Consolidation Cost Justification

© 2007 Avnet Inc. All rights reserved.

Meeting the Challenges of IT Optimization… Using Financial Justification to “Jump Start” a Server or

Desktop Consolidation project

John Dodge HayesManager Consolidation Solutions

1/17/08



Importance of a Financial Justification

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1 - NotImportant

3 5 - VeryImportant

% of Responses

Q: Using a scale of 1 to 5, with 1 being “not at all important” and 5 being “very important”, how important is financial justification, such as ROI, for securing internal funding for an IT project at your company?


Consolidation Impact Assessment Services

• Unix (HP-UX, Solaris, VMS, Tru64, AIX) Server Consolidation Assessment –to- Integrity (HP-UX or Linux)

• Windows and Linux on x86 –to- VMware VI3

• Desktop Virtualization Assessment –to- VDI or HP PC Blade environment


Assessment Strategy

• Analyze both the Technical and Financial Impact of Server and Storage consolidation

• Use a tool called CapacityPlanner from VMware

– Non-disruptively captures hardware and software inventory from current environment

– Measure actual utilization of servers and records the peak workloads

– Uses peak workloads to create consolidation scenarios

• Model Financial Impact using Brigham-Gapenski methodology

– Collects financial assumptions at start of project via Finance Questionnaire

– Total Cost of Ownership (TCO) analysis of selected IT environment

– Compares baseline to the costs of a consolidated environment

– Provides a detailed Return On Investment analysis


VMware Capacity Planner

Data Upload

Data Analyzer

HTTPS

InformationWarehouse

Infrastructure Assessments

Capacity Planning

Server Consolidation

Capacity Planner Dashboard

Discovery Inventory

Performance Data Synch

Data ManagerClient IT Environment

DataCollector

Agent-less Data Collection

ClientSite

HostedSecure Site

Web

Industry Data


Hardware

Platform B

CPU

0 – 1

GH

z

CPU

1 – 1

GH

z

Hardware

Platform A

CPU

0 –

80

0M

Hz

CPU

1 –

80

0M

Hz

Virtualization Modeling

Capacity

Planner

Hardware

Platform C

CPU

0 – 2

GH

z

CPU

1 – 2

GH

z

Application C

80% Utilizatio

nApplicati

on B80%

Utilization

App. A80%

Utilization

Target Platform

CPU

0 – 2

.4G

Hz

CPU

1 – 2

.4G

Hz

Inventory gathered using Collector

Utilization gathered using Collector



Capacity

Planner

Hardware

Platform A

CPU

0 –

80

0M

Hz

CPU

1 –

80

0M

Hz

Hardware

Platform B

CPU

0 – 1

GH

z

CPU

1 – 1

GH

z

Hardware

Platform C

CPU

0 – 2

GH

z

CPU

1 – 2

GH

z

Application C

80% Utilizatio

nApplicat

ion B80%

Utilization

App. A80%

Utilization

Target Platform

CPU

0 – 2

.4G

Hz

CPU

1 – 2

.4G

Hz

App. A20%

Utilization

Virtualization



Capacity

Planner

Hardware

Platform A

CPU

0 –

80

0M

Hz

CPU

1 –

80

0M

Hz

Hardware

Platform B

CPU

0 – 1

GH

z

CPU

1 – 1

GH

z

Hardware

Platform C

CPU

0 – 2

GH

z

CPU

1 – 2

GH

z

Application C

80% Utilizatio

nApplicati

on B80%

Utilization

Target Platform

CPU

0 – 2

.4G

Hz

CPU

1 – 2

.4G

Hz

App. A20%

Utilization

Virtualization

Application B30%

Utilization

Virtualization



Capacity Planner

Hardware

Platform A

CPU

0 –

80

0M

Hz

CPU

1 –

80

0M

Hz

Hardware

Platform B

CPU

0 – 1

GH

z

CPU

1 – 1

GH

z

Hardware

Platform C

CPU

0 – 2

GH

z

CPU

1 – 2

GH

z

Application C

80% Utilizatio

n

Target Platform

CPU

0 – 2

.4G

Hz

CPU

1 – 2

.4G

Hz

App. A20%

Utilization

Virtualization

Application B

30% Utilization

Virtualization

Application C

50% Utilizatio

n

Virtualization


HP-UX Consolidation Case Study


Sport Vehicle Manufacturer

• Client had production environment with 49x HP-UX servers – rp34xx, L2000, L3000

