Consolidate with Oracle Engineered Systems and Cut Your Costs

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Learn about Oracle Engineered Systems and why they enable you to achieve new levels of consolidation and performance. But are they engineered to cut costs? Hear about real world examples of how organisations have leveraged Oracle Engineered Systems to lower TCO and increase ROI. Discover a simple yet comprehensive framework to measure your data centre costs and bring financial clarity to IT operations. Reuse the framework to engineer monetary value of your own consolidation project.

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Consolidate with Oracle Engineered Systems and Cut Your Costs

  1. 1. Consolidate with Oracle Engineered Systems and Cut Your CostsIP EXPO 2011 | 19th of October | 2011Sergey DanilovOracle UK Customer Solutions
  2. 2. Engineered SystemsDriving trend in IT for the next decade • Engineered to work together • Tested together • Certified together • Packaged together • Deployed together • Upgraded together • Managed together • Supported together • Reducing Costs together • Great for Consolidation Copyright © 2011, Oracle. All rights reserved.
  3. 3. Quote“ IT Must Learn to Build Compelling Business Cases. 2010 marks the year inwhich IT needs to demonstrate true line of sight to business objectives for everyinvestment decision. IT leaders can no longer look at IT as a percentage ofrevenue. CIOs must benchmark IT according to business impact.“ -- Gartner Copyright © 2011, Oracle. All rights reserved. 3
  4. 4. Contents• Case for Change• “Art of The Possible”• TCO / ROI Process Review• TCO Model – A Little Look Under The Covers• Next Steps Copyright © 2011, Oracle. All rights reserved. 4
  5. 5. Consolidation Can Allow Organisations to Realise Dramatic Simplification … Current State Future State Servers • Database Infrastructure Consolidation Simplified Database • Server Private Consolidation Cloud • Storage Storage Consolidation• No resource sharing; islands of computation.• No single source of truth-- low data quality.• Staff is involved in low value-added tasks. “Fewer databases with more stuff in them”• Too many moving pieces/interactions.• + zillion other pains… Copyright © 2011, Oracle. All rights reserved. 5
  6. 6. … But Some Scoping and Sizing Efforts Are Needed to Measure Magnitude of Cost Cutting Opportunity … Current State 1,828 Future StateServers • Database 281 Infrastructure Consolidation Simplified Database • Server Private Consolidation Cloud 1,382 Tb • Storage 264 TbStorage Consolidation Infrastructure Component Current Future Reduction Database Servers 1,828 281 6.5 times Storage (Tb) 1,382 264 5.2 times Copyright © 2011, Oracle. All rights reserved. 6
  7. 7. … Followed by Compelling Business Case (How Much We Can Cut? How? With What Investment? What ROI?) Current State Future State“As Is” TCO for 5 years: £130 M “To Be” TCO for 5 years: £30 M INVESTMENT: • Hardware Costs • Software Costs • Migration Costs Current TCO Future TCO Cost Reduction £130 M £30 M £100 M Copyright © 2011, Oracle. All rights reserved. 7
  8. 8. Cutting Costs Means Measuring Costs First“If you can’t measure it – you can’t manage it” Copyright © 2011, Oracle. All rights reserved. 8
  9. 9. Cutting Costs Means Measuring Costs First“If you can’t measure it – you can’t manage it” Copyright © 2011, Oracle. All rights reserved. 9
  10. 10. Cutting Costs Means Measuring Costs First“If you can’t measure it – you can’t manage it” What I hear in Oracle: • “In God we trust. All others must bring Data” -- Jeff Espstein, Oracle CFO • “I come from Wall Street, and youll never see me do a PowerPoint because Im all about Excel spreadsheets” -- Safra Catz, Oracle President Copyright © 2011, Oracle. All rights reserved. 10
