IBM - Craig Bender

© 2016 IBM Corporation
ITEconomics
1
IBM Competitive Project Office
Proving the Value of IBM Technology
IBM Eagle Team – IT Economics Practice
IT.Economics@us.ibm.com
No-Charge Studies to Help Your Business
Craig Bender, IBM Director
IBM EagleTeam - IT Economics Practice
csbender@us.ibm.com

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• IT Economics is the financial assessment of IT operations
• IT expenses by platform
• IT expenses by lines of business
• CAPEX
• OPEX
• Total annual IT spend
• Different methodologies are used to calculate IT spend
• Do they calculate your true IT spend?
IT Economics… What is it?

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IT Economics methodology
Current Environment
IT Costs (OPEX)
- Hardware
- Software
- Labor
- Networking
- Facilities
- Storage
Alternative 1
IT Costs (OPEX)
- Hardware
- Software
- Labor
- Networking
- Facilities
- Storage
Alternative 2
IT Costs (OPEX)
- Hardware
- Software
- Labor
- Networking
- Facilities
- Storage
TODAY FUTURE CHOICES
Examine and compare alternatives to determine the most cost-effective solution

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Understand the Complete picture
Components
Environments
Production/Online
Batch/Failover
Development Test QA DR
Hardware
Software
People
Network
Storage
Facilities
Time
Upgrades
Migration
Growth
Parallel Costs
Net Present Value
Qualities of Service such as availability,
reliability, security and scalability
Learn more about true technology costs in IBM Systems Magazine article, “True Economics”
Four Dimensions of TCO

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Source: Worldwide IT costs analysis made by 2 primary Independent Analyst Companies
z Systems Provides
Lowest Cost for Core Business Workloads
Mainframes cost on average 35%less to produce goods

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1. Easy Migration
– Native Linux Applications
– Portable Middleware (Oracle, DB2, WebSphere, Weblogic)
2. Low Average (Not Peak) CPU Utilization on Intel
– Development and Test Machines
– I/O Intensive Applications (Database)
– Mixed workload environment (WebSphere and Weblogic)
– Mail Servers (Domino)
3. Software that costs per core
– 50 : 1 core consolidation ratio means 50 times fewer software licenses
What Workloads Consolidate Well to Linux
on z Systems?

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Why does consolidation to Linux on z Systems
reduce cores?
 Better workload management
 Better total utilization due to reduced peak to average ratio
 Reduced communication (fewer cycles for TCP/IP)
 System Assist Processors (SAP) for I/O
 Better caching infrastructure
 Better availability characteristics so additional cores not required
 Capacity Backup Units (CBU) for Disaster Recovery
 Fewer Virtual Servers required (scale up instead of scale out)
 All resources shared (cores, memory, I/O)

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Results: Oracle Database Migration to System z
Distributed Servers System z Server
166 Cores 2 Cores
Save $200K/year

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Customer Example: U.S. Government
Case 2
(1) System z
(7) Cores running Linux
Case 1
(24) Distributed Servers
(168) Physical Cores
Oracle DB
WebLogic
WebSphere

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5 Year TCO: System z vs. Distributed
1/2 Cost
Network
Space/Energy
People
Software
Hardware
$2.6 Million $5.4 Million

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z Systems Virtualization Enables Mixing Of High And Low
Priority Workloads Without Penalty
z/VM 10VM 32 Core CPU Usage With Physical
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57
Time (mins)
%CPUUsage
Donor Workload
Priority Workload
z Systems
• Perfect workload management
• Consolidate workloads of different
priorities on the same platform
• Full use of available processing resource
(high utilization)
• Imperfect workload management
• Forces workloads to be segregated on
different servers
• More servers are required (low utilization)
Too much
resource given
to Low Priority
workload
High Priority
workload gets
less resource
than needed
Leading Intel Hypervisor

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European Public Sector Company reduces Oracle SW
costs with zIFLs
Client Situation
A large Public Sector Company decided to standardize its IT infrastructure to Linux.
It began evaluating each workload for placement on the lowest cost HW platform.
Its Oracle DBMS environment running on x86 was ready for a server refresh, and
requested help to compare the cost of running it on Intel versus z systems.
Benefit
• Savings of almost $2Mover three years resulting from one IFL to about 16
distributed cores ratio for Oracle and other core-licensed software.
• Deployment on z Systems simplifies the company’s DR solution.
Solution
Consolidate Oracle and core licensed
workloads on z IFLs for lowest TCO
Analysis found workload consolidation of 2
physical Intel Enterprise servers with 142
cores to 2 zEC12 with 6 IFLs + 3 CBUs on
amounted to 60% the cost of staying on the
distributed Intel platform.
SuperDome Servers
92 cores +
50 cores DR
zEC12 Enterprise
Servers 6 IFLs +
3 CBUs
or
source: IT.Economics@us.iibm.com

