VALUE PROPOSITION FOR IBM P S DATABASE S M...

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May 2008 MANAGEMENT BRIEF V ALUE PROPOSITION FOR IBM POWER SYSTEMS AS DATABASE SERVER IN MIDSIZE COMPANIES Cost Comparisons with Windows Servers International Technology Group 4546 El Camino Real, Suite 230 Los Altos, California 94022-1069 Telephone: (650) 949-8410 Facsimile: (650) 949-8415 Email: [email protected] ITG

Transcript of VALUE PROPOSITION FOR IBM P S DATABASE S M...

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May 2008

MANAGEMENT BRIEF

VALUE PROPOSITION FOR IBM POWER SYSTEMS AS

DATABASE SERVER IN MIDSIZE COMPANIES

Cost Comparisons with Windows Servers

International Technology Group 4546 El Camino Real, Suite 230

Los Altos, California 94022-1069 Telephone: (650) 949-8410 Facsimile: (650) 949-8415 Email: [email protected]

ITG

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Copyright © 2008 by the International Technology Group. All rights reserved. Material, in whole or part, contained in this document may not be reproduced or distributed by any means or in any form, including original, without the prior written permission of the International Technology Group (ITG). Information has been obtained from sources assumed to be reliable and reflects conclusions at the time. This document was developed with International Business Machines Corporation (IBM) funding. Although the document may utilize publicly available material from various sources, including IBM, it does not necessarily reflect the positions of such sources on the issues addressed in this document. Material contained and conclusions presented in this document are subject to change without notice. All warranties as to the accuracy, completeness or adequacy of such material are disclaimed. There shall be no liability for errors, omissions or inadequacies in the material contained in this document or for interpretations thereof. Trademarks included in this document are the property of their respective owners.

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TABLE OF CONTENTS CHALLENGES AND SOLUTIONS 1

Challenges 1 Costs 1 Capabilities 3

Performance 3 Scalability 3 Availability 4 Virtualization 5 System and Workload Management 7 Personnel Productivity 7 Complexity Reduction 8

BUSINESS VIEW 9 Why Database Servers Matter 9 Data Growth 9 High Availability 11 Disaster Recovery 12 Security and Malware 13

POWER SYSTEMS 16 System Design 16 Virtualization and Management 16

PowerVM Capabilities 16 Virtual I/O Server 18

Availability and Recovery 19 Core RAS Features 19 Higher-level Capabilities 20

Security Functions 21 DETAILED DATA 22

Basis of Calculations 22 Profiles and Scenarios 22 Configurations and Costs 23

Costs Breakdown 23

List of Figures 1. Profiles: Average Three-year Costs for IBM Power and Windows Server Scenarios 2 2. Recent TPC-C Benchmark Results 3 3. Representative Causes of Unplanned Outages: Windows Servers 4 4. Representative Causes of Planned Outages: Windows Servers 5 5. Power Server and VMware Partitioning Options 5 6. VMware Applications: Examples 6 7. Data Growth Example: Distribution Company 10 8. Data Growth Example: Manufacturing Company 10 9. 24-hour Internet Banking Activity: Example 11 10. Causes of U.S. Data Center Disasters: 2001 to 2007 12 11. U.S. Cybercrime Incidents in 2007: Percent of Organizations Reporting 14 12. Power Server Virtualization Capabilities 17 13. Dedicated Adapter and Virtual I/O Server Configurations: Examples 19 14. AIX 6.1 Security Functions 21 15. Company Profiles and Scenarios 22 16. Detailed Costs Breakdown 24

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CHALLENGES AND SOLUTIONS

Challenges What platform should be employed for database serving in midsize businesses? The answer to this question is changing.

Five years ago, clear distinctions could be drawn between the IT challenges facing large and midsize companies. But this is no longer the case. Increasingly, midsize businesses are deploying sophisticated solutions such as enterprise resource planning (ERP), customer relationship management (CRM), and business intelligence (BI) systems to increase competitiveness and improve operational efficiency.

Use of these systems, along with other new database applications and new data retention demands, is causing rapid expansion of data volumes. In most midsize organizations, the amount of raw data is already increasing by 30 to 60 percent per year. Growth rates are expected to accelerate.

At the same time, data structures are growing more complex, demands for cross-organizational access to information are becoming pervasive, and external users increasingly interface to core databases through customer and supplier self-service systems. The challenges of maintaining performance, availability, recoverability, and security of data will grow more daunting over time.

How will these challenges be met? The answer to this question is not a matter of technological detail. It engages the entire business.

Databases house the most powerful competitive resource of the 21st century – information. As conventional forms of differentiation erode, the effectiveness with which organizations use information is becoming an increasingly critical determinant of business performance. That effectiveness, in turn, depends in no small measure upon database infrastructures and the platforms that support them.

No component of IT strategy is more important. Most server functions, such as application and Web serving, can be handled comparatively easily by “commodity” platforms. But requirements for core database serving are significantly different. For organizations concerned to meet these requirements now, and in the future, new approaches are needed.

This report looks at one such approach – the use of the IBM Power platform as an alternative to commodity Windows servers.

There are a number of reasons to consider the Power platform:

1. In performance, scalability, and key functional capabilities, it offers a more effective solution for core database serving.

2. It provides state-of-the-art virtualization capabilities in a manner that is a great deal less complex than Windows and VMware technologies.

3. It may cost less.

Costs Once regarded as an option primarily for large organizations, UNIX servers have grown increasingly affordable. This is particularly the case for the new IBM Power 520 and 550 Express servers, which offer a cost-effective alternative to Windows servers, SQL Server databases, and VMware virtualization tools.

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This cost-effectiveness is illustrated by four comparisons of manufacturing, distribution, transportation, and retail companies presented in this report. In these comparisons, three-year costs for Power server deployment scenarios with Oracle databases range from 29 percent to 37 percent less, and average 32 percent less than those for Windows- and SQL Server-based equivalents.

If both Windows and Power platforms are equipped with Oracle databases, three-year costs for Power server scenarios range from 41 percent to 52 percent less, and average 45 percent less.

Figure 1 summarizes these results.

Figure 1 Profiles: Average Three-year Costs for IBM Power and Windows Server Scenarios

In these comparisons, Power server scenarios include the AIX 6.1 operating system and Oracle 11g Standard Edition, while Windows servers are configured with Windows Server 2005 Enterprise Edition and SQL Server 2005 Workgroup Edition or Oracle 11g Standard Edition.

Three-year costs include hardware acquisition and maintenance, license and support costs for systems and database software, system administration personnel, and facilities (primarily power and cooling) costs. Windows server-based scenarios include use of VMware Infrastructure 3 tools.