  11. 11. Where We Are Now?… Where We Want To Be?… Y axis = Business Value Value For Money Success at All Costs• Lower data center costs Organisations• Reduced carbon footprint Many:1 Migration, who have spent a fortune Consolidated, Virtualised• Agility and performance with Tiered Storage and to get business value• Highly available infrastructure Compression• Max use of investment ‘Server By• Lower risks Server’ Upgrades Challenges we hear from majority of large customers: • Server Sprawl No Investment – No Value Low Value for Money • ‘End Of Life’ infrastructure • Underutilisation of IT resources Architecture Limit • Very complicated IT environment • Fragmented organisation: Separate teams are responsible for Storage, Network, Servers, Databases, Applications, etc. • Long History of Tactical IT Decisions Current State: Low Value with Substantial TCO X axis = TCO Source: Oracle experience with major corporations; TCO and ROI financial modeling Copyright © 2011, Oracle. All rights reserved. 11
  12. 12. … And What Does It Mean In Numbers? Y axis = Business Value Value For Money Success at All Costs• Lower data center costs Organisations• Reduced carbon footprint Many:1 Migration, who have spent a fortune Consolidated, Virtualised• Agility and performance with Tiered Storage and to get business value• Highly available infrastructure Compression• Max use of investment 5 year perspective: ‘Server By• Lower risks TCO: £10.9M Server’ Upgrades 5 year perspective: Investment: £3.9M TCO: £26.5M NPV: £11.1M Investment: £4.5M ROI: 284% Challenges we hear from NPV: £1.3M ROI: 17% majority of large customers: • Server Sprawl No Investment – No Value Low Value for Money • ‘End Of Life’ infrastructure • Underutilisation of IT resources Architecture Limit • Very complicated IT environment 5 year perspective: • Fragmented organisation: TCO: £32M Separate teams are responsible for Investment: £6.2M Storage, Network, Servers, NPV: £0.2M Databases, Applications, etc. ROI: -15% • Long History of Tactical IT Decisions Current State: ‘As Is’ 5 year perspective: TCO: £27M TCO: £33M X axis = TCO Source: Oracle experience with major corporations; TCO and ROI financial modeling Copyright © 2011, Oracle. All rights reserved. 12
  13. 13. Contents• Case for Change• “Art of The Possible”• TCO / ROI Process Review• TCO Model – A Little Look Under The Covers• Next Steps Copyright © 2011, Oracle. All rights reserved. 13
  14. 14. Large UK UniversityMigration to Exa* from EMC Storage and Enterprise SPARC servers Key Highlights: • ‘As Is’ TCO ~£13M • ’To Be’ TCO ~£9M • Two storage engineers shifted to higher value generating positions • Two fold reduction of energy footprint (part of customer global strategy) • Two fold reduction of floor space (not quantified) • No Volume Managers and 3rd Party Software Copyright © 2011, Oracle. All rights reserved. 14
  15. 15. ‘Non-Ministerial Department’ of UK GovernmentRenewing SPARC Enterprise Server Estate on a 1:1 BasisINVESTMENT COSTS AND BENEFITS NET PRESENT VALUE£ ‘000s £ ‘000,000s NPV: 1.62M 473,729 473,729 473,729 473,729 355,297 1.62 Payback: ~c15 1.22 months 0.79 -65,607 -65,607 -65,607 -65,607 0.33 Costs Benefits (0.17) -524,856 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 Copyright © 2011, Oracle. All rights reserved. 15
  16. 16. ‘Non-Ministerial Department’ of UK GovernmentConsolidating and Virtualising SPARC Volume ServersINVESTMENT COSTS AND BENEFITS NET PRESENT VALUE£ ‘000s £ ‘000,000s NPV: 7.52M Costs Benefits 8 7 7.52 6 6.03 1,952,000 1,952,000 1,952,000 1,952,000 1,464,000 5 4.41 4 3 -86,532 -86,532 -86,532 -86,532 2 2.66 -692,252 0.77 1 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5 Copyright © 2011, Oracle. All rights reserved. 16
  17. 17. UK Oil and Gas Company Consolidating and Virtualising Legacy SPARC Server Estate 163 ‘fresh’ legacy SPARC servers + 17 T3-2 new servers 22 M4000 new servers 687 legacy SPARC serversAssumptions we used:• Applications can co-exist on a single virtualised platform• Most of application are multithreading aware• 5 man days to migrate one server Copyright © 2011, Oracle. All rights reserved. 17
  18. 18. UK Oil and Gas CompanyConsolidating and Virtualising Legacy SPARC Server Estate ~£11M Savings Delta Costs Delta Copyright © 2011, Oracle. All rights reserved. 18
  19. 19. UK Oil and Gas CompanyConsolidating and Virtualising Legacy SPARC Server Estate 5 Year Perspective: NPV: £7.7M ROI: 230% 3 Year Perspective: NPV: £3.8M ROI: 130% Payback Period: 14 months Copyright © 2011, Oracle. All rights reserved. 19
