This document summarizes an IDC white paper on measuring the business impact and ROI of using JBoss Operations Network (JBoss ON) for managing JBoss Enterprise Middleware environments. The study found that organizations using JBoss ON achieved an average 634% ROI over 3 years, with an average payback period of 5.3 months. Key benefits included more than doubling the number of Linux servers managed per administrator, from 38 to 84 on average, reducing downtime, and improving IT staff efficiency.

1. WHITE P APER
JBoss Operations Network: Measuring Business Impact
and ROI
Sponsored by: Red Hat
Tim Grieser Randy Perry
July 2010
INTRODUCTION
Linux-based applications have become essential to many organizations for delivering
and supporting ecommerce, Web, and mission-critical business applications and
databases. As Linux grows in importance and value to the business, IT must deliver
high service quality for availability, security, and performance in order to support
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA P.508.872.8200 F.508.935.4015 www.idc.com
business success. Red Hat Inc. distributes and supports the Red Hat Enterprise Linux
operating environment and JBoss Enterprise Middleware for development,
deployment, and production operation of Java and Web-based applications.
Red Hat provides the JBoss Operations Network (JBoss ON) management platform
for centralized systems management (server-agent) of JBoss Enterprise Middleware.
JBoss ON provides management functions for the JBoss SOA Platform, the JBoss
Enterprise Application Platform, the JBoss Enterprise Web Server, and other JBoss
components. JBoss ON management functions include discovery and inventory,
configuration management, application deployment, availability management,
performance management, and content management. This ROI study focuses on the
quantitative benefits gained from using the JBoss ON management platform.
EXECUTIVE SUMMARY
IDC conducted a series of in-depth interviews with staff members of IT organizations
that have deployed JBoss Operations Network to manage their JBoss Enterprise
Middleware environments. A structured set of questions was used to assess and
quantify the internal and external costs of performing certain administrative,
operational, and support functions and how costs changed as a result of
implementing JBoss Operations Network. Table 1 shows the key results of this study.
T ABLE 1
Three-Year ROI Analysis
Category Value
Benefit $347,878
Investment $47,378
Net present value (NPV) $300,500
ROI = NPV/Investment 634%
Payback = Investment/NPV 5.32 months
Source: IDC, 2010

2. The study was based on standard IDC ROI methodology used to calculate average
cost savings resulting from higher availability, including changes in downtime,
improved IT efficiency, and increased user productivity resulting from using JBoss
Operations Network. Data from the survey was used as the basis for the IDC ROI
analysis. IDC's ROI analysis methodology is described in the Appendix.
KEY FINDINGS IDC's JBoss ON ROI
analysis yielded an
average 634% ROI —
Based on data from interviews with IT managers from organizations using JBoss more than six times
Operations Network, IDC's JBoss ON ROI analysis yielded an average 634% ROI — the initial investment
— and an average
more than six times the initial investment — and an average payback period for the payback period for the
initial investment of a short 5.3 months for the IT organizations in this study, as shown initial investment of a
short 5.3 months.
in Table 1.
A key metric was the improvement in the number of JBoss Middleware environments The number of Linux
servers running JBoss
managed per system administrator. The number of Linux servers running JBoss Middleware managed per
Middleware managed per system administrator more than doubled, increasing from system administrator
more than doubled,
an average of 38 Linux servers per administrator before deploying JBoss ON to 84 increasing from an
Linux servers per administrator after deploying JBoss ON. The IT organizations average of 38 Linux
reported a substantial savings in staff hours expended on managing JBoss Enterprise servers per administrator
before JBoss ON to 84
Middleware by using JBoss Operations Network, resulting in annual IT productivity Linux servers per
increases. IT managers also claimed improved end-user productivity, while downtime administrator after
deploying JBoss ON.
hours per month were reduced. Participants also identified other annual savings
through improvements in IT efficiency, absolute software/hardware savings, and other
indirect cost savings. These results are illustrated in Figure 1 in terms of average
annual savings per 100 users.
FIGURE 1
Average Annual Benefits of JBoss Operations Network per 100
Users
Source: IDC, 2010
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3. Deployment of JBoss ON achieved a very impressive average annual benefit of
$147,212 per 100 JBoss users. Revenue increase accounted for 40.5% of this benefit,
while improvements in IT staff efficiency constituted 23.7% of the total. Other major
benefits came from cost reduction (19.2%) and improved user productivity (16.6%).
STUDY DEMOGRAPHICS
To assess the benefits of Red Hat Systems Management, IDC conducted in-depth
telephone interviews with staff members from IT organizations located in companies
headquartered in North America; South America; Europe, the Middle East, and Africa
(EMEA); and Asia/Pacific that have deployed JBoss ON. The industries of the
companies supported by the IT organizations include financial services, media, and
business services. Table 2 shows the survey demographic averages across the IT
organizations.
T ABLE 2
JBoss ON Survey Demographics
Demographic Average
Employees 10,545
IT staff 710
IT operations management staff before JBoss ON 5
IT operations management staff after JBoss ON 4
Servers managed per system administrator before JBoss ON 38
Servers managed per system administrator after JBoss ON 84
Regions Asia/Pacific, EMEA, North America, South America
Source: IDC, 2010
RE ASONS FOR IMPLEMENTING JBOSS
OPERATIONS NETWORK
Survey respondents were asked about the reasons their organizations decided to
implement JBoss Operations Network for managing JBoss Enterprise Middleware. As
shown in Figure 2, all of the respondents cited "reduce costs" as a major reason for
implementing JBoss Operations Network. Two-thirds of the respondents cited
"increase efficiency" and "integrate processes," while one-third pointed to
"competitive advantage" as a factor influencing their organization's decision.
©2010 IDC #224332 3