Hardware, maintenance, and software license and support costs were calculated using “street” prices (i.e., discounted prices actually paid by users). The basis of these calculations is discussed in the Detailed Data section of this report. Actual prices and costs experienced by individual organizations may vary.

Cost disparities, however, are only part of the picture. Distinctive Power platform capabilities in performance, scalability, availability, virtualization, system and workload management, personnel productivity, and overall complexity reduction also contribute to the business case for this platform.

These capabilities are discussed below. Later sections of the report deal in more detail with the business importance of core database serving in midsize organizations, and with the distinctive technical characteristics of Power platforms that are relevant to this role.

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Capabilities

Performance

Power servers equipped with the IBM AIX operating system are recognized performance leaders. Industry benchmark tests, as well as user experiences, show that Power servers outperform Intel-based equivalents by wide margins.

This reflects not only the capabilities of POWER6 processors, but also broader design parameters. System-level performance potential has been optimized at all levels of design and implementation – including microelectronics, module- and subsystem-level components, internal communications, I/O, and system-level hardware and software.

System performance strengths have been reflected in a number of industry benchmark results. One example is the Transaction Processing Performance Council’s TPC-C benchmark designed to measure transactional performance.

At the time of writing, the most recent results for the POWER6-based Power 550 and its nearest Intel Xeon-based competitor, the Hewlett-Packard DL580, showed that an eight-core model of the 550 outperformed a 16-core model of the latter by more than 1.5 times.

On a per core basis, POWER6 engines were over three times more powerful than Xeon equivalents. These results are summarized in figure 2.

Figure 2 Recent TPC-C Benchmark Results

Server Configuration TPC-C Throughput Per Core

IBM Power 550 server with 4 x dual-core 4.2 GHz POWER6 (8 cores) 16 GB RAM, AIX 5L & DB2 9 629,159 78,645

Hewlett Packard DL580 with 4 x quad-core 2.93 GHz Intel Xeon (16 cores) 16 GB RAM, Windows Server 2003 & SQL Server 2005 Enterprise Editions 407,079 25,442

Source: Transaction Processing Performance Council Reports dated March 20, 2008 (Power 550) and September 5, 2007 (DL580).

As the TPC-C benchmark tends to measure processor- rather than system-level performance, these results probably understate the overall performance differential in favor of the Power server.

Scalability

For organizations experiencing 30 to 60 percent annual data growth and increasing data complexity, the ability of database servers to scale effectively, in a non-disruptive manner, is critical. The current IBM line of POWER6-based servers extends from entry-level single-core to 64-core configurations, representing a performance span of more than 60 times.

In comparison, standard Intel-based server platforms do not scale beyond four-way models that support, if quad-core processors are employed, up to 16 cores. Future performance improvements will depend upon the use of higher-bandwidth quad-core processors and, at some point, on the introduction of higher-density chip designs.

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For midsize organizations that need to move beyond four-way Windows database servers, one option will be to move to more expensive high-end platforms. Another will be to spread databases across multiple physical servers, an approach that will materially increase costs and complexities, as well as create new data integrity, backup, and recovery challenges.

Availability

Business trends, as well as the growth of Internet commerce, make the maintenance of high levels of system availability increasingly important for businesses.

Outages affecting application or Web servers may be dealt with comparatively easily by switching to alternate platforms. A hardware or software failure on a database server, however, may cause data to be lost or corrupted, with consequences that range from inconvenient to catastrophic. Providing redundancy for database servers means dealing with issues of data replication, synchronization, and recovery that are a great deal more complex than for other server functions.

Maintenance of high availability for database servers requires that organizations avoid two types of outage: (1) unplanned outages caused by hardware failures, software problems, and other factors; and (2) planned outages for such functions as hardware, operating system, database and applications software upgrades, and scheduled hardware and software maintenance.

There are significant differences between Power and Windows server platforms in their ability to avoid both types of outage. Power servers are equipped with industry-leading embedded features that reduce risks of hardware and software failures, mask the effects of failures that may occur, and enable rapid detection, diagnosis, and resolution of problems that may lead to outages.

Although functionally similar features are in some cases implemented in Intel-based hardware platforms and Windows software, these are generally less well integrated and effective. Unplanned outages due to causes such as those shown in figure 3 are more common.

Figure 3 Representative Causes of Unplanned Outages: Windows Servers

Windows servers also tend to experience higher levels of planned downtime. This is particularly the case for software upgrades, including patches. These, as figure 4 illustrates, represent the most common cause of planned outages for this platform.

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Figure 4 Representative Causes of Planned Outages: Windows Servers

In a Windows server environment, most software upgrades involve application of Microsoft fixes and patches. During 2007, for example, the company issued 33 patches – they are released in monthly batches – to address newly discovered security and malicious code (“malware”) vulnerabilities for Windows Server 2003, the operating system employed in comparisons in this report.

The general industry “rule of thumb” is that it takes at least two hours to apply a patch to a single Windows server.

Virtualization

Virtualization has generated a great deal of interest as organizations have sought to control proliferation of Windows servers. VMware virtualization tools, along with offerings by Microsoft and smaller players, have been adopted by a growing number of users in order to reduce numbers of physical servers.

Certain caveats about the use of these tools should be raised. One is that, while they may provide additional functionality, it is still necessary to deal with the limitations of Windows software environments.

Another is that, while virtualization is a comparatively new phenomenon for Windows server users, equivalent or superior capabilities have been employed – in some cases for more than a decade – in the AIX server world, and are typically more developed and mature.

VMware, for example, offers a single systems-software based partitioning method. Power server users may employ firmware-, systems software-, and application-based methods or combinations of these.

Power server options, which are summarized in figure 5, offer greater flexibility and enable higher levels of capacity utilization.

Figure 5 Power Server and VMware Partitioning Options

Type of Partition Power Server VMware

Firmware-based Logical partitions (LPARs) N/A

Operating system-based Micro-partitions Virtual Machines (VMs)

Application-based Workload partitions (WPARs) N/A

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Firmware-based logical partitions (LPARs) also enable higher levels of security for partitioned systems. In comparison, a key VMware weakness is that a single security penetration or malware infection may affect all of the partitions on a server.

In addition, workload partitions (WPARs), a capability not offered by VMware, enable organizations to encapsulate applications software while continuing to share the services of a single underlying database and operating system instance. This materially reduces the amount of time that must be spent on software upgrades and application of patches.

Power servers, moreover, employ a firmware-based hypervisor that is tightly integrated with core system features, and with AIX system and workload management facilities. VMware employs a software-based hypervisor that is less well integrated with underlying Intel-based hardware platforms and Windows operating systems.

