Sun Customers Face Challenges – We Can Help You The Payback from System z Workload Consolidation

8/6/2019 Sun Customers Face Challenges – We Can Help You The Payback from System z Workload Consolidation

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June 2009

Sun Customers Face Challenges – We Can Help YouThe Payback from System z Workload Consolidation



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Agenda

Uncertainty—Reality Check

IBM System z ® Core Competencies

How We Would Like to Help

Next Steps



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$5,000

$10,000

$15,000

$20,000

$25,000

ev en u e

System z HE Sys p HP Sun FSC All Others Server Spending

$250K + Servers Shares by Key Vendor• System z has nearly doubled its share since Q400 from 17% to 32%.

• Sun’s share (15%) peaked in Q1 2001 and has since been on the decline.• HP has held relatively flat around 20%.

• The $250K+ server market segment spending has been declining since 2000 and since the end of 2005, thespending has stabilized around $15B. The z10 EC™ growth raised the segment growth rate from 4 to 7% for2008 and helped raise the segment spending to $16.1B.

Rolling 4 Quarter Average

z900

z800

z990

z890z9 ® EC z9 BC

Source: IDC 4Q08 WW Server Tracker

z10 EC



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Oracle’s announcement does not address SPARC investment protection

Oracle’s stated reasons for acquiring Sun“We estimate that the acquired business will contribute over $1.5 billion to Oracle’s non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. This would make the Sun

acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined.”

- Safra Catz, Oracle President

“Sun Microsystems has a variety of exciting products, but two of their software products -- the Sun Solaris operating system and Sun's Java™ programming

language -- were instrumental in Oracle's decision to acquire Sun.”

- Charles Phillips, Oracle President

“Sun hasn't been able to generateenough sales to cover its risingoperating costs, resulting in manyquarters of missed earnings targets.Huge research and development

costs and administrative expenseshave left Sun with razor-thin margins.The company has lost $1.86 billion inthe past two quarters, the first half ofits current fiscal year.” – DavidMacDougall



• Are your investments in Sun HW, SW, Skills and Applications at risk?- “How quickly will Oracle exit the hardware business? My bet: ASAP”. Bruce Richardson -

- “SPARC's market share has been falling to rival UNIX server vendors like Hewlett-Packard and IBM,

giving Oracle more incentive to cut the development of SPARC or sell off the business.” Jim McGregor

Chief Technology Strategist -

- “In order to deliver $1.5B in op. profit, [Oracle] would need to boost profits by $700 million assuming

no material revenue erosion, which suggests incremental headcount reductions of 5,500 to 10,000

depending on timing.” Tony Sacconaghi -

• Increased cost ahead?- “The database giant is hitting users of its databases and application server software with increases of

between 15 percent and 20 percent in licensing.” - June 2008 -(Note: Quote is not on Sun products, but is an example of what Oracle’s done in the past after itpurchased another company, BEA)

- “I expect we'll see Oracle jacking up maintenance (Java) license prices on existing Sun customers.”

Michael Cote -

• Will there be disruption to your ISV Ecosystem / Business Applications?- “A combined Oracle/Sun shows uncertainty among the Data Warehouse appliance vendors--such as

Greenplum and ParAccel--who have partnered with Sun and now find themselves in earnest “co-opetition”

with full-competitor (and then some) Oracle.” James Kobielus –

- “Oracle’s not so stellar history with open source” Charles King -

Industry Analysts have identified potential risks



IBM can help you reduce costs, mitigate risks and improve service….

IBM has the breadth and depth oftechnologies, services and support tohelp clients tackle their key ITprojects

The number 1 server vendor in the industry -from blades to UNIX ® to (real) mainframes (1)

Leading edge technologies from clouds to DRand secure data management solutions

A complete portfolio of leading middleware,tools and utilities

Outstanding levels of technical skills

A dominant services business in the industry

Fit for purpose migration capabilities

Leadership in virtualization to drive down costthrough consolidation

All designed to deliver

transformational benefits, minimizingrisk and maximizing return(1) Source: Gartner (July, 2008)



Today’s System z’s core competencies align

fully with a Dynamic Infrastructure

Businesses and IT face morechallenges and uncertainty than ever

before -

An unprecedented global economicdownturn

Increasing customer expectations andcompetitive pressures

An explosion in the volume of data

Exponential growth in communicationsubscribers and devices.

