Reducing IT Operational Costs With IBM Power Systems Cloud Solutions

8/3/2019 Reducing IT Operational Costs With IBM Power Systems Cloud Solutions

http://slidepdf.com/reader/full/reducing-it-operational-costs-with-ibm-power-systems-cloud-solutions 1/20

Reducing IT Operational Costs with

IBM Power Systems Cloud Solutions

October 2010



2

Table of Contents Table of Contents............................................................................................................... 2

Executive Summary........................................................................................................... 3

The Challenge of IT Labor Costs....................................................................................... 4

Overview of Private Clouds on Power Systems .............................................................. 7

Virtualization Benefits of the Power Systems Cloud Solutions ..................................... 9

Standardization Benefits of the Power Systems Cloud Solutions ............................... 13

Automation Benefits of the Power Systems Cloud Solutions ...................................... 15

Putting It All Together .................................................................................................... 17

Summary .......................................................................................................................... 18

Acknowledgements......................................................................................................... 19



3

Executive Summary

Annual IT operational costs continue to increase, with labor commanding a larger and larger

share. For example, an IBM internal study of its own distributed infrastructure showed labor to

be over 60% of the total operational cost per year1

, while industry analysts estimate labor costscan be as high as 80% of overall data center costs2.

As a result, many customers are turning to private clouds, implementing such technologies as

virtualization and consolidation, standardized workloads, and automation by way of self-service

provisioning in an effort to reduce these costs. While only 12% of enterprises currently utilize

some of these techniques, this number is expected to rise to 50% by 20123. IBM Power Systems

cloud solutions utilize this three-pronged approach to significantly reduce IT labor costs in a

private cloud environment.

Quantifying the impact that private cloud technologies have on various aspects of labor,

however, has proven elusive, resulting in slower adoption rates. Customers want to know, for

example, just how much these cloud solutions will affect the labor required to set-up and

maintain both the physical as well as virtual infrastructure for a given deployment platform

before committing resources to their implementation.

This paper describes an approach to help answer this question. We first examined the challenge

of IT labor costs. We then introduced the key components of the Power Systems cloud solutions

and how each tier of the private cloud stack fits within the virtualization, standardization and

automation model. We proceeded to quantify the impact of virtualization by constructing a

labor model that calculated the total labor hours required to set-up and maintain the overall

infrastructure for both stand-alone x86 environments and virtualized Power Systems private

cloud environments. Using actual customer data, the model allowed us to calculate the

breakdown between the labor required for the physical and virtual infrastructure for a givennumber of workloads and specified time period. Next, we looked at the impact of

standardization. We adjusted the model with a “clone” factor to reflect the fact that many

companies implementing private clouds are using standardized workloads that can be easily

copied or cloned to other virtualized servers to reduce labor costs even further. Finally, we took

a look at automation by conducting a hands-on study to capture the time it took for an

administrator to manually deploy an application onto a single Power Server versus using Tivoli

Service Automation Manager in a Power Systems private cloud environment.

1 IBM Internal Consolidation Project

2 Source: Butler Group 2007 and http://www.itmanagement.com/blog/20070129/report-indicates-mainframe-adoption-continuing-to-grow/

3 Internal IBM cloud study 2009



4

Following this overall approach yielded the following observations:

• Private clouds built on IBM Power Systems servers and software, as well as Tivoli

integrated service management software can reduce IT labor hours by up to 96%,

translating to over $1 million savings over 5 years when compared with stand-alone

x86 servers

• The greater the consolidation you can achieve, the lower you can reduce total physical

server labor hours

• The more images you can standardize and clone, the lower you can reduce software

image labor hours

• The use of Tivoli Service Automation Manager can reduce labor hours for a unique

software image by up to 67% compared to manual deployment on an IBM Power

Systems server

The Challenge of IT Labor Costs

Continued business growth within an enterprise places ever-increasing demands on two key

components of its information technology (IT) infrastructure – servers and storage. The costs

associated with expanding and improving an IT infrastructure are typically divided into

acquisition and operational costs. Acquisition costs include the purchase price and maintenance

agreements for hardware and software. Operational costs include labor costs to deploy and

manage hardware and software, as well as facilities charges such as power and cooling. While it

is fairly straightforward for a business decision maker to compare the acquisition and facilities

charges among various infrastructure proposals, judging the merits of an IT solution in terms of

labor costs requires further analysis.