VMware capabilities in such areas as partition mobility (meaning the ability to transfer partitions between physical servers to perform tasks that would otherwise require planned outages), server provisioning, failover clustering, and consolidated backup are also offered in equivalent or superior form for the AIX environment.

Another difference should also be highlighted. To date, VMware has been employed primarily for Internet and intranet infrastructure, messaging, file and print serving, software development, application serving, and other comparatively light-duty applications. There has been a great deal less experience with VMware for business-critical production database serving.

A recent survey by the International Technology Group found, for example, that only around 13 percent of VMware applications involved use of relational databases such as SQL Server, Oracle, and Sybase. Figure 6 summarizes these results.

Figure 6 VMware Applications: Examples

Most database serving applications, moreover, were for test, development, and other non-production functions rather than production systems.

There are important implications. For example, experiences with VMware in non-database roles, and consolidation levels and cost savings realized for these, may not be representative of what occurs when multiple production databases must be supported.

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VMware (the company) reports, for example, that users routinely achieve server consolidation ratios of 5:1 to 10:1 using its tools. This may be the case for many applications. But it is questionable whether such ratios could be achieved with databases supporting production ERP, CRM, BI, and other systems with significant numbers of active users.

Equally, there is less experience with provisioning, failover, backup, and other components of the VMware environment for production database systems. Organizations employing them in this role will thus tend to incur “early adopter” risks.

In comparison, Power server partitioning and virtualization are highly optimized for business-critical production database serving, and many users have achieved high levels of database server consolidation. The Power platform and its predecessors have been widely used in both roles for almost 20 years.

System and Workload Management

Although industry debate about virtualization tends to focus on partitioning, this is only part of the picture. System-level capacity utilization also depends upon the mechanisms that allocate system resources between, and monitor and control workload execution processes across partitions.

One of the core strengths of the Power platform is that highly developed system and workload management facilities are implemented at multiple levels and are closely integrated with partitioning technologies. This significantly increases capacity utilization levels. The effects are particularly significant in heterogeneous workload environments.

The combined impact of Power virtualization and management capabilities means that configurations are a great deal smaller than their Windows server and VMware counterparts. In the profile comparisons, one or two Power servers with from one to four cores handle workloads that require from two to five Windows servers with up to 16 cores.

Savings are realized in software priced on a per processor basis. Oracle database software costs for Power server scenarios, for example, average 23 percent less than SQL Server costs for Windows server equivalents, although Oracle is more expensive on a per processor basis than SQL Server.

A similar effect is apparent when Oracle database software costs for Power and Windows server scenarios are compared. Power server costs average 66 percent less than for Windows equivalents. This is the case even though Oracle is more expensive on a per core basis on Power servers.

Personnel Productivity

In the comparisons presented in this report, numbers of full time equivalent (FTE) system administrators are lower for Power than for Windows server scenarios. This reflects multiple variables. There are fewer physical servers, management facilities are better integrated across all system components, and Power platforms and AIX benefit from extensive implementation of IBM autonomic technologies.

Autonomic computing – meaning the application of artificial intelligence technologies to IT administration and optimization tasks – has been a major area of IBM design focus since the 1990s. Autonomic functions contribute to higher levels of system administrator productivity by streamlining and automating tasks that would otherwise require extensive manual intervention.

In comparison, Windows server management tends to be a more “labor-intensive” process and, in some respects, this is also the case for VMware. During 2007, for example, VMware (the company) issued 68 patches for VMware ESX 3, which is the basis of the VMware Infrastructure 3 package. There is no obvious reason to expect that these require less installation time than their Windows counterparts.

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A broader issue is also raised – whether use of VMware in midsize companies might increase rather than decrease IT costs and complexities. Guested, multi-layer software environments have significantly different administrative requirements to those of the conventional Windows server world.

Personnel costs may increase. The current industry norm is that salaries for Windows administrators with VMware skills are approximately 15 percent higher than for those without. Organizations may also be faced with major changes in skill sets and operating practices and, since VMware usage is growing rapidly among large users, it may be difficult for smaller companies to attract and retain experienced staff.

The benefits of VMware deployment in large organizations and the cost savings that may be realized through its use have been well documented. It is less clear, however, that such gains would be realized in midsize companies with fewer servers and more limited IT skill bases.

Complexity Reduction

Distinctive Power server capabilities contribute to a broader benefit – reduced technical complexity.

Higher system-level performance and scalability, along with more developed, more closely integrated virtualization and management facilities, enable higher levels of concentration than may be realized with Windows servers and VMware tools. This is the case even when – as is the case in the comparisons presented in this report – the latter are deployed and managed using industry “best practice” norms.

One key difference is in virtualization and system management capabilities. In a Windows and VMware environment, these are provided through software overlays. With Power servers, these capabilities are implemented “inside the box”; i.e., embedded into firmware and the AIX operating system. This materially reduces the complexities to which operators, administrators, and other IT staff are exposed.

This is also the case for Power server capabilities in availability, disaster recovery, security, and other areas. High levels of integration and automation do not merely reduce administrative overhead. They also reduce the potential for operator and administrator errors that may lead to outages, data loss, security and malware penetrations, and other negative effects.

Reduced complexity thus translates not only into lower personnel costs for system administration and related tasks, but also into improved quality of IT service and lower risk exposure.

Larger gains may also be realized. An organization that operates with an efficient, integrated IT infrastructure is better able to focus its resources on application- and process-related tasks that deliver higher business returns, rather than on the minutiae of managing underlying servers and systems software.

These are important benefits in any area of IT. They are even more significant for core database servers, whose business importance will increase significantly in the future.

Excessive technical complexity has undermined the IT strategies of many large organizations. In midsize businesses with fewer resources, smaller IT staffs, and more limited skill bases, the effects may be a great deal more serious.

The goal should be to realize the benefits of advanced technology without increases in complexity that can diminish these. The use of Power platforms for core database serving may materially contribute to the realization of this goal.

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BUSINESS VIEW

Why Database Servers Matter What importance do database servers have for midsize businesses? There are a number of answers to this question.

One is that database servers are the backbone structure for most major business systems. The data they contain is the basis of the vast majority the information used internally and shared with customers and business partners. If they do not operate effectively, processes throughout organizations may be impacted. If they cease operating, so does the business.

A second is that issues such as compliance, business continuity, and security primarily involve database servers. Effective records retention and retrieval, disaster recovery, and protection of critical organizational information require a strong focus on software tools, storage resources, and operational procedures that surround databases and the server platforms upon which they run.

