There’s a video going around from one of Intel’s top external customers.  Before you see this (video linked below) I wanted to position this correctly.  I caught up with Mr. X at an undisclosed coffee shop and got his approval to share publicly the messages that we would have rather had him go out with. Those messages are as follows:

Mr. X’s 4 year old servers were a burden on his organization, he spent all of his budget on just maintenance, nothing left for innovation.

He looked at his old infrastructure and determined that replacing them with more powerful-energy efficient servers from Intel was a strategic investment.

The New intel Xeon 5500 based servers provided the opportunity for him to innovate again.  He claimed that these new Intel Xeon Processor 5500 (Nehalem-EP) are the best enabler of IT business value that he's seen in years.

They boosted energy efficiency, saved him big $ and extended his facility lifespan – now he doesn’t have to go build a new data center. 

He replaced his old servers in a 9:1 ratio (getting rid of 9 old and replacing with 1 new) that enabled him to cut operational expenditures by 90% …And that savings alone is paying for the investment in these new servers in just 8 months. 

By strategically investing in IT when his competitors hunkered down and cut spending – he is now positioned to grow faster and gain share as the economic upturn arrives.

Ok, now that I’ve had a chance to convey his real messages, you can check out this video.

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

Why Invest in IT … for Large Enterprises

In my blog titled top 10 reasons to buy in a recession  , I discussed generic reasons to invest.  For large enterprises with a large install base of servers (multiple data centers, row and rows or rooms and rooms of servers), you have the economies of scale on your side.  Most likely, about 40% of your existing servers use single-core processor technology and another estimated 40% based of dual-core processor (source IDC).  Running existing infrastructure on these slower servers is just plan inefficient compared to the new servers available on the new Intel Microarchitecture (Nehalem) – intel's 3^rd generation of quad-core processors for 2 socket servers.

Based on Intel estimates, replacing nine single-core based servers with one new xeon 5500 can yield up to 90% lower operating costs, delivering a payback on investment in  as short at 8 months (learn more here) … or … by upgrading single-core, dual-core or even the latest quad-core processors can yield performance enhancements that can boost productivity or open up new business opportunities. 

Even though this is day of introduction, there are four large companies today that have already identified the benefits of using these new processors.  See their results below

ð       Play saw roaming mobile transaction times reduce from 102 minutes to 44 minutes from last years quad-core processors and expects to be able to reduce the cost of running its data centre with these energy efficient servers.

ð       Capgemini tested a virtualization environment and sees ability to help their development team be more productive while strengthening customer offerings … as exhibited by a reduction in response time from 12.46 sec to 5.56 seconds compared to last years quad-core processors

ð       The Technical University of Munich saw processing speeds increase by 66% and experience 4x memory bandwidth for applications leading them and their customers to consider new projects and compute models for their research and business.

ð       Business & Decision saw the ability for 20:1 virtualization ratios with utilization levels at approximately 55%, providing the ability to improve customer service levels, productivity, reduce implementation costs by 50% and anticipates a ROI of < 1year. 

The bottom line is that these customers are moving forward with technology investment as a core strategy to boost their business and cut costs – helping them to emerge stronger and more competitive in their industry as economic conditions improve.

What could the Intel Xeon processor 5500 series based server do in your business?

Chris

In our previous post we noted that the state of the art power montoring in virtualized environments is much less advanced than power monitoring applied to physical systems.  There is a larger historical context, and economic implications in the planning and operation of data centers that make this problem worth exploring.

Let's look at a similar dynamic in a different context: In the region of the globe where I grew up, water used to be so inexpensive that residential use was not metered.  The water company would charge a fixed amount every month and that was it.  Hence, tenants in an apartment would never see a water bill.  The water bill was a predictable cost component in the total cost of the building and included in the rent.  Water was essentially an infinite resource and reflecting this fact, there were absolutely no incentives in the system for residents to reign in water use.

As the population increased, water became increasingly a more precious and expensive resource.  The water company started installing residential water meters, but bowing to tradition, landlords continued to pay the bills, which was still a very small portion of the overal operating costs.  Tenants still had no incentive to save water because they did not see the water bill.