Labor costs accrue throughout the IT infrastructure provisioning lifecycle. They begin at the

procurement stage with planning and sizing. Once obtained, server assets must be configured,

starting at the physical level and continuing with virtualization software, operating systems,

middleware, applications, user access and security. While IT resources are in production, they

must be regularly monitored, maintained and repaired, if necessary. Lastly, when computing

resources no longer meet business requirements, they must be torn down and retired. Figure 1below illustrates the server and storage provisioning lifecycle and focuses on the labor cost

components:



5

Figure 1

When IBM examined its own distributed infrastructure, the study estimated that labor costs

comprise 60% of all operational costs per year4, while industry analysis suggests that labor

accounts for 80% of all datacenter costs5. For Power Systems environments, examples of labor

costs include:

• Planning for an upgrade to POWER7 processor-based hardware and estimating its effect

on application and operating system levels

• Installing new Power servers, connecting them to Hardware Management Consoles(HMCs) and upgrading firmware

• Configuring Virtual I/O Servers (VIOS’s) to enable virtualization and I/O sharing

• Transferring existing or creating new definitions for all virtual servers, or logical

partitions (LPARs)

• Provisioning storage for all virtual servers

• Installing the operating system (OS), middleware and applications, and configuring user

accounts and security

• Monitoring processor utilization of virtual servers across multiple physical servers, or

hosts

• Taking manual actions to move a virtual server away from an underperforming physical

host via Live Partition Mobility (LPM)

4 IBM Internal Consolidation Project

5 Source: Butler Group 2007 and http://www.itmanagement.com/blog/20070129/report-indicates-mainframe-adoption-continuing-to-grow/



6

To help reduce IT labor costs, IBM has developed an approach based on virtualization,

standardization and automation of the IT infrastructure, as depicted in Figure 2:

Figure 2

This paper will demonstrate how Power Systems cloud solutions use the three-pronged

approach above to reduce labor costs in the datacenter. The discussion will estimate the laborcost reduction from managing 100 workloads running in a Power Systems based cloud

environment when compared to managing 100 workloads running on individual physical servers,

over a 5-year period.



7

Overview of Private Clouds on Power Systems

Let us first examine the key components of the Power Systems cloud solutions and how each

one fits within the virtualization, standardization and automation approach, as shown in Figure

3:

Figure 3

A key starting point for a cloud computing environment on Power Systems is the high

performance and density offered by POWER7 processor-based hardware and enterprise-grade

storage, such as the IBM SAN Volume Controller, IBM System Storage DS5000, IBM System

Storage DS8000 Turbo and IBM XIV Storage Systems. Both servers and storage utilize built-invirtualization technologies. The PowerVM Enterprise Edition hypervisor improves return on

investment (ROI) and responsiveness to business changes with I/O sharing for disk and

networking; dynamic CPU, memory and I/O movement without workload downtime; CPU

assignment granularity down to 1/100th of a processor; and shared dedicated CPU capacity.

Additionally, with PowerVM clients can leverage the additional benefits of Live Partition

Mobility (LPM) for seamless hardware maintenance and migration, and Active Memory Sharing

(AMS) and Active Memory Expansion (AME) for maximizing resource utilization and



8

performance across all virtual servers on a system. Storage virtualization with SAN Volume

Controller enables consolidation and simplified management of heterogeneous disk subsystems,

while meeting the goals of tiered storage, data integrity and high availability. The capabilities of

Power Systems and IBM storage enable the necessary virtualization in the three-pronged labor

cost reduction model.

The next level up in the Power Systems cloud solutions stack consists of IBM Systems Director

Enterprise Edition which includes the virtualization management capabilities of the IBM Systems

Director VMControl Enterprise Edition plug-in. Systems Director is IBM’s cross-enterprise

management tool, providing monitoring and management of Power Systems, System x,

BladeCenter and System z physical virtual servers, storage, networking, software updates,

energy consumption and many other components of the IT infrastructure. By consolidating

many disparate management interfaces for servers and storage into the browser-based Systems

Director console, clients can greatly reduce labor costs stemming from maintaining, opening and

using multiple interface sessions. Systems Director also helps reduce labor costs by automating

physical and virtual server monitoring and taking pre-defined actions when an event monitor is

triggered. One example is of an event action triggered by a monitor is executing a remote

command to an HMC to increase CPU allocation of an LPAR when CPU utilization in it spikes.