  20. 20. UK Financial Institution Consolidating and Virtualising Legacy SPARC Server Estate 7 M5000 new servers 183 legacy SPARC serversAssumptions we used:• Applications can co-exist on a single virtualised platform• Most of application are multithreading aware• 3 man days to migrate one server Copyright © 2011, Oracle. All rights reserved. 20
  21. 21. UK Financial InstitutionConsolidating and Virtualising Legacy SPARC Server Estate ~£2.8M Savings Delta Costs Delta Copyright © 2011, Oracle. All rights reserved. 21
  22. 22. UK Financial InstitutionConsolidating and Virtualising Legacy SPARC Server Estate 5 Year Perspective: NPV: £4.2M ROI: 210% Payback Period: 17 months Copyright © 2011, Oracle. All rights reserved. 22
  23. 23. UK Broadcasting Company Consolidating and Virtualising Legacy SPARC Server Estate 43 T3-1 new servers 428 legacy SPARC serversAssumptions we used:• Applications can co-exist on a single virtualised platform• Most of application are multithreading aware• 8 man days to migrate one server Copyright © 2011, Oracle. All rights reserved. 23
  24. 24. UK Broadcasting CompanyConsolidating and Virtualising Legacy SPARC Server Estate ~£6.3M Savings Delta Costs Delta Copyright © 2011, Oracle. All rights reserved. 24
  25. 25. Broadcasting CompanyConsolidating and Virtualising Legacy SPARC Server Estate 5 Year Perspective: NPV: £4.2M ROI: 210% 3 Year Perspective: NPV: £2M ROI: 110% Payback Period: 17 months Copyright © 2011, Oracle. All rights reserved. 25
  26. 26. Investment Bank Reduces Cost of Operations by 66% Migration of Key Trading System to Exadata Platform Demand Vs. Capacity Forecast Key IT Challenges M8000 upgrade? • Controlling the cost per trade as margins Faster storage? More storage? reduce and volumes grow • Providing predictable service as Too manymoving parts? What performance limits are approached next? • Controlling operational risk as the ‘headroom’ reduces • Preventing reputational risk and financial penalties from breaching regulatory SLAs • Avoiding non-compliance issues from ageing hardware and software • Resolving service incidents promptly as infrastructure complexity increases • Being agile to business needs Copyright © 2011, Oracle. All rights reserved. 26
  27. 27. Investment Bank Reduces Cost of Operations by 66% Migration of Key Trading System to Exadata Platform €25 Business Case Highlights • By 2013 the total cost to operate trading €20 infrastructure is forecast be €84M • Exadata can reduce these costs to €27M €15 • A saving of €56M (66%)Millions • Circa €16M/year recurring savings €10 • Driven by decommissions • But reduced by cost of coexistence - €5 forecast at €28M over 2.5 years • Does not include project transition costs €0 2010 2011 2012 2013 • Other benefits not yet quantified Cost of Growing Current Infrastructure Cost of Exadata Cost of Coexistence Notes: Assumption The ‘Costs of Growing Current Infrastructure’ comprises: depreciation charges; hosting & support; storage and hardware • Hosting and deprecation savings can be upgrade forecasts claimed shortly after migration of each The ‘Cost of Exadata’ comprises: depreciation charges, hosting & support and training database The ‘Cost of Coexistence’ comprises legacy costs (hosting, depreciation, storage) and hardware and storage costs (for migration) Copyright © 2011, Oracle. All rights reserved. 27
  28. 28. Contents• Case for Change• “Art of The Possible”• TCO / ROI Process Review• TCO Model – A Little Look Under The Covers• Next Steps Copyright © 2011, Oracle. All rights reserved. 28
  29. 29. I. ‘As Is’ TCO Work Includes Qualitative Descriptionof DC Estate; It Clarifies Growth Pattern and Scope. • Database Server Server • Application Server • Storage Software Storage • Storage Devices‘As Is’ TCO for 5 years: £23M • Storage Networks • Database Software Software • Application Server Software • 3rd Party Software • Network Environmental • Floor Space • Energy • Admin Resources Labour • Engineering • Provisioning • Implementation Services • Migration • Consulting/ Training Copyright © 2011, Oracle. All rights reserved. 29
  30. 30. II. Future Scenarios Are Modeled Based On ‘As Is’TCO Data. Multiple Future Scenarios Are Possible. ‘Do Nothing’ TCO for 5 years: £27M‘As Is’ TCO for 5 years: £23M ‘To Be’ TCO for 5 years: £11M Copyright © 2011, Oracle. All rights reserved. 30