• Primary application SAP ERP on Oracle and some MRP on Informix

• Running into facility issues – power and rackspace

• Need to build more robust DR capability


Production – Load Factor/System

Load factors above 1.5 result in severely degraded system response.Systems reporting normalized load factors > 3 graphed at 3.0


Load Factor Definition

• For a quick example let’s consider the output below.

Load average of a system can be found by running top

load averages: 2.43, 2.96, 3.41

• One minute load average is 2.43

• Five minute is 2.96

• Fifteen minute load average is 3.41

• Here are some conclusions we can draw from this:


Load Factor Definition - continued

On average, over the past one minute there have been 2.43 processes running or waiting for a resource Overall the load is on a down-trend since the average number of processes running or waiting in the past minute (2.43) is lower than the average running or waiting over the past 5 minutes (2.96) and 15 minutes (3.41) This system is busy, but we cannot conclude how busy solely from load averages. It is important here to mention that the load average does not take into account the number of processes. Another critical detail is that processes could be waiting for any number of things including CPU, disk, or network.

So what we do know is that a system that has a load average significantly higher than the number of CPUs is probably pretty busy, or bogged down by some bottleneck. Conversely a system which has a load average significantly lower than the number of CPUs is probably doing just fine.

Posted on Monday, March 13, 2006 by Jon Emmons


Defining Groups and Applying Loads

These potential consolidation scenarios were developed based on the following assumptions:

•Each CPU is set at a peak load of 1.5 per cpu to get an estimate of required TPMC – TPMC charts received from PQRT data from HP

•Memory is at 80% of the recorded peak memory usage for the servers

•All servers are 16 Cores/2Cell and are assumed to support two nPar’s and up to 8 vPars.

•Each server has 16 x 2gb FC ports and 16 x 1000TX Network cards

•All servers are considered as vPar candidates. No application layering has been considered at this time


Consolidation to rp7420 servers

6:176134249All Servers to rp7420

Consolidation Ratio

New Servers

Not Consolidated

Servers OutConsolidated

Servers In

6:176134249All Servers to rp7420

Consolidation Ratio

New Servers

Not Consolidated

Servers OutConsolidated

Servers In


Suspect servers – Excessive load

4889403759290001,08925.294096800 MHz19000/800/rp3410pdomsdb1

39365090245390097121.9181901 GHz29000/800/rp3440pdscmdb1

248615542811568005,72514.27491501 GHz69000/800/rp4440pdwcsdb1

232309202815390015712.93163821 GHz29000/800/rp3440pdsapas4

2307838051908001,74915.2581901 GHz49000/800/rp3440prdgf1

1466428271908001,5739.6981901 GHz49000/800/rp3440prdybc1

tpmc REC

Mem Rec

tpmcFree Mem

Load Peak

MemorySpeedCore Count

ModelSys Name

4889403759290001,08925.294096800 MHz19000/800/rp3410pdomsdb1

39365090245390097121.9181901 GHz29000/800/rp3440pdscmdb1

248615542811568005,72514.27491501 GHz69000/800/rp4440pdwcsdb1

232309202815390015712.93163821 GHz29000/800/rp3440pdsapas4

2307838051908001,74915.2581901 GHz49000/800/rp3440prdgf1

1466428271908001,5739.6981901 GHz49000/800/rp3440prdybc1

tpmc REC

Mem Rec

tpmcFree Mem

Load Peak

MemorySpeedCore Count

ModelSys Name


Workload mappings - Example


x86-Windows Consolidation Case Study


Capacity Planner Windows Servers - What we’re seeing

• Rarely find sites with over 10% average prime time utilization … some sites lower than 5%

