The current economic environment is unprecedented in our lifetime and is having multiple impacts on Enterprise decision making. IT spending is under severe scrutiny with IT budget reductions forecasted throughout most Enterprises in ’09. Even with reduced budgets, IT needs to continue to improve business productivity and competitiveness. So what can you do to manage all these conflicting conditions?
Maybe this type of environment represents an opportunity to make some changes with respect to your IT Policy. Could this be a good time to simplify and standardize your IT environment by looking at a broader range of choices that are now available. These choices may not have existed in the past due to some of your decision criteria not being meet for your hardware or software needs. Hardware and software evolve at a rapid pace, and the capabilities to meet your needs are significantly different today than what was available 5-7 years ago when you made previous decisions.
Equipment nearing the end of depreciation cycles or lease contracts offer another opportunity to look at the cost and performance of your existing architectures Vs other architectures that are available today. In my previous I shared some thoughts on performance and pricing of RISC systems Vs x86 based platforms. There are significant savings that can be made be choosing x86 hardware without trading off on your performance needs. Selecting x86 hardware could enable you to execute your IT refresh and replacement strategy in a reduced Capex budget environment. Sometimes it seems that offsetting a purchase may be a prudent thing to do, but at some point you will have to replace these systems to meet business productivity requirements. In the meantime you will have to spend incremental budget paying extra $’s for maintenance and support for systems that you had planned to replace and you may also not meet the demands placed on you to support your business needs. I also read recently that under the proposed US Stimulus package there may be some provisions for accelerating depreciation on new equipment purchases. This could be another factor to consider in terms of which option will cost you most in the long-run.
One other thought I had was the ability to re-allocate $’s within your overall TCO to spend on other aspects of your solution needs. If you could save money on the hardware cost would it free up $’s for you to spend on the overall solution?. For example could you afford to pay the software license costs and support more users for your ERP environment.
Consolidating older generation RISC based platforms to current x86 based platforms could be another way to offset some of the associated costs associated with maintaining and supporting your RISC environment. I read a paper recently published by Dell where they talked about the performance difference between V440 SPARC Servers and todays R900 systems. They talked about the R900m being 14 times as fast as V440. This led me to conclude that I could consolidate a distributed workload from a number of older V440s and run that workload on one system. This sounds like a pretty good deal to me as I can save some space in my datacenter, save some energy costs, probably get some savings on software license and support costs.
Another factor to consider is the whole issue of payback. In the current environment everyone is being asked to justify the payback on their investment to be 12 months or less. What if I said that you could get a 9 month payback on your investment in a new hardware platform purely on the basis of savings from power & cooling savings and lower OS maintenance costs. Would these types of savings be enough to justify your investment and consolidating multiple legacy RISC servers to a current x86 platform?. Well that type of payback is attainable, and there are other savings like software license costs, administrator and operator costs that are not really included in the calculations.
Ok, so the counterside to my argument is that it is hard to move a workload from RISC to x86. The savings I get from moving will not be offset by the money I spend to move. It is a fair argument, but there are Customers who have done the transition and saved some significant money by doing so. Avis in Europe are one example that comes to mind where they talk about reduce their TCO by 50% moving from RISC to x86 platform
One of the other comments I often hear relates to it being technically hard to move my solution if it is running on UNIX/RISC to x86 offering. I agree you are moving move one architecture to another and there are some challenges to do so, but there are resources out there to help you. Principled Technologies wrote two reports recently that discussed how you could move your Oracle database to Solaris or Linux running on Xeon. Don’t worry, these were not marketing papers, they actually did this migration in a real lab environment and documented the technical ‘how to’.
Ok, so these are some of my thoughts, let me know what you think?.