Requirements for database server deployment and operation, moreover, are significantly different from those of other types of server. The characteristics of database workloads make it more difficult to maintain performance, availability, and other variables of service quality than for application and Web servers. This is particularly the case when databases are large, structurally complex, and accessed by numerous concurrent users.

For these reasons, choices of core database servers should be governed by different principles than are applied to other types of server. Commodity platforms and operating systems may not be appropriate for data resources upon which organizations are fundamentally dependent not only to support their day-to day operations, but also to enable long-term growth and competitiveness.

The business importance of core database servers and the technical challenges that these pose are already substantial. Both, however, are increasing. Multiple trends are causing this to occur.

Data Growth At the beginning of this decade, the amount of server-based data in most small and midsize businesses could be measured in gigabytes or tens of gigabytes. Now, even small organizations typically manage hundreds of gigabytes and midsize businesses terabytes. Growth in disk storage has reflected growth in underlying data volumes.

This trend has occurred across all industries. It has been driven by a number of factors. These include use of increasingly sophisticated ERP and CRM systems, as well as a wide range of other new applications that augment competitive performance and increase business efficiency. BI tools have also become more affordable, and their adoption by midsize organizations has become pervasive.

Messaging systems have expanded, and messages have grown larger and more complex. Internet commerce and intranets have further accelerated growth. At the same time, more data has been retained, for longer periods, for business as well as compliance reasons.

The implications of these trends may be illustrated by two examples.

Figure 7 shows projected data growth for a 500-employee distribution company over a five-year period. Projections are based on the company’s growth rates during 2007. Within five years, the overall volume of data within the company will be more than four times larger.

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Figure 7 Data Growth Example: Distribution Company

Higher growth rates are the norm in many organizations. Figure 8, for example, shows comparable projections for a 2,500-employee manufacturing company that has aggressively deployed sophisticated ERP, CRM, and BI solutions. In this case, within five years overall data volume will be more than six times larger.

Figure 8 Data Growth Example: Manufacturing Company

Similar growth patterns are occurring in a wide range of industries.

The challenges of managing data growth are magnified by the fact that databases are also growing more interdependent. As integration increases, the diversity of types of data tends to increase, and the interrelationships between data sets tend to expand.

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Data movement patterns are also changing. For example, it may be necessary to make data generated by core business systems accessible to CRM users and Internet self-service systems in real time, and to replicate it to business intelligence databases to support growing user communities. Replication may thus involve not only larger, but also faster, more frequent transfers of data.

Challenges are compounded by server consolidation trends. In most organizations, it will be necessary to maintain performance with progressively larger, more complex databases with increasing levels of interaction. If database servers are consolidated, however, these will be concentrated on fewer platforms. Highly efficient, granular capabilities for partitioning, and for system and workload management capabilities will be required.

These trends will materially increase the stresses placed on database server platforms, which must deliver significantly higher levels of performance, scalability, and manageability than in the past. Growth in data volumes will also magnify the challenges of maintaining high levels of availability and ensuring effective disaster recovery, security, and malware protection for core databases.

High Availability Round-the-clock operations have long been the norm in many industries. Economic and competitive pressures, however, are pushing a growing number of organizations toward 24x7 operating models. Even where businesses do not themselves function 24 hours a day, their systems must. Normal business hours, at least from an IT perspective, no longer exist.

Globalization has emerged as a major driver of this shift. Manufacturers, distributors, retailers, transportation and logistics providers, and others increasingly deal with international customers, suppliers, or both. Even relatively small companies must often maintain accessibility of systems to external as well as internal users spread across numerous time zones, or worldwide.

The impact of the Internet has been even more pervasive. The Internet is, almost by definition, a 24x7 medium. There is now an expectation that customer, supplier, and employee self-service systems, as well as, in many cases, call centers and customer interaction centers, should be accessible at all times.

The experience of Internet commerce has been that activity occurs around the clock, 365 days a year. Figure 9, for example, shows the pattern of activity over a 24-hour period for an online banking system operated by a midsize retail bank. Comparable patterns are experienced by many other businesses.

Figure 9 24-hour Internet Banking Activity: Example

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Any interruption of service, at any time, may affect customers. A customer who is unable to access a supplier’s online systems directly, or who is unable to obtain information, place orders, or perform transactions because other systems are down will inevitably be dissatisfied.

Even if the effects are not immediately apparent, in most industries there is a clear relationship between customer dissatisfaction and customer attrition. The bottom-line impact of service interruptions may be substantial, particularly if measured in terms of customer lifetime value (CLV) and equivalent metrics. Few businesses can afford to alienate their customers.

Other trends increase vulnerability to outages. In industries where supply chain operations form a major component of business models, for example, “lean” strategies tend to magnify the effects of disruptions. Businesses with few or no inventory buffers are more likely to experience supply bottlenecks if delays affect ordering, production, and logistics processes.

The growing role of information in critical business processes also increases availability pressures. The business impact of a delay in getting the right information to the right person, at the right time, may be as great as, or greater than failure to deliver a part to a production line, a shipment to a warehouse, or a product or service to a customer in a timely manner.

Disaster Recovery Backup and recovery of data have been longstanding data center disciplines. In most organizations, however, these processes are designed to guard against the effects of comparatively minor data loss or corruption incidents.

A number of trends, however, have caused growing awareness of the potential business impact of more serious events that may disrupt business operations for extended periods, or cause large-scale data loss, or both. In the United States, for example, the events of September 11, 2001 and widespread data center outages caused by Hurricane Katrina in 2005, led many organizations to implement new disaster recovery plans or to expand existing arrangements.

Although such incidents have dominated headlines, businesses face a much broader spectrum of threats. Figure 10, for example, summarizes the results of an analysis by the International Technology Group of U.S. data center disasters, meaning events that caused data centers to cease operating for at least 24 hours.

Figure 10 Causes of U.S. Data Center Disasters: 2001 to 2007

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If organizations are not equipped to deal with such events, outages in the 24- to 72-hour range are routine, and it may take weeks to fully restore business operations and recover data – if data can be recovered.

Among other evidence, a number of studies have attempted to quantify the bottom-line impact of severe data center outages. One of these, conducted by researchers at the University of Texas at Arlington, concluded that on average, by the sixth day of a major outage, companies experience a 25 percent loss in daily revenue. By the 25th day, the loss reaches 40 percent. Within two weeks, 75 percent of organizations reach critical or total loss of functioning.

Other experiences confirm this picture. Many businesses that experienced severe outages as a result of Hurricane Katrina found that they had badly underestimated the amount of time they could afford to be offline before serious business damage occurred. Customer loss, for example, often occurred at an earlier stage, and was more extensive than had originally been projected.