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Egyptian Bank reduces Oracle licensing costs with zIFLs
Client Situation
A large Egyptian bank wanted to reduce Oracle licensing costs and sought a comparison of Oracle on Intel servers and Linux on z Systems.
Benefit
Savings of $11.7Mover five years resulting from one IFL to 22 distributed core
ratio for Oracle and other software licensing. Higher than industry standard costs
for floor space was another significant factor.
.
Solution
Consolidate Oracle workloads on z
Systems IFLs.
Analysis found workload consolidation of
31 physical x86 servers with 201 cores to
the z196 or zEC12 IFLs amounted to less
than half the cost of staying on the
distributed x86 platform.
5 Year TCO: Distributed vs. Mainframe
z196
Enterprise
Server
9 IFLs
zEC12
Enterprise
Server
7 IFLs
or
source: IT.Economics@us.ibm.com

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$37M (3yr TCO)
$18.3M (3yr TCO)
$9.4M(3yr TCO)
Public
Cloud
Private
Cloud
(zEC12)
Private
Cloud
(x86)
398
reserved instances
48
IFLs
676
x86 cores
49% and 75%
less cost
398 workloads
87 medium
workloads
39 heavy I/O
workloads
272 very light
workloads
Private cloud on z Systems yields the lowest costs
Source: Server configurations are based on equivalence ratios derived from IBM internal studies.
Prices are in US currency and will vary by country. Public cloud case includes costs of hardware
(instances, data in/out, storage, support, free tier/reserved tier discounts), software (middleware)
and labor. zEnterprise and x86 cases include costs of hardware (system, storage, virtualization, OS),
software (cloud management, middleware), power, floor space and labor.
Private cloud on z yields lowest TCO compared to public cloud and private x86 cloud
IT Economics 14

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ETL Drives Costs for Business Analytics
Scenario assumes all machines are 4 core, z Systems runs at 85% utilization and distributed servers run at 60%
utilization, transfer will burn 557 MIPS and use 21 distributed cores per day
Source: ETL costs are derived from IBM internal studies
vs.
ETL costs over $2M per year
Colocation of application and data on z Systems avoids significant ETL costs

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z Systems mobile solution provides the lowest TCA over 3 years
$11.5M (3 yr. TCA)
Prod + Dev/QA + DR
Mobile Workload Pricing
$18.7M (3 yr. TCA)
Prod + Dev/QA + DR
CICS
DB2
z/OS
Mobile read-only workload driving minimum
throughput of 6,300 transaction per
second and response time of 12ms
Mobile Workloads on z Systems
61%
higher cost
Worklight
WAS ND
DB2
z/VM
CICS
DB2
z/OS
zEC12-704 + 5 IFLs
zEC12-704x86 1/8th Rack
(30 cores pro-rated)
Oracle*
WLS
Coherence
Oracle VM
 500 concurrent connections
 70% do 1 read/session;
25% do 4 reads/session;
5% do 20 reads/session with 100ms think time
 1 second cache invalidation (WXS scenario)
Mobile
Users
* Oracle sizing projected from WXS Caching Test
Oracle*
Database
Oracle Linux
x86 1/8th Rack
(24 cores)
Source: Mobile workloads comparisons are derived from IBM internal studies

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IBM Eagle Team - IT Economics Practice
 Part of the IBM Competitive Project Office (CPO)
 Specialized in examining economic differences between solutions in client environments
 Focused on identifying areas for efficiencies and cost reductions
 Provide no-charge studies
Who we are
Benefits of engaging the Eagle Team
 Worldwide experience from successfully helping hundreds of clients since 2007
… most likely we have evaluated a similar scenario before
 Leverage research and benchmarks from the various CPO teams
 We use client figures (not our own)
… through a transparent model
… with agreed-to assumptions
… and iterate as required
 Provide a business case from which a client can make a financially based IT decision