4. FIGURE 2
Reasons for Implementing JBoss ON
Source: IDC, 2010
BENEFITS OF JBOSS OPERATIONS
NETWORK
Cost Reduction
Companies in this study were able to reduce costs with JBoss Operations Network by
moving away from other more expensive or less efficient tools by avoiding increased
staffing or new hires and by reducing costs for new hardware. One customer said, "In
terms of JBoss Operations Network … the centralized administration tool it is
displacing would have a licensing fee close to $200,000 per year, and we are
spending about $16,000 in licensing fees for JBoss ON."
JBoss Operations Network helps IT organizations manage critical hardware
resources. A senior middleware architect commented, "With JBoss ON we can do a
better job of resource planning for our hardware; we can use the information from
JBoss ON to determine if we need more hardware, memory, etc."
JBoss Operations Network enables customers to contain costs by leveraging IT staff. "The IT budget going
toward keeping the
As one senior engineer of middleware services said, "The IT budget going toward lights on definitely
keeping the lights on definitely changed after implementing JBoss ON … without it we changed after
implementing JBoss
would need an extra 3–4 people per department, or 12 across our entire IT group, to do
ON … without it we
the same work." Another example of leveraging IT staff with JBoss ON came from a would need an extra
senior manager of IT operations. "Two administrators' time was mostly spent managing 3–4 people per
department, or 12
the 85 servers, and now they can manage our entire infrastructure of 255 servers." across our entire IT
group, to do the same
work."
On average, the companies surveyed in this study were able to reduce annual costs
by $28,311 per 100 users with JBoss ON.
4 #224332 ©2010 IDC