The effects of outages impacting supply chain operations, similarly, often lasted long after IT service had been restored. Once process cycles were disrupted, it could take months to meet order backlogs, clear inventory and supply bottlenecks, and reestablish logistics arrangements.

Such events have also demonstrated another principle: large organizations with greater financial and IT resources are better able to recover from such disruptions than midsize businesses. For these, the impact may be fatal.

As a result, a growing number of midsize businesses are putting in place mechanisms that enable more rapid recovery of business-critical systems and data. The most common approach is to employ failover clustering, which involves replication of data to standby systems, located at the same site (providing basic protection against system-level outages) or a remote location (protecting against events that may disable entire data center).

In the event that the primary system is disabled, the standby system takes over processing using replicated data. There are multiple levels of sophistication that translate into different delays – which may range from a few minutes to 12 or more hours – in resuming operations and reinstating data.

Whichever method is adopted, clustered failover is a complex process that requires investment in specialized tools and practices – there are no “commodity” solutions. Organizations with no previous experience in this area often underestimate the costs and difficulties involved.

Challenges are magnified as data volumes expand, and are magnified further, when it is necessary to replicate and recover the contents of multiple databases running in partitions on a single physical server. For these reasons, close attention should be paid to the disaster recovery capabilities of databases as well as the servers supporting these.

Security and Malware IT security and malware threats have been steadily escalating since the 1990s. Hacking incidents are now so common that many security authorities no longer bother to aggregate statistics on these. Spam messages account for the majority of e-mail traffic worldwide, while the number of malware variants is generally estimated to be in the range of 500,000 to 1,000,000.

The variety and sophistication of threats have progressively expanded since the 1990s. Hacking, denial of service (DoS), spam, viruses, and Web site defacement have been joined by bots, cut-and-paste, man-in-the-middle, pharming, phishing, password sniffing, pump and dump scams, social engineering, spyware, Trojans, zombies, and other new forms of attack.

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Cybercrime has become a fact for most users. During 2007, for example, U.S. organizations reported the types of incident summarized in figure 11. Similar patterns occur worldwide.

Figure 11 U.S. Cybercrime Incidents in 2007: Percent of Organizations Reporting

There is general agreement among security professionals and among law enforcement and other government agencies dealing with this area that criminal activity is escalating. Over the last few years, security experts have also reported a number of disturbing trends. These include:

• Professionalization. Since 2006, a major shift in the pattern of hacker attacks has become apparent. These have become a great deal more professional and better coordinated than in the past, and their focus is increasingly on financial gain.

The field is becoming dominated by criminal enterprises operating internationally. Many such groups have been identified in Russia, Eastern Europe, Latin America, and other regions.

Perpetrators are increasingly initiating gateway attacks; i.e., seeking to create covert breaches that can be exploited over time without target organizations becoming aware of them. Industry observers also report sharp increases in the prevalence of spyware – i.e., malware that collects and forwards information from computers without the knowledge of users.

The primary goal of such attacks has typically been to harvest personal information on customers. In parallel, an “underground economy” has begun to emerge in which this information is traded online on an unprecedented scale. Attacks targeting sensitive financial data, intellectual property and other records have also been increasing.

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• Bot networks. Use of bots – i.e., malware that allows an attacker to gain control over a computer for illicit purposes – has expanded dramatically over the last few years.

Estimates of the number of bot-controlled computers worldwide range from 5 million to 150 million. Most spam, as well as many types of other attack, are now believed to originate from these.

The growth of bot networks, whose services may be rented from cybercrime groups, has made it possible for small groups or even individuals not only to conduct illicit mass-mailings, but also to launch major attacks against targeted organizations.

• Insider abuse. There have been signs that theft of sensitive information, introduction of malware, and deliberate online sabotage by insiders have increased significantly. Security firms as well as law enforcement agencies have also reported a growing number of incidents in which insiders worked with external criminals to by-pass security arrangements.

One area of growth has been in placement of “logic bombs” – i.e.; malware designed to activate at a specific time, or upon a particular trigger – by disgruntled IT employees. In some cases, these have resulted in widespread deletion or corruption of records as well as system outages causing serious business damage.

Until recently, cybercriminals tended to target large corporations. This picture, however, is changing. As large organizations have increased the depth and sophistication of their online defenses, cybercrime groups have increasingly targeted smaller firms. Midsize businesses are also potentially vulnerable to the actions of individual hackers, disgruntled employees, and others who may hold grudges against them.

For these reasons, it is no longer sufficient to rely only upon perimeter defenses; i.e., firewall-based defenses that aim to prevent penetration from the Internet. These may be breached and, in any case, they do not protect against insider abuse. A further layer of security around core databases is required.

In this area, there are significant differences between Windows and UNIX server environments.

Windows is the world’s most frequently targeted – and penetrated – operating system, and the vast majority of all malware is written for Windows environments. An unprotected Windows server interfaced to the Internet will typically be infected in a manner of minutes. Microsoft’s record in preventing and patching security and malware vulnerabilities has left much to be desired. VMware has also been increasingly targeted and, as discussed earlier, now requires extensive patching.

UNIX systems are also subject to hacking and malware. However, operating system-level defenses are generally more mature, and there are numerous high-end tools and facilities that have been integrated into the major vendor offerings. AIX security features are among the industry’s best. Implementation of security features and issue of patches are handled by IBM.

Security and malware protection is not typically the main deciding factor for organizations in selecting platforms. The capabilities of the Power platform and AIX in this area are, however, an important reinforcement of its considerable strengths in other areas.

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POWER SYSTEMS

System Design The IBM Power platform is the market share leader in UNIX servers. The system is built around IBM POWER reduced instruction set computing (RISC) architecture – the POWER6 processors employed in current models represent the sixth generation of this architecture – and IBM’s version of the UNIX operating system, AIX.

The Power platform is a recognized industry performance leader. This reflects not only the high computing throughput of POWER6 processors, but also such features as highly effective compiler- and operating system-level performance acceleration; low levels of symmetric multiprocessing (SMP) overhead; and extensive system-level integration and optimization of performance-related features.

The overall system design also incorporates highly developed features in such areas as virtualization, system and workload management, availability and recovery optimization, security, and autonomic computing. These are derived from a variety of sources, including IBM mainframe systems.

In addition to AIX, Power servers support Red Hat and SUSE (Novell) Linux, and the i operating system employed for the company’s earlier System i platform. All of these may run on a single physical server configuration. Linux, AIX, and i instances may run within LPARs.

The strengths of the Power platform are a function not only of individual components and technologies, but also of the manner in which these are integrated and optimized in a mutually reinforcing manner. The overall impact is such that “the whole is more than the sum of the parts.”