VMControl provides the ability to create, monitor and dynamically change virtual servers on

multiple platforms from the single Systems Director interface, by communicating with the

PowerVM, x86 and z/VM hypervisors. Further, on Power Systems, VMControl automates and

greatly reduces the time of new virtual server deployment. In the process of rapidly deploying

new AIX and Linux virtual servers on Power, VMControl also automatically provisions the

necessary storage for the new LPARs by communicating directly with San Volume Controller, for

example. Lastly, VMControl also enables the creation of server and storage system pools. A

server system pool comprised of Power servers is a group of physical Power servers and their

LPARs, managed as a single computing resource. VMControl automates the placement of new

virtual servers, or workloads, within the server system pool and allows the creation of resiliencepolicies for workloads. A resilience policy can automatically relocate a workload to a less

utilized physical server in the system pool if a condition specified by an administrator is met,

such as a spike in average CPU utilization across a physical server. The capabilities of Systems

Director Enterprise Edition with VMControl provide the image management and

standardization in the three-pronged labor cost reduction model.

The top level of the Power Systems cloud solutions stack includes the integrated services

management application suite from IBM Tivoli. Tivoli software provides full service lifecycle

management for business and IT including, application server and storage monitoring, usage and

accounting management, as well as a self-service interface for end users and service catalog

needed to provide a cloud service delivery model. While many Tivoli applications play an

important role in the Power Systems cloud solutions stack, this brief overview focuses on the

value and cost savings gained by the use of IBM Tivoli Service Automation Manager. Tivoli

Service Automation Manager provides a common workflow automation engine for registering,

configuring and deploying virtual servers on multiple hardware platforms. In a Power Systems

cloud environment, Tivoli Service Automation Manager interacts directly with Systems Director

and VMControl by using open, industry-standard Representational State Transfer (REST)

interfaces in order to perform the deployment of a new virtual server as a managed service.

Tivoli Service Automation Manager allows you to create and maintain a catalog of available



9

services and enables lifecycle management by tracking new service deployment as a project

with start and end dates. Tivoli Service Automation Manager also provides a self-service

browser-based interface that IT staff can make available to end users for requesting and using

the defined managed services, while preserving system security with individual authorities for

each user. Tivoli Service Automation Manager enables the automation in the three-pronged

labor cost reduction model.

Virtualization Benefits of the Power Systems Cloud Solutions

To quantify the impact of labor, IBM has developed a labor model based on the server

provisioning lifecycle, shown in Figure 4:

Figure 4

The formula represents the total labor hours ascribed to the management of a server

environment as comprised of the hours spent managing a physical server over its lifetime plus

the hours spent managing the software images over their lifetime. Total hardware server labor

hours (H) include the set up and deployment hours representing one-time events such as sizing

and configuring workloads, and testing of a physical computing element. They also include hours

for scrubbing of servers, decommissioning, maintenance and troubleshooting for physical

servers over the analysis period. Total software labor hours (S) include both the initial



10

installation labor associated with the software stack or virtual images on the physical server

along with ongoing maintenance and troubleshooting over the assessment period. These tasks

include periodic patching and upgrades, associated testing functions, analysis of errors,

debugging, fixes, testing and reboots.

Solving this equation for a stand-alone x86 environment gives us a picture of how much labor

was required before virtualization. Similarly, solving the equation for the Power Systems

environment gives us insight into the total hours needed after virtualization. Fortunately, we

have data from customer case studies that can help us evaluate both equations as shown in

Figure 5:

Figure 5

For the stand-alone x86 server case, this works out to be 30.7 servers per administrator or full-

time equivalent (FTE), while the virtualized Power Systems server case turns out to be 55.9

servers per administrator.

Let us now calculate the portion of FTE labor needed to manage a single server or virtual

workload.

• Stand-alone x86 data shows 30.7 servers managed per FTE,

1/30.7= .0326 FTEs needed per server

• Virtualized Power Systems data shows 55.9 virtual servers managed per FTE,

1/55.9 = .0179 FTEs needed per server



11

We can extend this analysis to calculate the number of FTE hours needed to manage 100

workloads over a period of 5 years for these two environments:

We assumed 2,080 hours or 52 weeks per year, 8-hour days for 1 year, resulting in 10,400 hours

for 5 years.

This analysis shows that a virtualized environment on Power Systems requires 45% less totallabor hours to manage 100 Linux workloads for 5 years than a stand-alone x86 environment.

It is also important to determine how much of the total management time can be attributed to

managing the hardware (H) vs. managing the software images (S)? From our earlier analysis, it

took 100 x86 servers to handle 100 Linux workloads. For the virtualized Power Systems case, the

same 100 workloads could be handled on a single Power server.