5. IT Staff Efficiency
IT staff efficiency is based on the amount of staff time needed to perform specific
management tasks and the ability to achieve higher scalability in IT operations. One
JBoss customer commented, "In the past we had to get into each console to do
administration; now we have one central console that we use to manage all 76, so it's
a huge time savings."
Scalability achieved through the use of management software helps IT operations to
keep up with rapidly growing infrastructure demands. For example, one respondent
observed, "While the FTEs have remained the same [just me], I am now able to do
the work that would have required 3–4 people [to manage our current environment]."
JBoss ON customers are seeing significant efficiency benefits related to help desk
operations. According to one user, "Before JBoss ON, our T1/T2 help desk was
fielding 50 calls a day; now it's down to 10 calls per day. For T3 calls ... it now takes
me about a half hour on average, and before JBoss ON, it used to take me about 1
hour on average per call."
Another comment related to staff efficiency in a wider set of operations: "We also get
greater efficiencies in our IT staff across our entire operation. I would guess of the 20
people in our IT organization who touch JBoss ON [besides myself], they are maybe
10% more efficient overall. Those 20 people consist of system administrators and DBAs."
User Productivity
User productivity is influenced by such factors as slowdowns, downtime, and loss of
application availability. JBoss ON helps IT operations prevent incidents and respond
more quickly to analyze and repair problems when they do occur. One key metric is
the mean time to repair (MTTR). In terms of the study respondents, the average
MTTR was reduced from 1 hour before JBoss ON to 15 minutes after JBoss ON —
an impressive 75% reduction.
Downtime has a direct impact on user productivity: Fewer hours "in the dark" means
users have more time to complete tasks. One user noted that with JBoss ON, "we
have seen reduced downtime, as well as rapid relief in terms of things like patches …
for example, if we have a problem or need a particular update to our environment, we
can go to Red Hat and they will do a one-off patch." Another user commented,
"Before its implementation, we had probably 3 downtime incidents per month, and
each incident probably averaged 2–3 hours of downtime. We even had some times
we were down a whole day. Now with JBoss ON, in the past year, we had only one
issue with downtime, and it lasted only an hour." On average, downtime hours per
year were reduced by 83% with JBoss ON for the study respondents.
User productivity is impacted by incidents requiring help desk support. JBoss ON
customers have been able to reduce the number of support calls to the help desk and
also shorten the amount of time spent on each support call. The average number of
support calls per week was reduced by 73%, from 268.8 to 73.2, while the average
amount of time spent per support call was reduced by 66%, from 25.8 minutes to 8.3
minutes. On average, in this study, customers experienced an equivalent of $24,392
per 100 users in annual user productivity increase.
©2010 IDC #224332 5

6. Revenue Increase
Revenue increase is driven by such factors as reduction in downtime and limitations
in accessing key business applications. One respondent explained that before JBoss
ON, "our call center reps couldn't access their systems for long periods of the day,
and that gave us a lot of problems. If a customer called the insurance company with
an insurance proposal in hand, and we told them, 'We can't help you,' it would
definitely affect our business."
For the survey population as a whole, the average yearly revenue loss from downtime
was reduced from $5.7 million to $966,000 with the use of JBoss — an 83% improvement.
Benefit and Cash Flow
The annual benefit, investment, and cumulative cash flow over three years are shown in
Figure 3. Benefits tend to increase over time as the solution gains greater traction in the
organization. Investments are highest in the year JBoss Operations Network is
purchased. Once the initial cost is accounted for, investment in the following years
declines and levels off over time. Ongoing investment includes annual subscription fees,
standard hardware turnover, IT time required to maintain the solution, and staff training.
FIGURE 3
Benefit, Investment, and Cash Flow
Source: IDC, 2010
6 #224332 ©2010 IDC

7. Return on Investment
The three-year IDC ROI analysis on JBoss Operations Network is based on initial and
annual investments compared with the benefit over the three years. Based on the
data gathered from the customers in this study, this solution offers an ROI of 634%
and payback occurs at 5.3 months. Table 1 displays the ROI results (details on how
these figures are calculated are available in the Appendix).
NEED TO MANAGE OPEN SOURCE
MIDDLEW ARE
This ROI analysis is presented in the context of the growing need to manage open
source middleware. Linux has rapidly grown in importance as an operating
environment and is being used to deploy an increasing number of applications and
databases — often replacing higher-cost Unix systems. Many applications are
dependent on JBoss Enterprise Middleware for SOA, Web servers, and application
servers. With increasing business value, Linux-based applications must be managed
to achieve high-availability, security, and performance standards. Management
software is needed to ensure service quality and to support such functions as
provisioning, configuration management, and change and patch management.
MAN AGEMENT BENEFITS
Linux management software provides key benefits for managing Linux-based servers,
middleware, and applications. These benefits include the following:
Better service quality. Management software can improve availability and
performance with fewer slowdowns and reduced downtime. Downtime has direct
costs to the business that come from loss of business opportunity as well as
decreased employee and end-user productivity.
Leveraging of staff resources. Management software can help increase the
amount of staff time that can be used for productive work.
Automation. Management software can be used to automate routine or
repetitive tasks, such as server provisioning or applying patches.
Agility. Management software can facilitate and greatly reduce the time needed
to implement system and application changes.
Cost savings and improved ROI. Management software drives cost savings
including reduced hardware and software costs, reduced IT operational costs,
and reduced IT management costs. Benefits also come from increased end-user
productivity and enhanced availability of business applications.
©2010 IDC #224332 7