• About 40 servers per System Admin

• Main cost drivers are Power, System Admin, Maintenance, and Growth/Refresh

• Seeing 3 year TCO’s of around $1.5 million per 100 servers

• Typical consolidation of 7:1 to 10:1, goal is usually at least 10:1

• Typical IT Cost Reduction of 25%, < 18 month payback


High-Level View: The Dashboard


Peak Load and Peak Hour

Server CPUs MhzBusiness Hours Peak Load Peak Hour

aegis 2 448 6.86 21.34 10

arcadia 2 702 2.82 20.29 18

atlantis 1 199 7.09 22.79 8

boris 1 1,396 2.45 3.49 0

cim7 2 996 2.35 35.39 21

cisdev 2 0 8.6 44.33 15

coil 2 901 19.87 47.33 18

doc1 1 200 7.31 19.19 21

docbeta 1 448 3.8 49.15 21

edmsdb1 4 701 9.99 16.38 15

edmsdb1t 4 701 0.57 1.21 14

edmsdb2 4 701 2.88 5.17 2

edmsdb2t 4 701 1.3 5.08 2

edmsdc1 2 996 7.23 27.87 6

edmsdc1t 2 996 0.79 22.42 4


Created Scenarios – Windows

NameServers

InServers

OutServers Not

Consolidated

453 Dovercourt to Target DL385 2.6 GHz (4) 16GB VM 4 1 0

Misc to Target DL385 2.6 GHz (4) 16GB VM 12 2 1

Unknown to Target DL385 2.6 GHz (4) 16GB VM 3 1 0

St. Mary DL580 to Target BL480c 3.2 GHz (4) 16GB VM 19 6 2

St. Mary minus DL580 to Target BL460c 3.2 GHz (4) 16GB VM 75 8 2

St. Mary minus DL580 to Target DL585 2.6 GHz (8) 16GB VM 75 8 2

Taylor DL580 to Target BL480c 3.2 GHz (4) 16GB VM 13 4 1

Taylor minus DL580 to Target BL460c 3.2 GHz (4) 16GB VM 76 12 5

Taylor minus DL580 to Target DL585 2.6 GHz (8) 16GB VM 76 12 5

Waverley DL580 to Target BL480c 3.2 GHz (4) 16GB VM 4 1 0

Waverley minus DL580 to Target BL460c 3.2 GHz (4) 16GB VM 41 4 1

Waverley minus DL580 to Target DL585 2.6 GHz (8) 16GB VM 41 4 1


Scenario Results – St. Mary Group


Financial Assumptions

1. 314 Total Windows Servers from Dashboard

2. Net new physical server annual growth rate of 14.3%

3. Assume Five (5) year average useful life

4. Five year lifecycle for hardware with a refresh rate of 50% of 1/5 of the server base per year (10%)

5. Average Server replacement cost = $7,500

6. Six FTE for core Windows Servers Management, 75% utilized for server management at assumed $100,000 fully burdened cost

7. Assume IT budget assessed via five year straight line depreciation


Financial Assumptions - continued

1. 228 Windows Servers considered as Consolidation Candidates and placed in financial model

2. Average server age calculated from Ave server CPU MHz (2047) is 36.0 months

3. Using $1000/server/year as maintenance cost of servers over 36 months, assumes 50.0% of servers are over 36 months

4. Power/Cooling Costs, using calculated power, power infrastructure and AC costs based on 350 watts/server for existing servers and 600 watts/server for new at $0.04 per KWH

