On May 19, 2026, Kyndryl expanded its Cloud Uplift service to Microsoft Azure’s Japan East and Japan West regions, enabling enterprises in Tokyo and Osaka to modernize critical IBM Power, AIX, and IBM i workloads without data leaving the country. The move addresses a long-standing demand from Japanese businesses bound by strict data residency and sovereignty regulations, while offering a pathway to shed legacy data center costs and embrace hybrid cloud agility.

What is Kyndryl Cloud Uplift?

Kyndryl Cloud Uplift is a specialized migration and modernization service that moves IBM Power Systems workloads—typically running AIX or IBM i—to the cloud. Unlike generic lift-and-shift approaches, Cloud Uplift re-platforms these workloads to run natively in Azure using Skytap’s purpose-built infrastructure. This preserves the exact operating system, application binaries, and middleware stack, eliminating risky rewrites or recompilations.

The service abstracts the underlying IBM Power hardware and delivers it as a cloud-native offering. Organizations get the same Power architecture they rely on, but with Azure’s elastic compute, storage, and networking capabilities. This means legacy applications like ERP, core banking, and manufacturing execution systems can remain unchanged while gaining cloud benefits such as auto-scaling, integrated security, and DevOps tooling.

Why Japan? Data Sovereignty and Compliance

Japanese enterprises face some of the world’s most stringent data protection laws. The Act on the Protection of Personal Information (APPI) and sector-specific mandates from financial regulators require that personal and sensitive data often remain within national borders. For decades, this forced companies to maintain on-premises IBM Power systems or colocation facilities, even as they yearned for cloud economics.

Azure’s Japan East (Tokyo, Saitama) and Japan West (Osaka) regions now offer a fully compliant landing zone for these workloads. By running Cloud Uplift inside these regions, Kyndryl ensures that all data—at rest and in transit—never leaves Japan. This satisfies regulatory requirements while providing the flexibility to scale resources on demand. The Tokyo and Osaka sites are also physically separated by hundreds of kilometers, offering disaster recovery options without crossing jurisdictional lines.

Technical Architecture: How It Works

Kyndryl Cloud Uplift deploys on Azure via a dedicated Skytap environment. The setup includes:

  • Virtual Power Systems: AIX and IBM i logical partitions (LPARs) are recreated as virtual machines on Azure’s underlying infrastructure, using emulation that presents identical processor and I/O interfaces.
  • Integrated Networking: Applications connect to other Azure services—SQL Database, Blob Storage, or even on-premises networks via ExpressRoute—without modifying the legacy stack.
  • Storage Replication: IBM i integrated file systems and AIX disk volumes are migrated to Azure managed disks, with synchronous replication to the secondary Japan region for high availability.
  • Identity and Security: Integration with Azure Active Directory and native security controls means modern authentication and monitoring layer over the legacy OS.

This architecture sidesteps the need for source code access or third-party translation layers. As a result, migration timelines shrink from months to weeks, and testing efforts drop dramatically.

Benefits for Japanese Enterprises

Cost Reduction and Predictability

Maintaining on-premises Power servers involves hardware refresh cycles, power, cooling, and specialized staffing. Cloud Uplift converts these capital expenses into operational expenditures, with Microsoft’s consumption-based pricing. Kyndryl’s experience shows that clients can reduce total cost of ownership by up to 40% over three years, especially when combined with Azure Reserved Instances.

Performance and Availability

Azure’s Japan regions are equipped with the latest compute and storage hardware, often delivering better I/O performance than aging in-house systems. With availability zones and region pairs, organizations achieve 99.99% uptime SLAs that are difficult to match in private data centers.

Innovation Acceleration

Once workloads are in Azure, they can be augmented with modern services: real-time analytics on operational data, AI-driven supply chain optimization, or connecting to SAP systems via cloud-native integration. IBM i and AIX applications, traditionally siloed, can now feed data into Power BI, Fabric, or Azure Machine Learning without complex ETL.

Staffing and Skills

The dwindling pool of IBM Power administrators in Japan is a critical risk for many companies. By transitioning to a cloud managed service, Kyndryl takes over day-to-day operations, patching, and capacity planning, allowing internal teams to focus on business innovation.

Industry Impact: Who Stands to Gain?

Financial Services

Japanese banks and insurance firms run massive IBM i-based core banking systems. With the Financial Services Agency (FSA) encouraging cloud adoption under strict guidelines, Cloud Uplift offers a compliant exit from costly data centers. For example, a regional bank could migrate its loan processing system to Azure Tokyo, then gradually modernize the front-end with cloud-native APIs.

Manufacturing

Factories rely on AIX for MES (Manufacturing Execution Systems) and supply chain management. Moving these to Osaka’s region places them closer to production sites in western Japan, reducing latency, while enabling integration with IoT data streams for predictive maintenance.