  31. 31. III. Scenarios Are Compared on ‘Apples-With-Apples’ Basis; Correct Sizing Is Important. TCO Delta for 5 years ‘Do Nothing’ TCO for 5 years: £27M‘As Is’ TCO for 5 years: £23M ‘Do Nothing’ ‘To Be’ TCO TCO ROI for 5 years ‘To Be’ TCO for 5 years: £11M Copyright © 2011, Oracle. All rights reserved. 31
  32. 32. Benefits Breakdown We Usually Consider Model Works With Both ‘Hard’ And ‘Soft’ Benefits Cheaper Better Faster New Stretch Benefits Benefits Enabling New Cost Components of Hard Benefits Attributed to Achievable with Improved Initiatives with Improved Infrastructure - TCO Improved Infrastructure Infrastructure Infrastructure 1 2 3 4• Server • Storage Utilisation • Admin Productivity • New Services Time to• Storage • Server Utilisation • SLA Attainment Market• Network • License & Maintenance • Process and Application • New business• Floor Space Costs Performance enablement and• Labour/Management Cost • Server Integration Cost • Availability adapting to rapidly• Services • Network Throughput / IO • Automation of Processes changing business • QA and Testing Effectiveness models • Trouble Tickets • Access to predictive • Implementation Speed of analytics and scenario Changes modelling / advanced • 3 rd Party Development Cost regulatory intelligence • Linear Scalability capabilities • Reporting Benefits considered in scope • Security Benefits to be reviewed for alignment with • Audits application work stream business case Source: Oracle Analysis Copyright © 2011, Oracle. All rights reserved. 32
  33. 33. Benefits Breakdown We Usually Consider Model Works With Both ‘Hard’ And ‘Soft’ Benefits Cheaper Better Faster New Stretch Benefits Benefits Enabling New Cost Components of Hard Benefits Attributed to Achievable with Improved Initiatives with Improved Infrastructure - TCO Improved Infrastructure Infrastructure Infrastructure 1 2 3 4• Server • Storage Utilisation • Admin Productivity • New Services Time to• Storage • Server Utilisation • SLA Attainment Market• Network • License & Maintenance • Process and Application • New business• Floor Space Costs Performance enablement and• Labour/Management Cost • Server Integration Cost • Availability adapting to rapidly• Services • Network Throughput / IO • Automation of Processes changing business • QA and Testing Effectiveness models Classical Consolidation Benefits • Trouble Tickets • Access to predictive • Implementation Speed of analytics and scenario Changes modelling / advanced Hard Benefits • 3 rd Party Development Cost regulatory intelligence Quantify cost reduction ‘within IT’ • Linear Scalability capabilities • Reporting Benefits considered in scope • Security Benefits to be reviewed for alignment with • Audits Soft Benefits Quantify revenue stream of IT as business enabler application work stream business case Source: Oracle Analysis Copyright © 2011, Oracle. All rights reserved. 33
  34. 34. TCO Models Can Be Very Scientific …Part 1: Hardware and SoftwareTCO Component Elements Result • Net Purchase Price • Annual Maintenance Total Database Servers CostDatabase Server • Server Renewal Cycle over 5 Years • Average Age of Servers • Net Purchase Price • Annual Maintenance Total Application Servers CostApplication Server • Server Renewal Cycle over 5 Years • Average Age of Servers • Cost per GB/ TB Total Storage ChargebackStorage (Pooled) • Annual Storage Growth Rate over 5 Years • Net Purchase Price • SAN Switch Net Purchase Price Total Storage Devices CostStorage (Device) • Annual Maintenance over 5 Years • Storage Renewal Cycle • Average Age of Storage Devices • Installation/ Implementation Services Total Database Software CostDatabase Software • Net Software Purchase Price over 5 Years • Annual Maintenance • Installation/ Implementation Services Total Application Software CostApplication Server Software • Net Software Purchase Price over 5 Years • Annual Maintenance • Installation/ Implementation Services Total Storage Software CostStorage Software • Net Software Purchase Price over 5 Years • Annual Maintenance Copyright © 2011, Oracle. All rights reserved. 34