In this respect, Power servers differ from Intel-based Windows server environments. Although Intel, vendors of Intel-based server hardware, Microsoft, and VMware cooperate with each other to varying degrees in addressing design and implementation issues, the levels of integration and optimization that result from these relationships are significantly less than those achieved by IBM for the Power platform.

Virtualization and Management

PowerVM Capabilities

Virtualization capabilities for the Power platform are provided for AIX and Linux by IBM PowerVM technology. These include integrated partitioning and management along with a further set of I/O virtualization options. The overall set of PowerVM capabilities is illustrated in figure 12.

Key features include:

• Partitioning. Power servers support three complementary forms of partitioning:

1. Hardware-based LPARs are enabled by the firmware- (microcode-) based hypervisor and allow instances of AIX, Linux, or both to run in secure partitions. LPARs may be configured with a base of one processor and subsequent increments as small as one-tenth of a processor. Up to 64 LPARs are supported.

Processor resources may be dedicated to or shared by LPARs (Dynamic LPARs). Dynamic LPAR capability allows for the creation of shared processor pools, whose processor, memory, and I/O resources may be shared by multiple LPARs. Resources are reallocated automatically based on preset criteria, enabling more efficient use of system resources to support workloads whose capacity requirements vary.

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Figure 12 Power Server Virtualization Capabilities

A new function in AIX 6.1, Shared Dedicated Capacity, allows shared processor pools to use CPU cycles in dedicated LPARs when these are not in use.

2. Software-based micro-partitions provide a further level of granularity. Micro-partitions are commonly employed to support instances requiring limited system resources, and to improve load balancing for large, complex workloads.

Micro-partitions may be configured with a base of one tenth of a processor and subsequent increments as small as one one-hundredth of a processor. Up to 254 micro-partitions are supported. This technology is comparable to VMware Virtual Machines.

3. Workload partitions (WPARs) allow users to create multiple software-based partitions within a single AIX instance. This approach enables high levels of flexibility and capacity utilization for applications executing heterogeneous workloads and simplifies patching and other operating system maintenance tasks.

AIX 6.1

SYSTEM MANAGEMENT SERVICES IBM Director

Shared Processor Pool Shared Dedicated Capacity

HYPERVISOR

Integrated Virtual Ethernet

Physical Adapters

VIRTUAL I/O SERVER

Virtual Ethernet Adapters Virtual SCSI Adapters

LPAR LPAR

WPARs

LPAR

WPARs

Virtual LAN

LPAR

Micro-partitions

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Two types of WPAR are supported: (1) System WPARs incorporate application-specific system administration, filesystem, and security services; and (2) Application WPARs offer a simpler approach that encapsulates application logic to improve manageability. Application WPARs are typically employed for light-duty applications that do not need to be separately administered.

A further level of capability is provided by the WPAR Manager in AIX 6.1. This allows administrators to manage WPARs across multiple physical Power servers, and supports Live Partition Mobility and Live Application Mobility.

These technologies allow organizations to consolidate multiple applications, as well as multiple components of the same application (e.g., database, application, and Web serving) that would otherwise require dedicated servers. Dozens of dedicated servers have routinely been replaced with single Power servers and, in some cases, more than 100 instances have been consolidated.

• System and workload management. Partitioning techniques offer the potential for significantly higher levels of overall capacity utilization than may be realized with dedicated servers.

The extent to which this potential will be realized in practice, however, depends heavily on the mechanisms that allocate system resources between, and monitor and control workload execution processes across partitions. If these are ineffective, a high proportion of system capacity may be idle at any given time. Surges in workloads running in individual partitions may also create bottlenecks if additional capacity is not available in a timely manner.

One of the core strengths of the Power platform is that management facilities are implemented at multiple levels and are closely integrated and optimized within the overall system environment.

The IBM Director family of products provides management functions for all system-level resources as well as resources dedicated to and shared between partitions. It implements a common administrator interface to all virtualization facilities through the PowerVM Integrated Virtualization Manager.

AIX management facilities also address a set of requirements that have proved important in encouraging large-scale adoption of virtualization: the ability to track usage of shared system resources in a manner that enables organizations to implement effective chargeback procedures.

AIX contains an extensive suite of system-level accounting features that allows administrators to collect statistics on usage of resources such as processors, memory, disks and adapters by application, process, transaction, or other variables, or combinations of these.

One of the reasons for continuing to employ dedicated servers is often that this approach allows business units that control applications to track server costs in a simple and non-controversial manner. If, however, costs of shared server platforms can be transparently and credibly determined, a significant organizational obstacle to consolidation may be removed.

Virtual I/O Server

A second set of Power server virtualization capabilities is implemented in the Virtual I/O Server, an LPAR-based appliance that allows for the creation of virtual Ethernet and SCSI adapters.

The principal benefit of the Virtual I/O Server is that it allows operating system instances running in multiple partitions to share a common pool of LAN adapters as well as Fiber Channel, SCSI, and RAID devices. It is not necessary to dedicate adapters to individual partitions. As figure 13 illustrates, the number of physical adapters may be significantly reduced.

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Figure 13 Dedicated Adapter and Virtual I/O Server Configurations: Examples

This approach may not be appropriate for all partitions. For most workloads, however, it offers the potential for significant savings in adapter and related LAN and SAN infrastructure costs.

Virtual I/O Servers interface to a virtual LAN or multiple virtual LANs that provide high-speed interconnection between LPARs. Virtual LAN capability further reduces network complexity and vulnerability. Virtual LANs may also significantly reduce throughput times for interaction between LPAR-based systems, as well as for replication and other data movement processes.

A more basic form of I/O virtualization is provided by Integrated Virtual Ethernet, a hypervisor-based feature that enables sharing of Ethernet adapters without use of a Virtual I/O Server.

Availability and Recovery

Core RAS Features

The Power platform benefits from a wide range of hardware- and software-based reliability, availability, and serviceability (RAS) features. These are designed to reduce the potential for unplanned outages and to limit the frequency and duration of planned outages.

Core RAS features include the following:

• Basic capabilities include high levels of component reliability and redundancy, along with pervasive monitoring, diagnostic, and fault isolation and resolution facilities. These are built into processors, main memory, cache, and packaging modules, as well as into all major hardware components. In many cases, multiple layers of protection and self-test are implemented.

Key functionality is delivered by IBM-developed Chipkill and First Failure Data Capture (FFDC) technologies. Chipkill, which performs error checking for memory devices, is regarded as more reliable than conventional error correction code (ECC) techniques.

