The AS400 was designed to provide a robust, scalable, and secure environment for businesses to run mission-critical applications. Its key strengths include its reliability, integrated database (DB2), and ability to handle massive workloads without sacrificing performance. While now technically branded under IBM Power Systems, AS400 is often still referred to by its original name in many enterprises, reflecting its legacy status.
The system is particularly known for its “all-in-one” design, offering both hardware and software capabilities, which makes it highly attractive for companies looking for stability. Despite newer technologies such as cloud platforms and microservices gaining popularity, the AS400 remains a trusted system for certain industries due to its stability and security.
2. Industries That Still Use Legacy AS400 Systems
Several industries continue to rely on AS400 systems, primarily due to their durability, customization, and scalability. The sectors that are most commonly associated with AS400 usage include:
a) Manufacturing
Manufacturing companies are among the most common users of AS400 systems. AS400 is well-suited for managing complex supply chain logistics, inventory control, production planning, and order processing. Many manufacturing companies built custom applications on AS400 in the 1980s and 1990s to manage their specific needs, and these systems have proven to be robust, processing massive volumes of data daily. These companies often face challenges when attempting to transition to newer platforms due to the deep integration of AS400 into their manufacturing processes.
b) Retail
Retail organizations, especially large, multinational retailers, also continue to use AS400 systems. These systems are typically used to manage inventory, point-of-sale (POS) systems, pricing, and supply chain operations. The scalability and reliability of AS400 make it ideal for handling the heavy data processing demands of retailers. Companies like Walmart, which historically relied on AS400, found that it was able to support complex retail environments with vast amounts of transactional data.
c) Banking and Financial Services
The banking and financial services industries are known for their reliance on legacy systems, and AS400 has been a popular choice due to its security and reliability. AS400 systems power many back-end banking functions, such as transaction processing, risk management, compliance monitoring, and customer data storage. Banks require high levels of data security, and AS400’s robust security features, such as role-based access and encrypted communications, make it a trusted platform in this sector. Many financial institutions continue to use AS400 to run critical operations while gradually integrating newer technologies around it.
d) Healthcare
Healthcare organizations, including hospitals and pharmaceutical companies, often use AS400 to manage patient records, inventory, supply chains, and billing systems. The system’s reliability and ability to handle massive amounts of data ensure that hospitals can operate without interruptions. Regulatory compliance in healthcare, such as adherence to HIPAA (Health Insurance Portability and Accountability Act) standards, also makes the AS400 attractive due to its inherent security features.
e) Government and Public Sector
Various government agencies and public sector organizations continue to use AS400 systems. The public sector often lags behind the private sector in technological advancements, and AS400’s longevity and low maintenance costs make it appealing. Governments use AS400 for tax processing, social security, unemployment benefits, and law enforcement records. The costs associated with migrating these systems to newer platforms, combined with the need for high availability and security, mean that many government entities have opted to stick with AS400.
f) Logistics and Transportation
The logistics and transportation industries, which depend heavily on data for scheduling, tracking shipments, fleet management, and inventory control, have long trusted AS400 to handle these critical operations. AS400’s ability to integrate with ERP systems and its reliability in high-volume transaction environments makes it well-suited for companies in this space. Major shipping companies like FedEx and UPS have historically used AS400 services to manage their logistics operations, and while they may be transitioning to more modern systems, many logistics firms still rely on AS400 for core functions.
3. Why Companies Continue to Use AS400 Systems
Despite the advancement of newer technologies, companies continue to use AS400 systems for several reasons, including:
a) Reliability and Stability
The AS400 is known for its exceptional reliability and uptime, which is a critical factor for industries where downtime can result in significant financial loss. For over three decades, AS400 systems have been a cornerstone in industries that require constant availability, with companies appreciating its ability to run without interruptions or the need for frequent updates.
b) Cost of Migration
One of the primary reasons companies hesitate to move away from AS400 is the cost of migrating to new platforms. For organizations that have deeply embedded AS400 into their business processes, rewriting or replacing applications can be prohibitively expensive and time-consuming. Migration often involves not only the cost of new hardware and software but also retraining staff, redeveloping applications, and ensuring data integrity during the transition. The risks and costs associated with migration often outweigh the benefits for companies whose current systems are functioning adequately.
c) Custom Legacy Applications
Many companies built custom applications on the AS400 to meet their unique business needs. These applications may have been developed decades ago but remain mission-critical today. Replacing these custom applications with modern equivalents is not always straightforward, as newer systems may not offer the same degree of customization or may require extensive development work to replicate.
d) Security Features
While legacy systems are often criticized for their outdated security, AS400 is known for its robust security features. The platform includes advanced user authentication, data encryption, and role-based access control, which are essential for industries like finance, healthcare, and government. For businesses operating in highly regulated environments, the security and compliance features of AS400 are a strong reason for its continued use.
e) Scalability
AS400 is highly scalable, allowing companies to continue using the system as their businesses grow. The ability to handle increasing data volumes without performance degradation makes it a valuable asset for industries that require real-time data processing, such as retail and banking.
f) Integration with Modern Systems
While AS400 is a legacy system, it has been continuously updated by IBM and can integrate with modern technologies such as cloud services, web applications, and mobile platforms. This ability to integrate with newer systems allows companies to extend the life of their AS400 environments while still taking advantage of modern innovations.
4. The Future of AS400 Systems
Despite its reliability and continued use, the future of AS400 systems remains uncertain. As cloud computing, artificial intelligence, and advanced analytics become more mainstream, companies will eventually face pressure to modernize their IT infrastructure. Many organizations are adopting hybrid approaches, where they maintain their AS400 systems for core operations while migrating non-essential functions to cloud platforms or microservices architectures.
Some companies are investing in AS400 modernization services, which allow them to keep the core functionality of their AS400 systems while updating the interface and integrating modern technologies. This hybrid model offers a gradual approach to modernization, reducing the risk and cost of a complete migration.
Conclusion
Although the AS400 is considered a legacy system, its reliability, stability, and scalability have made it an enduring choice for companies in industries such as manufacturing, retail, banking, healthcare, and logistics. The cost of migration, coupled with the deep customization of legacy applications, means that many organizations are opting to retain their AS400 systems while integrating them with modern technologies. As businesses continue to evolve, the decision to modernize or maintain AS400 systems will depend on the specific needs of the organization, their budget, and their long-term IT strategy.