The result - Systems and Infrastructure

are reaching a breaking point



System z: Steady, Core Capabilities for Today’s Business

The virtualization that works to maximizeROI and enable consolidation to drive

down costs and dramatically reduceenergy consumption

The security and availability that helpdrive trust, confidence and savings onthe bottom line

The scalability and flexibility that candeliver the adaptability required for

changing business demands

The manageability and automationcapabilities designed to provide control,

and respond on-the-fly to changingresource demands



Surveys indicate IBM System z ® customers use Linux for:

Web Serving

Web Application Serving

Data Services

Systems Development

“Best Fit” Workloads for Linux on System z:

Business connectors: WebSphere ® MQSeries ® , DB2 ®

Connect, CICS

®

Transaction Gateway, IMS

™

Connect for Java Business critical applications: e.g. SAP

Development of WebSphere and Java applications

WebSphere Application Server (WAS)

Email & collaboration: Domino™, Web 2.0

Network Infrastructure: FTP, NFS, DNS, etc. and CommServer and Communications Controller for Linux,Communigate Pro (VoIP)

Data services: Cognos ® , Oracle, Informix ® , InformationBuilders WebFOCUS

Applications requiring top end disaster recovery model Virtualization and Security Services

Source: IBM Market Intelligence

What are Clients Consolidating?

13%

20%

15%

12%

17%

12%

24%

8%

48%

52%

60%

63%

13%

21%

30%

11%

25%

15%

21%

25%

61%

52%

70%

72%

25%

18%

17%

20%

27%

18%

15%

25%

50%

70%

60%

72%

Other

Network Server

Firewall Server

WorkgroupSystem

eCommerce

eMail Server

Core EnterpriseApp

BI App

Data Serving

Development

System

Web App

Server

Web Server

2H08

1H08

2H07



IBM leadership in high end enterprise computing

market System z has nearly doubled its

share since Q4’00 from 17% to

32%(1)

System z new workload capacitygrew by 68% in 2008 (2)

System z Linux new capacity on z

in 2008 = ~40-60,000 x/86 cores 77% increase in System z Linux

MIPS in 2008

Approximately 1,300 System z

customers are now using Linux onz

Linux is ~15% of the customerSystem z install base (MIPS)

Source: (1) IDC 4Q08 WW Server Tracker

(2) IBM inventory of specialty engines



Demonstrates unique IBM Value Proposition against competitivescale-out solutions (e.g., SUN, HP, Intel ® )

Real customers, real workloads!

CustomerDistributed

CoresIBM System z10™

CoresRatio of distributed

to z cores*

Nationwide 350 15 23 to 1

GovernmentAgency

292 5 58 to 1

ABP 1324 36 36 to 1

* Client results will vary based on each specific customer environment including types of

workloads, utilization levels, target consolidation hardware, and other implementationrequirements.

Source: zCPO

System z Achieves High Core-to-Core Ratios When

Consolidating from Distributed Environments



1 IDC server tracker, Nov 08, , $250K+ servers

Consolidation with Linux on System z: Join therevolution

2008 new Linux capacity onSystem z

~ 40-60,000 x/86 cores

77% increase Year To Year

Linux capacity accounts for

Approximately 15% of total System zcapacity installed

Linux capacity helps drive System zshare to more than 32%1

2009, the momentum continues

53% increase Year to Year



Reduce cost through consolidation on System z

Consolidating 20 Solaris servers to 10 IFLs

Can save up to 53% over SPARC IVOracle DB Workload, 3-Year Total IT Cost

Here’s a cool example: IBM is consolidating 3,900 servers to about 20 System z10 servers with expected reductions in

energy consumption of over 80%

Consolidation:

Save up to 50% over x86

virtualization

3 Year Total Cost of OwnershipOracle DB Workload

Sun v490 (160 total cores) IBM System z10 EC (10 IFL engines)

HW SW SW Maintenance HW Maintenance People, Energy, and Floor Space

(1)

Prices are in USD. Prices may vary in other countries.