Adapters

DEDICATED ADAPTER CONFIGURATION

Partitions

1

2

3

6

5

4

Partitions

VIRTUAL I/O SERVER CONFIGURATION

1

2

3

6

5

4

Adapters

VIRTUAL I/O SERVER

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FFDC technology employs thousands of embedded sensors that identify and report failures to a separately powered Service Processor, which also monitors environmental conditions. It also forms the basis for predictive failure analysis functions that identify potential as well as actual failures throughout the system.

The Service Processor can automatically notify system administrators or contact an IBM Support Center directly (“call home” service) to report events requiring service intervention.

• Failure masking capabilities prevent outages in case failures do occur. For example, processors may be automatically disabled if they begin to malfunction, and standby processors may be activated without interrupting operations. Dynamic LPARs facilitate this process.

Concurrent maintenance (“hot plugging”) functions and dynamic sparing also reduce requirements for planned outages. LPARs reduce them further. Systems software and application upgrades, for example, may be performed in one LPAR while the original system continues operating in another. Software may be copied to and modified in LPARs. Backups may be executed concurrently with online processing.

RAS features are implemented at multiple levels, including LPARs (availability-related functions are built into the hypervisor), the Virtual I/O Server (for adapters), and system-level management facilities. These capabilities draw extensively on mainframe high availability design concepts and technologies.

Higher-level Capabilities

Higher-level capabilities include the following:

• Live Partition Mobility and Live Application Mobility enable users to move partitions between systems with no application downtime, or limited downtime respectively.

Live Partition Mobility is designed primarily for organizations that need to shut down a server for maintenance, upgrades, and other reasons, but cannot afford to take business-critical production systems offline. These may be simply transferred to another server and returned after the original server is restarted.

The only interruption of service would be due to network latency. If sufficient bandwidth was available, a delay of – at most – a few seconds could typically be expected. Live Application Mobility involves longer delays (e.g., 20 seconds), and would normally be employed for less availability-sensitive applications.

• PowerHA Cluster Manager (HACMP) is IBM’s principal solution for AIX and Linux failover clustering. Although the amount of time required to failover and restart systems may vary, the “best practice” norm is seconds to minutes. HACMP users have achieved mainframe-class failover and recovery even for highly demanding, complex workloads.

HACMP supports all of the partition types described above. Additional optimization functions are provided for IBM DB2 and Oracle databases and for IBM WebSphere applications.

If PowerHA Extended Distance (HACMP/XD) is employed, failover may occur at distances up to 300 kilometers if sufficient wide area network bandwidth is available.

These solutions provide a spectrum of capability designed to meet a wide range of user needs. Live Partition Mobility and Live Application Mobility, for example, do not require use of HACMP or other cluster solutions, but do not protect against unplanned outages. Organizations typically continue to employ HACMP to protect against these, and for disaster recovery.

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Security Functions Security functions in AIX 6.1 incorporate a wide range of industry standards and tools, including the principal TCP/IP security standards and the widely used Kerberos system, along with extensive AIX-specific capabilities.

Key AIX-specific capabilities include a full Role Based Access Control (RBAC) system – RBAC is a state-of-the-art approach employed by many large corporations and government organizations – along with a Trusted Execution Environment that checks system files for possible malware infections, and the IBM Enhanced Journaled File System (JFS2), which enables encryption of data in file systems.

System-level management of security functions is integrated within the operating system. An additional no-charge tool, AIX Expert, provides a single administrator interface for all security settings, along user access tracking and extensive auditing functions, including compliance with Sarbanes-Oxley and Control Objectives for Information and related Technology (COBIT) audit frameworks.

The overall set of AIX 6.1 security functions is summarized in figure 14.

Figure 14 AIX 6.1 Security Functions

System-level Management Authorization Network security Local passwords Long passphrases Expanded password algorithms Kerberos authentication LDAP authentication NFS authentication Enterprise Identity Mapping

IP Security ipfilters Secure FTP Secure TCP TCP wrappers Open Secure Shell (OpenSSH) Secure By Default (SBD) Kerberos network authentication

Access control Encryption

Role Based Access Control (RBAC) system File Permission Manager Pluggable Authentication Modules (PAM) Mandatory Access Control (MAC) Integrity Checking

Trusted Computing Base Trusted Execution Environment

File system encryption Advanced Encryption Standard (AES) OpenSSH encryption Open Secure Sockets Layer (OpenSSL) Kerberos encryption & checksum Cryptographic Library 4764 PCI-X Cryptographic Coprocessor

AIX Security Expert Multiple security levels Configuration management Policy management

User accounting Auditing subsystem SOX/COBIT assistance

For most Windows and VMware users, achieving the level of security capability offered by AIX 6.1 would require the use of comparatively sophisticated third-party tools. Even then, basic security vulnerabilities in these operating systems would remain.

Higher levels of AIX security may be realized using IBM Tivoli solutions.

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DETAILED DATA

Basis of Calculations

Profiles and Scenarios

The profiles and scenarios that form the basis of the cost calculations presented in this report are composites based on the experiences of multiple companies. They were constructed using data on applications, databases, workloads, user populations, server hardware and software configurations, and IT staffing levels supplied by 14 midsize companies in the same industries and approximate size ranges.

Profiles and scenarios are summarized in figure 15.

Figure 15 Company Profiles and Scenarios

Manufacturing Distribution Transportation Retail BUSINESS PROFILE Sporting goods manufacturer $50 million sales 300 employees Single production plant

Food & beverage distributor $200 million sales 750 employees 3 distribution centers

Trucking company $250 million sales 3,500 employees 2,500 tractors + 4,700 trailers

Specialty retail chain $1 billion sales 7,500 employees 425 stores

APPLICATIONS & USERS ERP, CRM, data mart

100 users

ERP, CRM, data mart, internal reporting

250 users

Transportation management, ERP, data mart, regulatory reporting

550 users

Retail management, materials management, finance & procurement, HR, data mart, store reporting, departmental

950 users

POWER SERVER SCENARIOS Power 520 1 x 4.2 GHz 12 GB RAM 4 micro-partitions 0.23 FTE

Power 520 2 x 4.2 GHz 16 GB RAM 2 LPARs 6 micro-partitions 0.31 FTE

Power 520 4 x 4.2 GHz 28 GB RAM 3 LPARs 8 micro-partitions 0.35 FTE

Power 550 4 x 4.2 GHz* 48 GB RAM, 3 LPARs 12 micro-partitions Power 550 4 x 3.5 GHz* 28 GB RAM, 2 LPARs 5 micro-partitions

