Why upgrade your hardware when migrating to SAP ERP 6.0?  Because it makes simple, practical, business sense that is all.  SAP has identified several key reasons why customers are concerned about migration and several among them are as follows:

·         Cost, Cost, Cost

o   HW infrastructure cost is highlighted as one of the key barriers of migration

·         Business Justification

o   Is there a compelling business reason to upgrade the hardware?

·         Additional risk of business disruption

o   Migration of ERP environment is complex enough…how much more risk is there when upgrading your hardware?

From a cost perspective, the perception that hardware is a barrier to migration can be easily overcome.  Based on research, the hardware cost as a percentage of the overall migration cost is only about 7%.  That means 93% of the cost is in licensing, consulting, etc, etc.  HW costs are only the “tip of the iceberg” and the real $ investment lies elsewhere in the equation.

Is there a compelling business reason to upgrade your hardware? Well…frankly, it does not make sense not to do it.   One, we showed above that the hardware investment is minimal compared to SW licensing, consulting, service, etc.  Two, the hardware requirements of ERP 6.0 are significantly higher than previous versions. ERP 6.0 requires up to 2.5x more CPU performance, 2.5x more memory and 1.5x more I/O!  You will need the increased performance and scalability that Intel provides in our microprocessors.  While the ERP performance requirements have increased 2.5x, Intel performance with SAP has increased 10X!  Oh, btw…energy efficiency does matter and in your new ERP environment you will be able to consolidate servers and save on power and cooling costs.  TCO will be significantly reduced and from hardware investment standpoint, you are likely going to recover the cost of the servers in a very reasonable timeframe.

From my discussions with the IT community, their major concern and number one focus area is to prevent business disruption and downtime.  This costs companies real and significant money.  The fact is that an ERP migration is a complex enough project managing the strategic, functional and technical portions.  Adding a server infrastructure change increases fundamental risk.  But, the key here is that it is done often and done successfully.  Intel IT has published several whitepapers on the subject and communicated “Best Known Methods” to minimize that risk.    A quick summary is inserted here:

Challenge:

•         Convert Intel’s Worldwide Warehouse Management Software

•         Upgrade from SAP* ERP version 4.7 to 6.0, change the DBMS, and perform a Unicode* conversion as well as a hardware upgrade

•         Minimize downtime

Benefit to Intel IT:

•         SAP ERP 6.0 improves Intel supportability

•         Increases ease of integration to SAP NetWeaver* 7.1 Suite

•         Provides access to Enhancement Packs and Enterprise Services

•         Intel^® Itanium^®-based servers provide access to 128 GB of memory for database and SAP operations and significantly increased performance from true 64-bit processing

Key Results:

•         Reduced downtime of upgrade by 50% by using Intel Architecture

In summary,  upgrading your server infrastructure when migrating your ERP environment is a very, very complex task, but form a business perspective, it should be fairly easy to see the true benefits from combining the ERP migration and hardware upgrade at the same time.

You’ve seen it on the front pages of the papers lately.  The program that offers consumers incentives to trade in older used cars for more fuel-efficient new cars is pushing auto sales into overdrive.  The $1B in govt. funding for it was burned through in less than a week. The U.S. House of Representatives rushed through an additional $2B in emergency funds just to keep the program going, but will need Senate approval if it’s going to extend beyond Tuesday August 4^th. My guess is to make a continuation of the program palatable to the U.S. taxpayer, the incentive will need to be cut (from $4500 for a new fuel-efficient car to somewhere in the $1-2k range) but it’s great to seen people buying cars and stimulating part of the economy – while getting older fuel-inefficient cars off the roads.

I saw an interesting article talking about whether a similar program for servers would work…and though I think it’s a creative idea, I’ll argue that Intel and our OEM partners have been offering “Cash for Clunkers” for quite some time now – without any U.S. taxpayer help.  How? Through promoting the benefits of server refresh, a strategy that is proving to be one of the most beneficial investments to IT and business. Using the Xeon ROI Estimator I spent 2-3 minutes modeling potential savings by comparing 4-year old 2P Intel Xeon based servers to new 2P Intel Xeon 5500 based servers – and this is what I found:

An investment in one Intel Xeon 5500 based server (~$8.5k including purchase price, migration cost, and software validation) enables up to 10x performance per server, a 10:1 server consolidation opportunity vs. 10 older servers purchased 4 years ago that as an IT manager I can now get rid of.  So where’s the cash for the clunkers? Well, I would save over $4k a year in energy costs and over $11k a year in server / software maintenance costs by cutting out the old and putting in the new.  The 4-year total savings is about $38k, with a break even period of about 9 months. Not bad…and that doesn’t even take into consideration software licensing costs that I probably can save by cutting down the server count. Try modeling this yourself and check out the new PowerPoint report that you can generate from it – really explains the benefits in a way that the finance and facilities folks will find useful.