8. RED HAT LINUX MAN AGEMENT
Red Hat Inc. develops, distributes, and supports the Red Hat Enterprise Linux
operating environment, based on the open source Linux kernel, and JBoss Enterprise
Middleware, which includes the JBoss SOA Platform, the JBoss Enterprise
Application Platform, the JBoss Enterprise Web Server, and other middleware
components. One of the key requirements for Red Hat is to provide management
support for systems and applications deployed on Red Hat Enterprise Linux servers
and JBoss Enterprise Middleware.
Red Hat Network and JBoss Operations
Network
Red Hat Network (RHN) is a solution that provides system management services
specifically for Red Hat technologies and for the distributed software that makes up
the Red Hat Enterprise Linux operating environment, as well as for applications
deployed on Red Hat Enterprise Linux. JBoss Operations Network is a management
software platform for centralized systems management (server-agent) of JBoss
Enterprise Middleware. JBoss ON provides management functions for the JBoss SOA
Platform, the JBoss Enterprise Application Platform, the JBoss Enterprise Web
Server, and other JBoss components. JBoss ON management functions include
discovery and inventory, configuration management, application deployment,
availability management, performance management, and content management.
CHALLENGES AND OPPORTUNITIES
As shown by the results of this ROI study, management software for open source
middleware can provide a number of key benefits for IT organizations, including
increased IT efficiency, operational cost reductions, and service improvements such
as reduction in downtime. These factors contribute to making Linux an increasingly
viable platform for deploying enterprise-class applications and databases.
One challenge for Linux management is to extend functional capabilities to
encompass the changes occurring in infrastructure technology, such as the rapidly
spreading virtualized infrastructures in the x86 environments. Increasingly, Linux
systems management will need to address both the Linux virtual images and the
impacts of the virtual infrastructures in which the images are deployed.
Another area of high interest is managing Linux in the cloud. As cloud architectures
mature, IT organizations will want to manage Linux-based applications in a variety of
cloud configurations with emphasis on self-service capabilities, including provisioning,
patching, and security management. Ensuring service quality including performance
and availability will be an important management concern for Linux-based
applications deployed in the cloud.
8 #224332 ©2010 IDC

9. These technological advances pose opportunities for Linux management vendors to
develop new and extended functionality for system management software. Other
opportunities exist for increased integration of core Linux management capabilities
with major application platforms, commercial databases, and enterprise management
suites. The further development of Linux management software by companies such
as Red Hat can offer IT organizations the opportunity to achieve positive ROI benefits
in expanded areas of their operations.
SUMMARY AND CONCLUSION
This ROI study is based on data gathered from structured in-depth interviews with
representatives from IT organizations that are using JBoss Operations Network to
manage JBoss Enterprise Middleware. Based on this study, the IT organizations
experienced strong positive returns on their investments, yielding an average 634%
ROI over a three-year period — over six times the initial investment.
In today's economic climate, IT organizations are looking for ways to achieve cost
savings in the short term. Based on this study, the IT organizations achieved this goal by
realizing an average payback period for JBoss Operations Network of a short 5.3 months
— recovering their initial investments well within the first half-year of deployment.
Another key metric that demonstrates the positive effects of using JBoss Operations
Network is the impact on the number of Linux servers running JBoss Enterprise
Middleware that can be managed by a single system administrator. Before
deployment, the surveyed IT organizations averaged 38 Linux servers running JBoss
Enterprise Middleware per administrator. After successful deployment, the
organizations averaged 84 Linux servers running JBoss Enterprise Middleware per
administrator, more than doubling the administrators' server management capabilities.
In summary, the IT organizations that were interviewed for this study received positive
ROI results, with short payback periods, from deploying JBoss Operations Network to
manage their JBoss Enterprise Middleware environments.
©2010 IDC #224332 9