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Eagle Presence World Wide
Christopher T. von Koschembahr
IBM Eagle Team
Americas Practice Leader
New York, NY, USA
Americas
J C Yao
IBM Eagle Team
AP Practice Leader
Singapore
Alfredo Micarelli
IBM Eagle Team
EMEA Practice Leader
Rome, Italy
EMEA AP
Craig Bender, Director
Worldwide Practice Leader
Somers, NY, USA
World wide and local teams expert in Eagle methodology and on-site client consulting
Eagle consultants staffed in 15 countries across all GEOs
John Gustavson, CTO
Worldwide Practice Leader
Detroit, MI, USA

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Use an IT Economics study to identify savings
How We Can Help
Are you…
Deploying workloads on Linux x86?
Using AWS EC2 or Azure VMs?
Evaluating the best platform for Big Data?
Running out of datacenter space?
Using more than three platforms?
Looking to reduce IT spend?
Do you…
Want to do more with cloud?
Need to simplify your IT environment?
Want to grow your business but need to decide
where to host the applications?
Have more than 50 x86, HP-UX or Sun servers
running Oracle or Weblogic?
Want to investigate cognitive solutions?
These are common scenarios where clients have benefited from an IT Economics study.
Request a study at the end of today’s session by contacting
Craig Bender, csbender@us.ibm.com
Albert Kerezeon, albert.kerezeon@be.ibm.com
Or send an email to IT.Economics@us.ibm.com

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IT Economics Studies
Use a business case to make a technically and financially based IT decision
Workload Placement Assessment
Consolidate, offload, and place new workloads on alternative platforms
Exploit and compare platform attributes to optimize workload performance and costs
IT Best Practice Benchmarking
Compare actual IT environment with best practices in the IT industry
Improve forecast and actual spend
Chargeback Analysis
Align chargeback policies to actual IT costs
Identify and overcome chargeback policies that drive adverse IT decisions
Cloud Assessment
Perform a Health Check to find the right private, public or hybrid cloud solution
Examine workload size and activity, SLA and provisioning requirements, and instance costs
Analytics Assessment
Determine the most cost-effective infrastructure for analytics solutions
Exploit platform attributes and efficient storage solutions for Analytics and Big Data
Mobile Assessment
Mitigate high-volume, low-value mobile transaction costs
Evaluate the effects of throughput, response time and other KPIs in mobile topologies
Available at no-charge to IBM clients and Business Partners
www.ibm.com/iteconomics
https://www.ibm.com/partnerworld/iteconomics
Business Value Assessment (BVA)
Understand solution attributes and how business requirements are mapped
Quantify financial benefits and compare to alternatives to determine the most compelling case

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Five Steps for an IT Economics Study
An IT Economics study can be completed in a few weeks with minimal effort on your part. Studies
involve these five steps:
www.ibm.com/iteconomics
https://www.ibm.com/partnerworld/iteconomics
• Ask your IBM
Client
Representative,
business partner
or contact the
IBM Eagle Team
at IT.Economics@
us.ibm.com.
• You will be
contacted by a
senior Eagle
Consultant in
your region.
• An IBM Eagle
consultant
coordinates a date
to hold an on-site
workshop with you.
• This is typically a
two hour meeting.
• Your IBM Eagle
consultant will
explain the study’s
methodologies,
capture your
objectives for the
study and gather
information about
your IT
environment.
• The consultant
share best and
worst practices.
• Depending on the
scope of the study,
your IBM Eagle
consultant may
request additional
data after the
workshop.
• Analysis and report
preparation
(performed off-site)
are usually
complete in three
to four weeks.
• Your IBM Eagle
consultant will meet
with you to present
findings and provide
recommendations.
• The consultant will
answer questions and
provide you with a final
report with detailed
analysis, an executive
summary, and a
business case
1. Request a
Study
2. Decide a
Workshop Date
3. On-site
Workshop
4. Data
Analysis
5. On-site Study
Presentation

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IT Economics Study Outcome
Each study is unique to your IT environment. The final report and on-site read out will provide you with the following:
 Executive Summary
– Objectives and scope of study
– Assumptions and other considerations used in study
– Scenarios analyzed and comparisons of alternatives
– Return on Investment for each scenario (annual spend, TCO over multiple years)
– Graphical representations of TCO costs for each scenario
– Conclusions and recommendations
 Detailed Analysis
– Data and pricing for study input
• IBM and third party HW, SW, maintenance, labor, facilities costs, etc.
• One time and recurring costs for upgrades, migration, parallel operating costs
• Evaluation of qualities of services
 Findings You Can Implement
− Reduced IT spend
− Simplification of operations
− Increased efficiencies

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Thank you ……. Questions?

IBM - Craig Bender

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