I also found this link that explains why Intel IT decided to move ahead with server refresh in 2009 after current economic conditions forced Intel to re-evaluate the strategy. Analysis found that delaying server refresh for a year would increase costs by USD 19 million.

And a refresh strategy also applies to the bigger 4 Socket and above servers as well, as documented in this server refresh brief. 

Server Refresh is a strategic investment for IT – the cash for clunkers program that keeps on giving.

bryce

Running multiple Unix environments across a range of locations adds increased complexity and cost to the IT environment. I came across an interesting case study and wanted to highlight some of the key findings

YPF SAis the largest company in Argentina operating in the Oil and Gas industry. The company has 29 gas plants around Argentina running different Unix environments such as HP-UX, AIX and Solaris.

YPF SA consolidated their SAP ERP and Oracle DB environment from multiple Unix environments to Red Hat Enterprise Linux 5 with integrated virtualization running on Intel Xeon based platforms from IBM System X

Some of the key findings to highlight

• Key requirement from Unix Administration Team that "migrating from old RISC/Unix and proprietary servers to open and flexible platforms would pose no risk to the reliability, availability and performance of the systems"
• Positive impact on cost and performance; Lowered costs, simplified management and increased compatibility
• Reduction in costs especially when compared to license costs of RISC based platforms
• Increased performance and availability drove decision to scale with RHEL and Xeon
• Ability to leverage Redhat integrated virtualization. Free up internal hardware and technical resources for other projects

I guess the combination of Redhat and Intel deliver the business results that customers are seeking. What do you think?

The debate on how to best increase system capacity to accommodate growing applications has raged on for years; “scale up” with more CPU, memory, and I/O, or “scale out” with loosely connected systems.    Scaling out by adding networked systems to increase capacity has been a good economical solution for many IT managers because it allows them to grow by using less expensive, industry standard building blocks.  However, there are some notable exceptions to this line of thought.  One is that the class of applications that require shared memory and large database support are much better suited to run on a single, expandable system that scales up.  These are typically transaction processing, business intelligence and ERP solutions.   Until now, IT managers running applications that require scale-up systems larger than 4 or 8 CPUs have had limited platform choices and most were proprietary and expensive RISC-based servers.

The other problem with the scale out approach is the people, facilities, software and overhead costs and complexity of managing very large numbers of servers, which can grow to a point where the costs outweigh the performance and system cost benefits.  The industry solution to achieving better ROI has been to consolidate multiple scale-out servers onto single industry standard scale-up servers with virtualization solutions.  This is a good solution, but is limited by the number of application loads the IT manager feels comfortable placing on a single server, given the need to maintain peak performance and availability for each application.

Well, it looks like the scale-up, scale-out debate is about to take another turn.  In the server product update Intel gave on May 26th, they talked about new levels of system scalability and choice supported by the upcoming Nehalem-EX processor.  This processor will support systems that scale up to 8 sockets natively (shared memory, without any additional silicon), and up to 16 sockets and higher with node controllers from system manufactures that allow single systems to share memory beyond 8 sockets.   So far there are over 15 different designs from 8 OEMs that offer 8 socket or higher scalability.  But of course, for the class of application where scaling is important, socket count doesn’t tell the whole story of what’s needed for scalable performance.  Thread support, key for transaction processing and virtualization, scales at the rate of 16 threads per socket with 8 cores and Hyper Threading (2 threads per core).  That would be 128 threads for an 8-socket system, and 256 threads for 16 sockets.   And in order to keep those threads fed with data close to the CPU, each processor supports up to 24 MB of shared cache (1.5X current generation Xeon), and an impressive 16 memory slots per socket or 128 DIMMs on an 8-socket system.  In addition, the Scalable Memory Interconnect gives these systems 9 times the memory bandwidth of today’s top Xeon processor.  Finally, four QuickPath interconnect links per socket allow for high-bandwidth sharing of data across the system.

So the net of it is that the industry is going to see a broad selection of highly scalable, next-generation servers that significantly extend the economic advantage of industry standard scale-up solutions for business-critical, large database, and high-end virtualization/consolidation deployments.     I would expect these systems to give IT managers a very cost-effective alternative to the much more expensive and proprietary RISC-based servers they use today.

