IBM i Licensing in the Cloud: Entitlement Transfer, Subscription, and BYOL

IBM began moving IBM i to subscription pricing in May 2022 at the P05 tier, initially on the 4-core Power S914 and then the S1014, per IT Jungle. In spring 2024, IBM withdrew the ability to buy new non-expiring (perpetual) IBM i entitlements for the P05 and P10 tiers. The exact date is reported inconsistently (IBM’s community notice says March 26, 2024; reseller Mainline cites May 7, 2024), but the direction was unambiguous.

The July 8, 2025 Power11 announcements finished the job. IBM introduced the P20 Standard Edition and P30 Enterprise Edition subscription bundles, made IBM i on Power11 available only through subscription (excepting serial-preserving upgrades such as E1080 to E1180), and withdrew perpetual P20 and P30 OS licenses effective January 1, 2026. The net effect as of 2026: new IBM i OS licenses are effectively subscription-only across all tiers, while existing perpetual licenses remain usable on existing machines. Subscription terms run 1 to 5 years, are non-cancellable during the term, and bundle software maintenance into the recurring fee, per IBM’s subscription transformation FAQ. The new bundles are also fatter: IBM’s published P30 Enterprise Edition list includes BRMS, PowerHA SystemMirror for i, Db2 Mirror for i, and PowerSC, with P20 Standard Edition positioned around resilience and security tooling. Verify the exact contents against IBM’s current documentation before pricing against them.

IBM Power Virtual Serverprices IBM i per core, metered hourly and billed monthly, and the rate includes the operating system license and IBM software maintenance. The part that surprises teams: you cannot bring your own IBM i OS license to PowerVS. IBM’s FAQ states the license is part of the overall workspace cost and “you cannot use an existing license that you already purchased”; even a customer-supplied custom image still pays for the OS on the instance. The partial offset is IBM’s “movable IBM i” option (IBM i MOL): clients with on-premises entitlements under active SWMA can move them to PowerVS at a reduced rate, billed under “mobile core-hour, SWMA paid” part numbers. The discount size is not published; IBM says to contact support.

What the standard rate buys is broad: 5770-SS1 with unlimited users plus a long list of LPPs at no extra charge, including BRMS, HTTP Server, Performance Tools, and Query for i. Three LPPs are separately priced, must be ordered through PowerVS, and per IBM’s documentation cannot reuse existing licenses: Cloud Storage Solutions (5773-ICC), PowerHA for i (5770-HAS), and Rational Development Studio (5770-WDS). Passport Advantage products (IBM’s examples: Rational Developer for i, MQ, Db2 Connect) generally can come along under IBM’s BYOSL policy.

Since mid-2025, PowerVS also supports assignable IBM i virtual software tiers on Power10 and later hosts, from P05 (capped at 1 virtual processor and 64 GB) up to an uncapped P30. The assigned tier sets the OS and LPP rate and can be changed by powering the instance off; billing adjusts automatically. Combined with fractional cores from 0.25 and shared processor pools that avoid additional per-VSI core software charges, this is where most PowerVS licensing tuning happens. Use the Power cloud cost estimator to rough out the per-core math.

Managed hosting works on the opposite premise from PowerVS: your entitlements can move. An IBM i license transfer is a permanent move of perpetual entitlements from one machine serial to another. IBM’s transfer FAQ sets the ground rules: the receiving machine must have activated processors available, “banking” transferred entitlements is not allowed, and entitlements on a leased donor machine must be transferred before the lease ends.

Transfers are fee-based per core, and fees rose July 1, 2025. According to IT Jungle’s coverage of IBM announcement AD25-1142, transfer features 1449 and 1450 rose 9 percent to $26,482 per core, while features 1448 and 1451 (which cover same-group and lower-group moves) rose 33 percent to $8,954 per core. At those rates, transfer fees deserve their own line in the business case; transferring is not automatically cheaper than subscribing fresh.

MSPs hosting IBM i on machines they own have three IBM routes, per IBM’s MSP licensing options document: non-expiring licenses where still available, subscription term licenses, or the Service Provider Monthly Licensing offering. VSNs matter here: a VSN on an MSP-owned machine must be assigned to the end client’s customer number, which lets you transfer your own entitlements to the provider’s hardware. Ask IBM or your business partner whether subscription term licenses can move between serials mid-term and whether transfer fees apply to them; the published per-core fees clearly apply to perpetual entitlements.

Old releases carry a licensing surcharge in the cloud, not just risk. IBM i 7.3 ended normal support on September 30, 2023, and since then PowerVS automatically adds Service Extension pricing to the IBM i charge for 7.3 usage, under per-tier “service extension core-hour” part numbers. IBM i 7.4 is next: IBM announced end of standard support on September 30, 2026, with new 7.4 licenses and subscriptions unavailable after April 30, 2026 and a paid Service Extension running through September 30, 2029. Our IBM i 7.4 end-of-support guide works through that decision.

Service Extension is narrower support at a higher price: IBM stops issuing new Technology Refreshes and provides fixes for serious defects only. On cost, partner materials (UK IBM partner Recarta among them) describe contracts starting near double standard software maintenance and rising in later years; one summary of IBM’s Service Extension document puts the extended 7.3 period at roughly three times base SWMA. Multipliers vary by release, year, and contract: treat them as directional and verify with IBM or a business partner.