  35. 35. ... With a Lot Of Components and Variables ... Part 2: Environmental, Labour & ServicesTCO Component Elements Result • Cost of Floor Space per Square Meter • Footprint of Database Server Rack Total Floor Space CostFloor Space • Footprint of Application Server Rack over 5 Years • Footprint of Storage Rack • # of Database/ Application Server/ Storage Racks • Cost of Electrical Energy per kWh • Expected Hours of Operation per Year • Cooling and UPS Consumption Ratio Total Energy CostEnergy Cost • Power Rating of Database Server over 5 Years / Application Server/ Storage Device (in kW) • Amount of Database/ Application Servers/ Storage Devices • Cost per NIC Total Network CostNetwork • Cost per HBA over 5 Years • Cost per GB • Fully Loaded Annual Cost per Employee • # of DBA Support Resources • # of Storage Management Resources Total Labour CostLabour • # of Networking Support Resources over 5 Years • # of Applications DBA • # of Application Developers • Implementation Services • Migration Services Total Services CostServices • Consulting Expenses over 5 Years • Vendor Managed Services • Training Expenses Copyright © 2011, Oracle. All rights reserved. 35
  36. 36. … But Lion’s Portion of TCO is People + SW + HW Model Your HW, SW, People, Energy and Floor Space Costs First Typical Large Data Center Costs Breakdown Networking 10% People Energy and Facilities 29% 12% Qualify Out Overhead 2% your consolidation project if it is not about costs of:Disaster Recovery • Hardware Software 7% • • People Servers • Energy 11% • Floor Space Software 22% Storage … or any Soft Benefits … 7%Source: Data Center Infrastructure and Energy Management — No Longer an Option, Gartner 2010 Copyright © 2011, Oracle. All rights reserved. 36
  37. 37. Contents• Case for Change• “Art of The Possible”• TCO / ROI Process Review• TCO Model – A Little Look Under The Covers• Next Steps Copyright © 2011, Oracle. All rights reserved. 37
  38. 38. What’s In The Little Table? ‘As Is’ TCO for 5 years: £23M Copyright © 2011, Oracle. All rights reserved. 38
  39. 39. TCO Model – A Little Look Under The CoversI. Hardware Costs – Database And Application Servers Copyright © 2011, Oracle. All rights reserved. 39
  40. 40. TCO Model – A Little Look Under The CoversI. Hardware Costs – Storage Copyright © 2011, Oracle. All rights reserved. 40
  41. 41. TCO Model – A Little Look Under The CoversII. Software Costs – Database and Apps Server and Tools Copyright © 2011, Oracle. All rights reserved. 41
  42. 42. TCO Model – A Little Look Under The CoversII. Software Costs – Storage Software Copyright © 2011, Oracle. All rights reserved. 42
  43. 43. TCO Model – A Little Look Under The CoversIII. Environmental Costs – Floor Space Copyright © 2011, Oracle. All rights reserved. 43
  44. 44. TCO Model – A Little Look Under The CoversIII. Environmental Costs – Energy Copyright © 2011, Oracle. All rights reserved. 44
  45. 45. TCO Model – A Little Look Under The CoversIV. Labour Costs Copyright © 2011, Oracle. All rights reserved. 45
  46. 46. TCO Model – A Little Look Under The CoversV. Appendix. TCO Summary Copyright © 2011, Oracle. All rights reserved. 46
  47. 47. TCO Model – A Little Look Under The CoversProcess Is Fully Transparent and All Costs Can Be ‘Defended’ TCO Delta for 5 years ‘Do Nothing’ TCO for 5 years: £27M‘As Is’ TCO for 5 years: £23M ‘Do Nothing’ ‘To Be’ TCO TCO ROI for 5 years ‘To Be’ TCO for 5 years: £11M Copyright © 2011, Oracle. All rights reserved. 47
  48. 48. Contents• Case for Change• “Art of The Possible”• TCO / ROI Process Review• TCO Model – A Little Look Under The Covers• Next Steps Copyright © 2011, Oracle. All rights reserved. 48
  49. 49. You Can Engage With Oracle Free of ChargeWe’ll do Discovery and Business Case to Cut Your Costs Yes, It Is “Free Of Charge”, but: • It is to help you with real needs • It is up to 4 weeks of work (both Your Team and Oracle) • CxO sponsorship is required Copyright © 2011, Oracle. All rights reserved. 49
  50. 50. Next Steps• Find senior sponsor for Data Center Costs Reduction project• Find potential use cases for Cost Reduction• Contact Oracle Account Manager • Oracle UK Customer Solutions Team • Oracle UK Data Center Insight • Oracle UK Industry Sales Consulting• For inquiries about this presentation or TCO/ROI framework: sergey.danilov@oracle.com, mobile: 0 77 99 37 12 13 Copyright © 2011, Oracle. All rights reserved. 50
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