10. APPENDIX
IDC'S ROI Methodology
IDC's ROI methodology measures the efficiency of management software products
and processes and uses the findings to calculate ROI for the deployed management
software. The method does this in four steps:
1. Evaluates the internal and external costs of administering the systems, networks,
and applications before deploying the management software tools.
2. Ascertains the investment in the purchase, implementation, and deployment of the
management software tools. It is important to estimate not only the initial purchase
cost of software but also the required implementation, integration, and training
costs. To measure the total deployment investment required, IDC is careful to
include questions not only about the cost of purchasing and setup of the software
but also about the integration and the annual software maintenance fees.
3. Measures the cost savings and gains in productivity, availability, and efficiency
achieved using the management software tools. Portions of the interviews are
dedicated to the discovery of cost savings including both "hard" IT costs, such as
savings in software rental and maintenance fees, and "soft" costs, such as IT
staff productivity, IT management efficiency, and application availability.
IT staff productivity. To measure changes in IT productivity, IDC asks
about the use of staff time in such deployment and operational areas as
setting up servers, deploying and updating software, tracking hardware and
software assets, and dealing with user problems. Staff time for these tasks
before and after implementation is recorded, together with the fully burdened
(i.e., after fringe benefits and overhead) hourly staff salary rate.
IT management efficiency. IT management efficiency pertains to
efficiencies achieved in user administration and support by obtaining better
management scalability. Some questions asked relate to the ability to
centrally manage remote locations to achieve reductions in travel costs,
while others relate to the additional staff that would be required to support
expected growth in the user or server population, with and without the tools.
Application availability and user productivity. To measure the effects of
application availability, IDC concentrates on determining the effect on user
productivity and business revenue caused by downtime by asking questions
about systems, network, and application unavailability patterns before and
after implementation. The fully burdened hourly salary rates of the user base
are also required, and an estimate is sought of the loss of business that
would be associated with an hour of downtime.
4. Calculates the payback period and ROI for the deployed enterprise management
software. Based on the interview data, IDC calculates the average payback
period and rate of return based on the overall cost savings resulting from the
investments in JBoss Operations Network software. To normalize the data, IDC
presents the results in terms of per 100 users.
10 #224332 ©2010 IDC

11. ROI and Payback Period Calculation
Assumptions
IDC bases the payback period and ROI calculations on a number of assumptions,
which are summarized below:
Time values are multiplied by burdened salary (salary + 28% for benefits and
overhead) to quantify efficiency and manager productivity savings.
Downtime values are a product of the number of hours of downtime multiplied by
the number of users affected.
The impact of unplanned downtime is quantified in terms of impaired end-user
productivity and lost revenue.
Lost productivity is a product of downtime multiplied by burdened salary.
Lost revenue is a product of downtime multiplied by the average revenue
generated per hour.
The net present value (NPV) of the three-year savings is calculated by subtracting
the amount that would have been realized by investing the original sum in an
instrument yielding a 12% return to allow for the missed opportunity cost. This
accounts for both the assumed cost of money and the assumed rate of return.
Because every hour of downtime does not equate to a lost hour of productivity or
revenue generation, IDC attributes only a fraction of the result to savings. As part of
our assessment, we asked each company what fraction of downtime hours to use in
calculating productivity savings and the reduction in lost revenue. IDC then taxes the
revenue at that rate.
Further, because IT solutions require a deployment period, the full benefits of the
solution are not available during deployment. To capture this reality, IDC prorates the
benefits on a monthly basis and then subtracts the deployment time from the first-
year savings.
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Copyright 2010 IDC. Reproduction without written permission is completely forbidden.
©2010 IDC #224332 11