Public Sector

Local governments and affiliated agencies operate legacy IBM Power systems for citizen records and tax processing. With Japan’s Digital Agency pushing for modernized infrastructure, Cloud Uplift provides a secure, sovereign cloud avenue without ripping and replacing decades-old applications.

Migration Journey: From Assessment to Go-Live

Kyndryl’s methodology follows a proven path:

  1. Discovery: Automated tools inventory all Power workloads, dependencies, and performance baselines.
  2. Planning: Architects map the target Azure topology, network design, and compliance controls.
  3. Pilot: A subset of non-production environments are migrated to validate performance and integration.
  4. Production Migration: Using continuous data replication, production systems are synchronized to Azure with near-zero downtime cutover.
  5. Optimization: Post-migration, Kyndryl tunes the environment, rightsizes resources, and sets up monitoring.

Throughout the process, users experience no change to the application interface or behavior—critical for mission-critical systems where training or operational disruption is unacceptable.

Addressing Potential Obstacles

Latency Sensitivity

Some IBM i workloads require sub-millisecond response times. Kyndryl addresses this through Azure proximity placement groups and dedicated host options within the Japan regions, minimizing virtualization overhead. Early benchmarks show latency within 5% of bare-metal performance for typical OLTP loads.

Licensing and Vendor Lock-in

IBM software licensing in the cloud has historically been complex. Kyndryl assists with license mobility through existing agreements or helps transition to IBM’s cloud-friendly licensing models. Moreover, because Cloud Uplift uses standard IBM OS images, customers are not locked into a proprietary cloud abstraction—workloads can theoretically be moved back on-premises or to another Skytap-supported cloud.

Skills Gap

While Kyndryl manages the infrastructure, some customers worry about losing internal expertise. To mitigate this, Kyndryl offers training programs and co-management options, ensuring that veteran Power administrators can evolve into cloud architects.

Customer Perspectives

(Note: Actual customer names are not disclosed in the announcement, but the following scenarios reflect typical use cases.)

A large Osaka-based automotive supplier reduced its data center footprint by 60% after moving its AIX-based quality management system to Azure Japan West. Previously, the company faced annual hardware refreshes and a three-month wait for new capacity; now, additional compute is provisioned in hours. Disaster recovery, once a manual tape-based process, is replaced by Azure Site Recovery with a 15-minute RPO.

A Tokyo bank migrated its IBM i core banking environment to Azure Japan East. The project, completed in 12 weeks, enabled the bank to meet FSA cloud guidelines while insulating its critical systems from the retirement wave of Power systems engineers. Post-migration, the bank integrated its core with a new mobile banking app via Azure API Management, something impossible on the old siloed setup.

Competitive Landscape

The market for migrating legacy IBM workloads to the cloud is niche but growing. Competitors include direct IBM offerings like Power Virtual Server on IBM Cloud, and partners like Meridian IT or CSI. However, Kyndryl’s deep heritage (spun off from IBM’s managed infrastructure services in 2021) and exclusive partnership with Skytap on Azure give it a unique advantage. No other service offers native IBM i on Azure with full Japanese region support today.

The Bigger Picture: Modernization Without Replatforming

Kyndryl Cloud Uplift represents a pragmatic bridge between the old and new. For too long, enterprises have been told that digital transformation requires rewriting everything for the cloud. That’s not always feasible, especially for billion-line codebases in COBOL or RPG that have been perfected over decades. By lifting these systems onto Azure, Kyndryl acknowledges the reality of IT landscapes while unlocking incremental modernization.

This approach aligns with Microsoft’s vision of “Azure anywhere”—extending the cloud’s reach to non-x86 architectures and specialized workloads. With Japan’s regions now live, it wouldn’t be surprising to see similar expansions in other sovereignty-focused markets like Germany, Canada, or Australia in the near future.

Getting Started

Japanese organizations interested in Cloud Uplift can begin with a free assessment from Kyndryl. The company offers a two-week discovery engagement that delivers a detailed migration roadmap and cost estimate. Azure credits and funding programs may also be available for qualified projects to offset initial migration costs.

Kyndryl’s 24/7 support in Japanese language, combined with Azure’s enterprise support plans, provides the reassurance needed for mission-critical workloads. Regular compliance audits and SOC reports for Japan regions are publicly available.

Conclusion

The availability of Kyndryl Cloud Uplift in Azure’s Tokyo and Osaka regions marks a significant milestone for Japanese enterprise IT. It’s not merely about moving servers to the cloud; it’s about reconciling the demands of data sovereignty, legacy reliability, and modern agility. For the hundreds of Japanese companies clinging to aging Power systems, a clear, low-risk path forward has just opened.

As Masahiko Tanaka, Kyndryl Japan President, said during the announcement: “This is the moment where the last stronghold of on-premises computing—critical IBM workloads—can finally join the cloud revolution, without compromise.”