Initial Cost	Moderate	High
Subscription Fees	Low	Recurring & Increasing
Downtime Risk	Low	Medium to High
Security Overhead	Built-in architecture	Additional tools required
Staffing Complexity	Centralized	Distributed teams
5-Year TCO	Predictable	Often higher than expected

While cloud offers flexibility, long-term recurring expenses can exceed expectations.

Hidden Cost Drivers Many Enterprises Overlook

1. Data Transfer Fees

Cloud environments charge for:

• Data ingress and egress

• API calls

• Storage tier changes

High transaction environments can incur significant ongoing costs.

2. Compliance Re-Engineering

When migrating systems:

• Audit controls must be rebuilt

• Security frameworks must be redesigned

• Data retention policies must be reconfigured

Compliance redesign is expensive and time-consuming.

3. Application Rewrites

Legacy code conversion is rarely straightforward.

Costs increase due to:

• Business logic complexity

• Custom integrations

• Data dependencies

• Testing requirements

Many rewrite projects take years.

4. Talent and Skill Gaps

Cloud-native environments require:

• DevOps engineers

• Cloud security experts

• Infrastructure architects

Recruiting and retaining these professionals can increase staffing budgets.

Case Example: Mid-Sized Manufacturing Enterprise

A manufacturing company evaluated:

Option A: Full AS/400 replacement
Option B: Incremental modernization

Findings:

• Full migration projected cost (5 years): 2.5x higher

• Downtime risk: Increased during transition

• Compliance rebuild: Required 12 months

• Retraining cost: Significant

The company chose incremental modernization, reducing projected 5-year costs by 35%.

This type of scenario is common across industries.

When Does Cloud Migration Make Financial Sense?

Cloud may be beneficial when:

• Workloads are highly variable

• Rapid scaling is required

• Global accessibility is critical

• Legacy applications cannot be modernized

But migration should follow detailed financial modeling.

How to Calculate Your AS/400 TCO

Follow these steps:

Step 1: List All Direct Costs

Include hardware, software, staffing, maintenance.

Step 2: Estimate Downtime Costs

Calculate cost per hour of outage.

Step 3: Include Migration Scenarios

Model rewrite and transition costs.

Step 4: Project 5–10 Year Timeline

Avoid short-term bias.

Step 5: Compare Against Hybrid Alternatives

Hybrid modernization often offers balanced ROI.

Strategic Insight for CIOs

In 2026, infrastructure decisions are not about “legacy vs modern.”

They are about:

• Financial sustainability

• Operational resilience

• Risk management

• Compliance stability

• Long-term innovation capacity

AS/400 often wins on predictability and stability.

FAQs: AS/400 Total Cost of Ownership

Is AS/400 cheaper than cloud infrastructure?

In many long-term scenarios, yes. While cloud may appear cheaper initially, recurring subscription and data transfer costs often increase overall TCO.

What is the biggest hidden cost in system migration?

Application rewrite complexity and compliance redesign are typically the most underestimated cost drivers.

How long should TCO be evaluated?

Enterprises should model TCO over at least 5–10 years for accurate financial comparison.

Does AS/400 require large IT teams?

Not necessarily. Its integrated architecture often requires fewer administrators compared to distributed cloud environments.

Can AS/400 systems still scale in 2026?

Yes. Modern IBM i systems support scalable workloads, especially when combined with API integration and hybrid strategies.

Conclusion

AS/400 Total Cost of Ownership in 2026 remains highly competitive — often outperforming full migration strategies when long-term financial analysis is applied.

While modernization is important, replacement is not always the most cost-effective solution.

Smart enterprises evaluate:

• Stability

• Downtime risk

• Compliance complexity

• Long-term subscription costs

• Operational overhead

Before making infrastructure decisions.

The true financial advantage lies not in trends — but in strategic cost modeling.