0.77 FTE

WINDOWS SERVER SCENARIOS 2/4 x Xeon 1.6 GHz 8 GB RAM

2/4 x Xeon 1.6 GHz 8 GB RAM 3 VMs**

0.33 FTE

2/8 x Xeon 2.33 GHz 8 GB RAM 2 VMs**

2/4 x Xeon 2.66 GHz 12 GB RAM 4 VMs**

0.46 FTE

4/16 x Xeon 1.6 GHz 20 GB RAM 3 VMs**

2/4 x Xeon 3 GHz 12 GB RAM 5 VMs**

0.54 FTE

4/16 x Xeon 2.4 GHz* 24 GB RAM, 3 VMs** 4/16 x Xeon 1.6 GHz* 24 GB RAM, 4 VMs** 2/8 x Xeon 2.33 GHz 16 GB RAM, 3 VMs** 2/4 x Xeon 1.6 GHz 16 GB RAM, 5 VMs** 2/4 x Xeon 1.6 GHz 8 GB RAM, 2 VMs**

1.51 FTEs

*Failover cluster **VMware virtual machines

In this chart, numbers of processors and cores are shown for Windows servers – e.g., “2/4 x Xeon 1.6 GHz” refers to a server with two dual-core Intel Xeon 1.6 GHz processors, while “2/8 x Xeon 2.33 GHz” refers to a server with two Intel Xeon 2.33 GHz quad-core processors. Numbers of cores only are shown for Power server configurations.

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Since Power 520 and 550 models were introduced only recently, configurations were initially based on the experiences of companies employing earlier IBM System p POWER5- and POWER5+-based models. Configurations were then resized based on estimates of comparative performance for complex database server workloads.

Some companies that contributed inputs for Windows server scenarios employed older generations of Xeon technology. Where this was the case, configurations were resized in the same manner.

All scenarios for both platforms include production databases as well as development, test, quality assurance, and other non-production instances. Application, Web, and other servers are not included.

Configurations and Costs

Power server scenarios include use of AIX 6.1 and Oracle 11g Standard Edition, while Windows servers are configured with Windows Server 2005 Enterprise Edition and SQL Server 2005 Workgroup Edition or Oracle 11g Standard Edition.

Retail company scenarios also include use of Oracle Real Application Clusters (RAC) as well as clustered failover solutions. These are IBM HACMP and an equivalent third-party offering for Windows servers.

For manufacturing, distribution, and transportation company profiles, partitioning and virtualization capabilities in Power server scenarios are provided by IBM PowerVM Express Edition. For Windows server scenarios, these capabilities are provided by VMware Infrastructure 3 Foundation. For the retail company profile, PowerVM Enterprise Edition and VMware Infrastructure 3 Enterprise Edition are employed for Power and Windows server scenarios respectively.

Hardware, maintenance, and software license and support costs were calculated using street prices. Costs for systems software and SQL Server for Windows server scenarios include Microsoft Software Assurance.

Personnel costs are for the FTE values shown in figure 15. Calculations employed annual salaries of $72,714 for AIX system administrators and $74,559 for Windows system administrators. The latter is based on an annual salary of $64,834 plus a 15 percent premium for VMware skills. Annual salaries were increased by 28.4 percent to allow for bonuses, benefits, training, and other personnel-related items.

Facilities costs include occupancy and electricity consumption by servers, as well as costs of support equipment such as uninterruptible power supplies (UPS) and power and cooling devices. Allowance was also made for acquisition and maintenance costs for this equipment.

Costs Breakdown A detailed breakdown of three-year costs for all profiles and scenarios is presented in figure 16.

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Figure 16 Detailed Costs Breakdown

Company Consumer Products Distribution Transportation Retail

POWER SERVER SCENARIOS Hardware 12,456 16,558 22,702 133,290

Hardware maintenance 1,325 1,958 2,573 9,523

Systems software 3,065 5,796 11,258 51,223

Database software 14,940 29,880 59,760 99,500

Personnel 64,422 86,829 98,033 215,673

Facilities 794 1,008 1,539 4,523

TOTAL ($) 97,001 142,030 195,866 513,732

WINDOWS SERVER SCENARIOS Hardware 7,476 11,195 20,791 50,962

Hardware Maintenance 3,298 3,298 4,818 11,135

Systems software 14,402 20,798 43,841 99,614

Database software (SQL Server) 28,588 55,662 59,031 120,468

Database software (Oracle) 41,832 99,600 179,280 280,259

Personnel 94,776 132,113 155,089 433,674

Facilities 1,651 1,671 4,360 7,745

TOTAL with SQL Server ($) 150,191 224,737 287,929 723,598 TOTAL with Oracle ($) 163,435 268,675 408,178 883,389

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ABOUT THE INTERNATIONAL TECHNOLOGY GROUP ITG sharpens your awareness of what’s happening and your competitive edge

. . . this could affect your future growth and profit prospects The International Technology Group (ITG), established in 1983, is an independent research and management consulting firm specializing in information technology (IT) investment strategy, cost/ benefit metrics, infrastructure studies, deployment tactics, business alignment and financial analysis.

ITG was an early innovator and pioneer in developing total cost of ownership (TCO) and return on investment (ROI) processes and methodologies. In 2004, the firm received a Decade of Education Award from the Information Technology Financial Management Association (ITFMA), the leading professional association dedicated to education and advancement of financial management practices in end-user IT organizations.

The firm has undertaken more than 100 major consulting projects, released approximately 160 management reports and white papers, and delivered nearly 1,800 briefs and presentations to individual clients, user groups, industry conferences and seminars throughout the world.

Client services are designed to provide factual data and reliable documentation to assist in the decision-making process. Information provided establishes the basis for developing tactical and strategic plans. Important developments are analyzed and practical guidance is offered on the most effective ways to respond to changes that may impact or shape complex IT deployment agendas.

A broad range of services is offered, furnishing clients with the information necessary to complement their internal capabilities and resources. Customized client programs involve various combinations of the following deliverables:

Status Reports In-depth studies of important issues

Management Briefs Detailed analysis of significant developments

Management Briefings Periodic interactive meetings with management

Executive Presentations Scheduled strategic presentations for decision-makers

Email Communications Timely replies to informational requests

Telephone Consultation Immediate response to informational needs

Clients include a cross section of IT end users in the private and public sectors representing multinational corporations, industrial companies, financial institutions, service organizations, educational institutions, federal and state government agencies as well as IT system suppliers, software vendors and service firms. Federal government clients have included agencies within the Department of Defense (e.g. DISA), Department of Transportation (e.g. FAA) and Department of Treasury (e.g. US Mint).

International Technology Group 4546 El Camino Real, Suite 230

Los Altos, California 94022-1069 Telephone: (650) 949-8410 Facsimile: (650) 949-8415 Email: [email protected]

ITG