Data is based on real client opportunity and on internal standardized costing tools andmethodologies.

Client results will vary by types of workloads, technology level of consolidated servers,utilization factor and other im lementation re uirements. Savin s will var b client.

(1) Ratio of z10 EC processor cores to Sun SPARC processor cores will vary depending onthe age and speed of the SPARC processors and the workloads being run on them



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Thought System z was too expensive? Think again!

Even without considering energy savings, reduced admin costs, or floor space benefits…

System z can be the best choice for your bottom line

Save up to 11% with System z before energy, admin, and floor

space considerations

Prices are in USD. Prices may vary in other countries.

Data is based on real client opportunity and on internal standardized costing toolsand methodologies.

Client results will vary by types of workloads, technology level of consolidatedservers, utilization factor, and other implementation requirements. Savings will varyby client.

3 Year Total Cost of Acquisition

Oracle DB Workload

Sun SPARC M8000 40 Core 12 z10 IFLs

HW SW SW Support HW Maintenance

(1) Ratio of z10 EC processor cores to Sun SPARC processor cores will vary depending onthe age and speed of the SPARC processors and the workloads being run on them

(1)



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Your IT Cost may vary

Consolidating 134 Linux serversto 5 IFLs can save over 70%Oracle DB Workload, 3-Year Total IT Cost

134 x86 Cores 5 z10™ Cores

Space

Power

People Cost

Software

Maint

SoftwareMaint

Hardware

Sun X2100 SingleCore servers

z/VM ® Linux on 5xz10 BC IFLs

System z large scale consolidation of Oracle and Sun

workloads

System z industry leadingvirtualization delivers consistent

85%+ utilization for unrivalled ROI

Dramatic savings are possible byconsolidating to System z:

System z10 EC can reduce per-corelicensing costs up to 30 to 1compared to x86 environments (1)

Reduce energy consumption by up

to 80% Reduce floor space by up to 85%

Reduce Labor costs by up to 80%

(1) Ratio of z10 EC processor cores to x86 processor cores will vary depending on the ageand speed of the x86 processors and the workloads being run on them

Prices are in USD. Prices may vary in other countries.Data is based on real client opportunity and on internal standardized costing toolsand methodologies.

Client results will vary by types of workloads, technology level of consolidatedservers, utilization factor, and other implementation requirements. Savings willvary by client.



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Remember Project Big Green ? We know about

virtualization consolidation first hand!Our experience can help with your projects!!!

IBM to reallocate $1 billion each year

Accelerate ‘green’ technology / services

Client energy roadmap / IBM capabilities

Global ‘green’ team

Re-affirming IBM commitment

40% reduction in CO2 emissions and

$250M energy savings / 15 years Commit to invest $100M/yr infrastructure to

support best ‘green’ practices

IBM is consolidating and virtualizing thousands of server images onto System z

mainframes Substantial savings: energy, software and systems

support costs

80% less energy, 85% less floor space

Enabled by virtualization capability

Major proof point for Project Big Green

Double compute

capacity with no

increase in consumption

or impact by 2010



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Solution Value Stable nonstop core system

Superior reliability, availability, and scalability

Improved transaction rate with high-speedinternal network

Highly scalable environment with System zvirtualization

Optimized hardware cost (System z + Systemx hybrid system)

Existing Java applications run without rewrite

Pain Points Instability of distributed environment

Frequent outages and reliability

Poor transaction performance due to complexphysical network

Poor scalability

High hardware and software cost associatedwith aging infrastructure

Migration concerns of existing Javaapplication

IBM gains infrastructure and Oracle consolidation on System zand Linux from SUN Solaris at a Japanese Electronics Client.