What are your thoughts?  Mike

Related Topics:

• NHM-EX Press Fact Sheet
• NHM-EX May 26th Press Briefing Video – condensed version
• IBM 8Socket Demo Video
• NHM-EX--A New Standard

Sure, Intel® Xeon® 5500 Series Processors represent a quantum leap forward in terms of both performance and energy efficiency. That has been proven in a number of test results and reviews.  But for your back-end data demanding enterprise app deployments, large scale server consolidation or virtualization of business critical applications, Intel® Xeon 7400 series processors offer outstanding performance and performance per watt in 4-socket servers. So, which platform do you choose, especially when this decision is likely going to be the key determining factor for capital savings, efficiency and TCO for your datacenter infrastructure? Well, you’re read a lot about Xeon 5500 series Nehalem servers over the last few weeks.  Let me share with you some reasons to consider a Xeon 7400 series 4-socket server when you are presented with the choice between Intel’s two best of breed products for virtualization.

4 Socket and above servers (Xeon 7400) are purpose built – just like a large truck: They’re purpose built for your most data demanding enterprise applications like database and ERP, and for large scale server consolidation using virtualization. Large Trucks are also purpose built.  They’re purpose built for hauling large loads over long distances.   Now, you don’t buy a large truck to commute to work in.  You also don’t take your everyday commuter and attempt to haul large loads with it, because if you did you would be significantly undersized (you’ve all seen those cars on the road with rear tires about ready to pop under the weight of a palette of heavy goods tied on top). 

More Resources Matter for 4 Socket MP Workloads:
The apps/workloads listed above benefit from the expanded feature set associated with 4 Socket Xeon 7400 based servers: more processors (4 vs. 2), more cores (24 vs. 8), more memory (32 dimms vs. 18 dimms), more I/O capacity (7 slots vs. 4) and larger cache (16MB vs. 8MB).  These features and what they enable are why MP Server buying patterns have remained stable with IT for the last 5 years and will continue to be stable for the foreseeable future according to IDC. 

But in today’s economy there may be MP customers out there that will want to push the envelope and attempt to deploy lesser expensive 2S systems for traditional 4S solutions. Would doing so pencil out from a TCO perspective? Let’s take a look at two Virtualization usage examples and find out.

Large Scale Server Consolidation: Where almost 2x the memory matters.

In this scenario, IT Manager is dealing with numerous corporate acquisitions across the country prior to the economic downturn, with servers that now need to be consolidated to cut costs quickly.  Goal is to convert 1000 older underutilized 2S servers.  He (she) converts these to 1000 VMs and transfers them electronically to the central Data Center.   He determines that these infrastructure apps when consolidated generally run into memory constraints before they run into processor constraints, so for his candidate solutions he compares a 4 Socket Server with Xeon X7460 processors vs. a new 2 Socket server with Xeon X5570 processors.   He fully loads both systems with 4GB dimms (128GB on 4S vs. 72GB on 2S), and assigns 4GBs memory for each VM deployed (enabling 32VMs per server resulting in 31 new 4S servers vs. 18 VMs per server resulting in 56 new 2S Servers.)

Now, he only propagates the 4S Solution with 2 Xeon 7400 Processors, which allows the IT manager to still use all 128GB of memory on the 4S Servers while paying lower VMWare licensing costs.  Price these systems out on Dell, HP, IBM’s or Sun’s website, and the Xeon X7460 servers will be in the $15k-$20k range vs. the Xeon X5570 based servers will be in the $10k-$12k range (i.e. roughly 1.5x higher for 4S vs. 2S server).  Add VMWare license costs, power/cooling, LAN/SAN cabling, and system maintenance costs and you’ll see the 4S solutions offer a lower cost per VM.

Virtualizing Business Critical Workloads: Where 3x the Processor Cores matter.

In the previous example, we were looking to maximize consolidation ratios.  In this example, we’re looking to achieve predictable high performance for a business critical app.  Solutions like ERP that are put into a virtualized environment perform best when run without oversubscription, where you set the same number of virtual CPUs to equal the number of physical cores available on the platform.  This helps deliver relatively more predictable performance for all VMs and is the way that IT@Intel intends to deploy ERP in a virtualized environment as they begin to test this moving forward (read more about this in the new whitepaper).  In this example, we’ll convert ~100 non-production ERP instances (i.e. the instances used for QA, Dev, and Production break fix).  We’ll assign 2 virtual CPUs and 8GB memory for each instance.  The four-socket Xeon 7400 processor based systems (with 96GB memory) will have a total of 24 cores and will have a list price of about $25k.  This allows us to run 12 Virtual Machines without oversubscription on the MP Servers and enables 100 ERP instances to be consolidated down to about 8 MP (4 Socket) servers.  Since the Xeon 5500 based Servers just have 8-cores, the IT manager decides to avoid oversubscription and deploys 4 virtual machines – consolidating down to 25 DP (2 Socket) servers with 32GB Memory and a list price of about $8k per server.  Include the costs of the hardware, VMware ESX license costs, power/cooling, cabling, and Server maintenance – the MP (4 Socket) solution here would also offer a lower cost/vm than the Xeon 5500 based DP (2 Socket) solution due to having 3x the processor cores on 4 Socket.