Thus, we are left with the following equations (over a 5-year period):

(1) Stand-alone x86 (100Hi+100S) * 5 = 33,904

(2) Virtualized Power Systems (1Hp+100S) * 5 = 18,616

While the amount of time to install software on either a Power-based or x86 server is about the

same, our own hands-on usage of a virtualized Power-based server showed that it took roughly

twice the amount of hours to administer as a stand-alone x86 server. Thus, substituting Hp = 2Hi

allows us to solve the equations for their respective H and S values:

• Hi = 32 hours per year

• Hp = 64 hours per year

• S = 36 hours per year

Therefore, over a 1-year planning horizon, the total hardware labor (Hi) to manage one x86

server is 32 hours while the Power Systems server labor hours (Hp) requires twice that (64

hours). Over a 5-year period, the total hardware labor (Hi) to manage one x86 server is 160

hours while the Power Systems server labor hours (Hp) requires twice that (320 hours).The cost

to manage a single software image (S) is 36 hours over 1 year and 180 hours over 5 years.

We can use the above results to translate the reduction in labor hours through the use of

virtualization into reduction of IT labor costs over a 5-year period. According to a May 2009

FTE hours needed to manage 100 workloads for 5 years:

Multiply FTEs needed per workload * total hours over 5 years * number of workloads

• .0326 * 10,400 * 100 = 33,904 hours needed for all stand-alone x86 servers

• .0179 * 10,400 * 100 = 18,616 hours needed for all virtualized Power Systems

servers



12

report from the US Department of Labor, Bureau of Labor Statistics6, the average national

hourly wage for Network and Computer Systems Administrators was $34.10. Over a 5-year

period, it would cost:

• 33,904 hours x $34.10/hour = $1,156,126.40 to manage a stand-alone x86 environment

• 18,616 hours x $34.10/hour = $634,805.60 to manage a virtualized Power Systems

environment

Through the use of virtualization alone in a Power Systems environment, clients can reduce

labor costs by over $0.5 million ($521,320.80) over five years when compared to a stand-alone

x86 environment.

Therefore, one of the levers in reducing labor costs is to reduce the number of physical servers

you have to manage. Put another way, the more workloads you can consolidate on a given

platform, the more you can lower your labor costs. This makes larger, more scalable systems like

IBM Power Systems an ideal virtualization and consolidation platform for implementing privateclouds.

6 http://www.bls.gov/oes/current/oes151071.htm



13

Standardization Benefits of the Power Systems Cloud Solutions

As we discussed in the overview section, a key value of cloud solutions is the ability to maintain

and use a catalog of standardized software images, including the operating system, applications

and patches. Systems Director with VMControl allows clients to maintain an image repository of virtual appliances, reducing the variability in the software images IT staff must manage. To

quantify the benefits of standardization, we applied a cloning factor to our original equation as

shown below in Figure 6:

Figure 6

Solving this equation for the virtualized Power environment discussed earlier in the paper yields

the following:

• 1Hp + 100(S/C) = total labor hours over a 1-year period

Since we already know Hp and S from our previous calculations, we can substitute those values,

resulting in the following:

• 1(64) + 100(36)/C = total labor hours over a 1-year period

Expressing the formula this way allows us to play some “what if” games with the clone factor (C)

to gauge the impact of standardization on total labor hours. For example, applying a clone factor

of five would mean that out of 100 workloads there are 100/5 or 20 unique images deployed, of

which the rest are duplicates of the original twenty unique templates. When calculated over 5

years, this reduces the overall labor hours from the original virtualized Power Systems case of



14

18,616 to 3,920. Therefore, in this example, standardization of software images yields an

additional labor cost reduction of 79% over a 5-year period.

Taking standardization of images into account, we can make the following observations, as show

in Figure 7:

Figure 7

Using the same cost model as in the previous section, we can calculate the additional IT labor

cost savings through the use of standardization with a modest clone factor of 5 over a 5-year

period:

• 18,616 hours x $34.10/hour = $634,805.60 to manage a virtualized Power Systems

environment without standardization

• 3,920 hours x $34.10/hour = $133,672 to manage the same environment with software

image standardization

Clients can further reduce labor costs by another $0.5 million ($501,133.60) over five years by

using standardization.

Another lever in reducing IT labor costs is the degree to which you can use workload

standardization and cloning in your environment. Simply stated, the higher the clone factor, the

greater the reduction in labor costs associated with deploying and maintaining software

virtual images.



15

Automation Benefits of the Power Systems Cloud Solutions

As we have demonstrated, the virtualization and standardization benefits of Power Systems

cloud solutions can significantly lower IT labor costs over a 5-year period. However, a key

component of private clouds whose effect we have not taken into account yet is automation.