Today there are very few regions in the world where water can be treated as an infinite resources.  The cost of water increased so much faster than other cost components to the point that landlords decided to expose this cost to tenants.  Hence the practice of tenants paying the specific consumption for the unit they occupy is common today.  Also, because this consumption is exposed at the individual unit level, the historical data can be used as the basis for the implementation of water conservation policies, for instance charging penalty rates for use beyond a certain threshold.

The use of power in the data center has been following a similar trajectory.  For many years the cost of power had been a noise level item in the cost of operating a data center.  It was practical to include the cost of electricity in the bill of the cost of the facilities.  Hence IT managers would never see the energy costs.  This situation is changing as we speak.  See for instance this recent article in Computerworld.

Recent Intel-based server platforms, such as the existing Bensley platform, and more recently, the Nehalem-EP platform to be introduced in March come with instrumented power supplies that allow the monitoring and control of power use at the individual server level.  This information allows compiling a historical record of actual power use that is much more accurate than the more traditional method of using derated nameplate power.

The historical information is useful for data center planning purposes by delivering a much tighter forecast, beneficial in two ways: by reducing the need to over-specify the power designed into the facility or by maximizing the amount of equipment that can be deployed for a fixed amount of power available.

From an operational perspective we can expect ever more aggressive implementations of power proportional computing in servers where we see large variations between power consumed at idle vs. power consumed at full load.  Ten years ago this variation used to be less than 10 percent.  Today 50 percent is not unusual.  Data center operators can expect wider swings in data center power demand.  Server power management technology provides the means to manage these swings, stay within a data center's power envelope, yet maintain existing service level agreements with customers.

There is still one more complication:  with the steep adoption of virtualization in the data center in the past two years starting with consolidation exercises, an increasing portion of business is being transacted using virtualized resources.  Under this new environment, using a physical host as the locus for billing power may not be sufficient anymore, especially in multi-tenant environments, where the cost centers for virtual machines running in a host may reside in different departments or even in different companies.

It is reasonable to expect that this mode of fine grained power management at the virtual machine level will take root in cloud computing and hosted environment where resources are typically deployed as virtualized resources.  Fine grained power monitoring and management makes sense in an environment where energy and carbon footpring is a major TCO component.  To the extent that energy costs are exposed to users along as the MIPS consumed, this information provides the checks and balances and the data to implement rational policies to manage energy consumption.

Based on the considerations above, we see a maturation process for power management practices in a given facility happening in three stages.

1. Stage 1: Undifferentiated, one bill for the whole facility.  Power hogs and energy efficient equipment are thrown in the same pile.  Metrics to weed out inefficient equipment are hard to come by.
2. Stage 2: Power monitoring at the physical host level implemented.  Exposes inefficient equipment.  Many installations are feeling the pain of increasing energy cost, but organizational inertia prevents passing costs to IT operations.  Power monitoring at this level may be too coarse grained, too little, too late for environments that are rapidly transitioning to virtualization with inadequate support for multi-tenancy.
3. Stage 3: Power monitoring encompasses virtualized environments.  This capability would align power monitoring with the unit of delivery of value to customers.

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 blog 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?.

The use models and benefits of Server Virtualization are as diverse as the number of poses in the art of Yoga.  Virtualization is boosting server utilization while creating more flexible use models that feature live application migration from server to server. 

Over the past year, I found myself constantly talking with IT professionals about how they are using virtualization and how it was transforming their business.  And despite a more challenging economic environment for business and IT on the horizon, several industry analysts continue to predict investment growth in server virtualization during 2009.  It is easy to understand why. 

The many customers I have talked with and the many of the case studies I’ve read articulate that virtualization is lowering TCO through CapEx avoidance (data center construction, staff hiring) and OpEx reductions (power/cooling, management and maintenance savings).  In addition, virtualization is improving time to service, simplifying management of server infrastructure, boosting server utilization, and accelerating ROI of new hardware investment.  Beyond these “foundational” usages, I also found a set of new flexible use models that IT was considering that are based on moving applications dynamically from server to server … real time. 

For Lesson 1 of a 3 part series on virtualization, I interviewed Sudip Chahal from Intel IT where he explained to me the variety of terms, buzz words and use models of virtualization that are delivering the benefits above.  

I invite you to view this short video (~5 min) and comment about how you are using or intending to use virtualization in your business.

Namasté

Chris