When you are deploying your most data demanding enterprise applications and implementing large scale server consolidation, Xeon 7400 based servers represent a very intelligent choice. 

Let me know what you think.

bryce

With the introduction of the Intel Xeon processor 5500 series last month, I wrote a blog that discussed that server refresh was an intelligent investment in that it could deliver a rapid payback on investment. For the past few years, I have been working to understand the costs and benefits of server replacement and there are a few conclusions I can draw.

1)      Server Refresh is not new concept.  This approach has existed for decades.  People replace technology as it ages because new software and new technologies enable better business capabilities and as technology ages, the warranty expires and incidence of failure increases. How many of you still have your first mp3 player?

2)      ROI and Refresh Vary. The rate of refresh is a balance of the investment required (purchase, install, removal, validation, etc) and the savings achieved (operational costs, cost avoidance, employee productivity) balanced with the business opportunities available to you (business growth or new business markets, cost of capital, revenue generating investments)

3)      One Size Does not fit all.  Every business looks at financials and opportunities for their business a little differently and calculates their costs and savings differently.

So a few months ago, I embarked with some of my peers, with Intel IT, and industry leading ROI and TCO consultant Alinean, to apply what I have been learning and build an interactive tool to help you model your savings opportunity for server refresh and replacement. 

We identified and were able to model eleven cost and savings categories (both pluses and minuses) in the Server Refresh ROI calculation and make these cost category assumptions able to be included, excluded or modified by you.  You can model and view scenario output real time and print/email reports to share with others.

I invite you to learn more about the tool with this informal how-to-use guide , or better yet, use the tool and estimate how much you could save replacing old servers with new.  Try the new Intel® Xeon® processor-based Server Refresh Savings Estimator today.

You can provide feedback through the tool’s registration process or by responding directly on this blog. I look forward to hearing from you either way.

Thanks, Chris

In 1965, Intel co-founder Gordon Moore made a prediction, popularly known as Moore's Law, stating that the number of transistors on a chip will double about every two years. Intel has kept that pace for nearly 40 years. For IT, this translates into a roadmap that enables IT to buy new servers that cost roughly the same as the previous server but performs so much better. Compare Intel’s 4 Socket MP server performance introduced in 2006 (Intel Xeon processor 7000 series) to today’s server introduced in 2008 (Intel Xeon 7400): 3x more performance throughput as measured by SPECint*_rate_base 2000*, 2.4x more ERP users as measured by SAP-SD* and 2x more database transactions as measured by TPC-C*.

Now, introduce a global economic downturn into the mix and suddenly IT is forced to cut costs and projects (i.e. delay or cancel upgrades and non-revenue generating projects). New articles start popping up from magazines like the Economist that take Moore’s Law and propose flipping it on it’s ear: instead of products providing more performance at roughly the same price, provide products that offer the same performance as IT is already experiencing, but now at a lower price. Call it “inverting Moore’s law” where IT takes the dividend it provides in dollars vs. extra performance.

So here’s something to think about: You can also “invert” Moore’s Law by making new targeted IT investments today that offer attractive payback scenarios tomorrow - giving you similar performance but at a much lower cost. With mortgage rates dropping, you may have already benefited from a rapid payback in your personal life (i.e. I recently refinanced a house down from 7% to 5.25% 30-year fixed rate that I had continuously made additional principle payments for. The ~$5k up front investment (i.e. closing costs) will be “paid back” to me after 5 months due to monthly mortgage payment savings.

Here is a server refresh example that explains how you can also get an attractive payback for your IT department.

Oracle Database Refresh: Let’s next look at a hypothetical example of an IT department running current Oracle Database Enterprise Edition on 12 servers purchased in early 2006 (dual-core Intel Xeon 7041 based servers introduced in 2005) and assess the total cost of ownership difference in moving to new servers.  We’ll assume the IT manager is paying per processor licensing fees for Oracle Database. We’ll compare the old server equipment to new 4-core Xeon 7440 based servers that offer up to ~3x more database performance (Xeon processor 7400 Series come in flavors of 6-core and 4-core versions).  This should enable consolidation ratios of 3:1, enabling the IT manager to reduce from 12 servers to 4 new servers. 