Consider the typical scenario of a department in a company beginning a new project andtherefore requiring one or more new workloads to be provisioned. For most clients the

standard process involves submitting a ticket to the IT staff, which proceeds to manually deploy

the workload. Automation with Power Systems cloud solutions can further reduce the labor

costs associated with both of these steps through a user self-service portal and automatic image

deployment. As we discussed in the overview section, those capabilities are provided by Tivoli

Service Automation Manager.

To help assess the extent to which the use of Tivoli Service Automation Manager can reduce

labor hours, IBM has conducted a hands-on study, which tracked the time it took to deploy and

instantiate an IBM WebSphere-based application on a virtual server using PowerVM.7 The

results for a workload are shown in Figure 8:

7 A Study on Reducing Labor Costs Through the Use of WebSphere Cloudburst Appliance.

http://www.ibm.com/software/webservers/cloudburst/cloudburst-library/



16

Figure 8

To summarize, leveraging automation provided by Tivoli Service Automation Manager, as part

of the Power Systems cloud solutions, further reduces labor costs by 67%.

Using the same cost model as in the previous sections, we can calculate the additional IT labor

cost savings through the use of automation over a 5-year period:

• 3,920 hours x $34.10/hour = $133,672 to manage a virtualized Power Systems

environment using standardization with a clone factor of 5

• 1,294 hours x $34.10/hour = $44125.40 with the additional use of automation with

Tivoli Service Automation Manager as part of the Power Systems cloud solutions

Therefore, clients can further reduce labor costs by $89,546.60 over five years by using

automation with Tivoli Service Automation Manager as part of the Power Systems cloud

solutions.



17

Putting It All Together

As our analysis demonstrates, using virtualization, standardization and automation as part of a

cloud solution on Power Systems can significantly reduce IT labor costs. Over a 5-year period,

the benefits of virtualization can lower management hours from 33,904 to 18,616 (a 45%reduction), translated into an IT admin labor costs reduction of $521,320.80. Over the same

period, the benefits of standardization can further lower management hours to 3,920 (a 79%

reduction), with an IT admin labor cost savings of $501,133.60, while adding automation brings

the total number of management hours to 1,294 (a 67% reduction), with an additional IT admin

labor cost savings estimate of $89,546.60. The combined estimated labor cost reduction of

managing 100 workloads with cloud solutions on Power Systems when compared with 100

physical servers over 5 years is 96% (33,904 to 1,294 hours) with estimate IT admin labor costs

reduced a total of $1,112,001, as shown in Figure 9:

Figure 9



18

Summary

Escalating business requirements will continue to drive companies toward datacenter

transformation. This includes pursuing ways to take costs out of their existing infrastructure

through the use of virtualization, standardization, and automation. The labor model described inthis paper can be used to estimate potential savings for a number of different deployment

scenarios and technology choices. In our example, we chose to highlight the advantages of using

cloud solutions on IBM Power Systems servers. Some of the benefits that can be expected

include:

• Private clouds built on IBM Power Systems servers and software, as well as Tivoli

integrated service management software can reduce IT labor hours by up to 96%,

translating to over $1 million savings over 5 years when compared with stand-alone

x86 servers

• The greater the consolidation you can achieve, the lower you can reduce total physical

server labor hours

• The more images you can standardize and clone, the lower you can reduce software

image labor hours

• The use of Tivoli Service Automation Manager can reduce labor hours for a unique

software image by up to 67% compared to manual deployment on an IBM Power

Systems server



19

Acknowledgements

IBM Systems Lab Services and Training

• Vess Natchev

• Mike Gordon

• Bob Minns

IBM Software Group, Competitive Project Office

• Scott Bain

• Fehmina Merchant

• John J Thomas



20

© Copyright IBM Corporation 2010

IBM Corporation

Software GroupRoute 100Somers, NY10589USA

Produced in the United StatesAugust 2010

All Rights Reserved

IBM, the IBM logo, DB2, Tivoli, WebSphere and POWER7 are trademarks or registered trademarks of International Business

Machines Corporation in the United States, other countries, or both.

Other company, product or service names may be trademarks or service marks of others.

The information contained in this documentation is provided for informational purposes only. While efforts were madeto verify the completeness and accuracy of the information contained in this documentation, it is provided “as is”without warranty of any kind, express or implied. In addition, this information is based on IBM’s current product plansand strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising

out of the use of, or otherwise related to, this documentation or any other documentation. Nothing contained in thisdocumentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM (or its

suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software.References in these materials to IBM products, programs, or services do not imply that they will be available in allcountries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at

any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be acommitment to future product or feature availability in any way.

POW03052USEN-00

Reducing IT Operational Costs With IBM Power Systems Cloud Solutions

Documents

Transcript of Reducing IT Operational Costs With IBM Power Systems Cloud Solutions