5. Assume no tax benefits

6. Requires a 36 month payback for project to be considered


Financial Findings

3 Year TCO Breakdown

Sys Admin Costs: $1,120,737 (~70 servers : 1 FTE ratio)

Break/Fix Maintenance: $342,046

Growth (Capital): $513,000 (~33 servers / year)

Refresh/Replace (Capital): $515,250 (~23 servers / year)

Power & Cooling: $471,600

TCO Baseline Summary – 228 Servers(St. Mary, Taylor, Waverley)

Current TCO = $2,433,660


Financial Findings

Three Year Payback Summary – 228 Servers(St. Mary, Taylor, Waverley)

Option

HW/SW Cost1

3 Year TCO2

IT Budget Reduction

Raw Savings

ROI (IRR%)

Payback(months)

BL460c 2W 16GB16 New8 Remaining


$1,018,562 $1,864,906 $568,754 $1,966,475 31.1 22.2

DL585 4W 16GB16 New8 Remaining


$1,422,270 $2,147,502 $286,158 $1,831,905 6.5 32.0

2Estimated implementation budget, $217,000

1Estimated storage capacity budget, $250,000



Financial Findings

Power, $364,861 , 19%

Sysadmin, $300,564 , 15%

Maintenance, $309,046 , 16%

Capital, $992,004 , 50%

Raw Savings Summary – BL460c/BL480c


Your part …


Desktop Virtualization Case Study


Virtual Desktop (VDI)


VDI Main Points

• Executive Summary: Virtual Desktop Infrastructure (VDI) – VDI simplifies desktop administrative and management tasks– Users access virtual desktops running in the data center– Technology supports both PCs and thin clients– Desktop security and data protection are centralized– Access can be easily extended to remote users

• Benefits of VDI– Efficient use of CPU and memory resources – Reduced desktop downtime and increased availability – Patches and upgrades performed in data center – New users can be up and running quickly – Data and applications reside in secure data centers– Centralized management reduces operational expenses


High-Level View: A Dashboard


Scenarios - Extrapolated

Scenario NameDesktops

InDesktops

ConsolidatedDesktops Not Consolidated

New Servers

Consolidation Ratios x:1

City Hall to BL465c-16GB 426 426 0 13 32.8City Hall to BL465c-24GB 426 426 0 10 42.6City Hall to BL465c-32GB 426 426 0 8 53.3City Hall to DL585-32GB 426 426 0 8 53.3S&J to BL465c-16GB 332 332 0 10 33.2S&J to BL465c-24GB 332 332 0 8 41.5S&J to BL465c-32GB 332 332 0 6 55.3S&J to DL585-32GB 332 332 0 6 55.3


Current Desktop Environment


TCO Detail


TCO Detail - continued


Financial Findings – VDI – City HallThree Year Payback Summary – 426 Desktops

OptionHW/SW Cost1

3 Year TCO2,3

IT Budget Reduction

Payback (months)

ROI (IRR%)

BL465c 16GB13 New

0 Remaining$417,836 $2,562,168 $663,555 17.5 54.6

BL465c 24GB10 New

0 Remaining$565,894 $2,705,496 $520,227 22.3 32.2

BL465c 32GB8 New

0 Remaining$549,716 $2,686,164 $539,559 21.7 34.4

DL585 32GB8 New

0 Remaining$510,104 $2,646,552 $579,171 20.4 39.7

2Estimated Implementation costs budget $91,294

1Estimated storage capacity budget $87,880 (4.16TB)


3Includes thin client phase in over three years, $255,174


Consolidation Steps

• Identify project– Work with your VAR to define scope

• Gather info for 2 page Project Request Form

• Submit to APS for SOW and pricing

• APS submits to HP for funding approval (2 week typical turnaround)

• Funding approved

• Delivery begins (1-2 weeks)

• Collect Data (4 weeks)

• Analyze and present results (1-2 weeks)


Thank You!

Consolidation Cost Justification

Technology

Transcript of Consolidation Cost Justification