First the new investment: 4 New Xeon 7400 based servers at roughly $20k each = $80k.  Add another $5k for Network, Server Maintenance and Install Costs.  Remove ~$2k in tax implications associated with the expense in year 0.  Total investment ~$83k. 

Next, let’s look at the savings: The IT Manager is paying $41.8k yearly on Oracle maintenance/support costs x 12 dual-core MP servers today, that is $501k.  The 4 new quad-core servers will have larger Oracle database maintenance/support costs because of the core count ($83k x 4 servers = $334k) but this will still result in $167k SW savings each year (difference between $501k and $334k) which my calculations show about $669k savings over 4 years.  Moving from 12 to 4 servers also reduces about $72k in network, server maintenance, and utility (power/cooling) costs over 4 years as well. In addition to all of these costs savings over 4 years, my calculations show that the original investment of ~$83k has a payback of 9 months.

Targeted IT investments today can offer attractive payback scenarios and cost savings tomorrow - giving you similar performance but at a much lower cost.   Let me know what you think? 

We all know that IT is using virtualization on x86 servers to solve tough data center challenges (server sprawl, accelerating power and cooling costs, the need to extend life of current facilities, achieving high-availability and disaster recovery through live migration, etc.) 

But which x86 servers are they using? According to IDC’s q3’08 Server Virtualization tracker, 85% of all the x86 servers deployed in 2008 for virtualization were based on Intel® Xeon® processors. 

Ok, next question: Is there a benefit to going with scalable 4 Socket servers (Multi-processor) vs. 2 socket servers (Dual-Processor)?  It’s a religious argument really, but as IT budgets continue to tighten, scalable 4 Socket servers offer more ‘capabilities’ (i.e. processors, memory, I/O ports and reliability features) that enable higher consolidation ratios. 

So I thought I would write about 5 specific scenarios where you should see a benefit to scalable 4 Socket (MP) servers over 2 Socket newest (DP).  Tell us if you agree or disagree.

1. Higher Consolidation Ratios for Memory-Constrained Apps

Do you have a bunch of apps that you need to keep running but at the same time face tremendous pressure to address the challenges listed above?  A key advantage of scalable servers is that they can be configured with more memory than smaller 2S servers, typically 2x-4x more.  Often times, especially with multi-core processors, virtual machines will run into memory constraints before they run into processor constraints.  A 2x-4x memory capacity advantage can translate into 2x-4x the VMs.  Scalable servers also tend to use available memory more efficiently, since code and data can be stored once and shared among multiple virtual machines.  Solvay Pharmaceuticals, for example, intends to run with consolidation ratios as high as 25:1 on 4 Socket Xeon servers. 

2. Performance and Reliability for Business-Critical Workloads

Intel’s launch last September of the Xeon 7400 processor (6-cores, 16mb shared L3 cache) brings 24 processing cores and up to 256gb memory (32 dimm slots x 8gb dimms) to a 4 Socket Server environment.   This provides a lot of resources for demanding applications and unexpected workload spikes.  Tests within Intel’s IT department have shown that 4-socket servers show much less variation in throughput than comparable 2-socket servers as virtualized workloads are increased. 

3. Faster and More Cost-Effective Test and Development

Development teams can be demanding.  The faster IT can provision testing environments for the developers the better.  Scalable servers offer more headroom to deploy additional dev environments when needed, without waiting for new physical servers to be provisioned. Scalable servers can also support a broader range of applications, including enterprise applications that may require the processor, memory and I/O resources of a large, multi-processor system.  Using the same Solvay Pharmaceuticals example listed above, they were able to deploy new apps in 10 min vs. 1 week prior to deploying virtualization on Xeon based servers.

4. Larger and More Robust Flexible Resource Pools

With VMware Virtual Infrastructure, applications can be migrated without downtime among all the servers in a resource pool, which can include up to 32 physical hosts (in a VMware HA* or VMware DRS* cluster).  Using larger, scalable servers would simply expand the capacity of those resource pools due to the additional memory, processors, I/O, etc. 

5. Better Utilization of Limited Data Center Resources

Many data centers are operating at or near the limit of their power, cooling and networking capacity. By using larger, scalable servers to increase consolidation ratios, IT can reduce power and cooling requirements and share local area network (LAN) and storage area network (SAN) ports more efficiently – all of which can help defer the high cost of new data center construction. 

Let us know what you think…