83.3% Savings of ISV SW Licencing Client evaluated the System z capabilities and determined that all applications could

successfully migrate without rewriting the existing Java applications.

IBM understood client pain points and was able to quickly design, develop, andimplement a solution.

"IBM System z is the best system as the next generation open platform in terms of reliability, scalability, and system performance. We evaluated IBM because of its end to end support including installation services and

maintenance services. Also, IBM demonstrated the high quality proposal, articulated the clear and concrete architecture roadmap, so that we concluded that IBM is the best and the trusted partner." Client Corporate Information

Officer (CIO)



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Client Success on System z – Financial Services

New System z customer in 2008

Large Oracle D/B consolidation from distributed UNIX environment toSystem z Linux

Home grown customer application migrated from UNIX to Linux onSystem z – mostly C and C++ code

Purchased z10 EC in 4Q08 – 30 IFLs Purchased two additional z10 ECs in 1Q09 – 60 IFLs for a new data

center to replace existing x86 environment

Customer using System z to instill system management discipline

Working with the customer to “move all we can onto System z Linux”

Initial energy savings = approximately 76% less energy used toprocess this workload

Consolidation improved operating efficiencies; from distributed to Linux on System z

Saved 76% in energy use, alone

Enhanced Flexibility and Control of IT operations Conserved the benefits of an Oracle dg environment

Built customer confidence re: where to put new workloads

T h e

S t o r y

Source: Based on actual client experience; client asked to remain un-named, for now



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Moving to IBM System z: Getting started

Look at the 2,800+ applications already running on Linux on z

Exploit our experience in porting applications to Linux on z

Consider Sun workloads with greatest affinity to System z architecture

IBM Migration Factory helps automate migrations for your efficiency

Where possible consolidate workloads for very fast cost savings

Let’s start a drill-down discussion: where can we help you savecosts, improve services, and manage risk as you consolidate.With over 1,000 successful migrations to our Systems, we have

the know-how, speed, and Enterprise Expertise to help you whenit really counts…NOW!



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System z Can Improve IT Support for Your Business

System z Delivering Value at, Ultimately, Lower Costs Performance: unequalled 9,445 TPS Core Banking benchmark,

Virtualization Efficiency : up to 1/10,000 processor granularity,

Security: EAL 5-level, unmatched comprehensive encryption design Business-goal-driven, automated resource allocation,

Availability lowest general server outage/year (Standish Report 2008)

System z can reduce today’s cost by consolidation of Sun workloads: Up to 80% cost of ownership savings, over three years, using Linux on z

IBM and System z delivers a compelling strategic choice Cross-industry appeal: all of the top 50 worldwide banks and 22 of the top 25 U.S.

retailers run System z. Enabling your business to tap the leading edge of Global Economic recovery

If indicators are correct, time to position for next wave. Cloud, SOA, Web

“n.0” -- some companies will step up: Why not You? Why not NOW?



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z Rewards Program

Help clients fund migrations of applications and data from SUN and HP. Customer buys a qualifying System z.

Earn z Rewards points redeemable for migration services.

Move production workload from the old HP or Sun system.

New!

Core Type Workload is moved fromPoints percore*

PA-RISC 4,000

SPARC 8,000

Itanium ® , MIPS, Alpha 1,000

HP ProLiant, Sun Fire Xxxx0, Dell PowerEdge and Whiteboxsystems running Linux, Windows or Solaris

500

z Rewards redemptionQualifying SystemsAvailable on new or incremental IFL’s associated with:• Eligible new System z 10 BC™ machine• A new System z10 EC machine• MES upgrades on existing System z 10 BC or z10 EC• eligible upgrade to System z 10 BC or System z 10EC

Up to 50% of the negotiated customer price of System z. Consolidate up to 30 cores of distributed system workloads with a single z IFL.

http:/www.ibm.com/systems/migratetoibm/systems/z/rewards.html

z Rewards Points

zLite Benchmark Offerings 2,500System z sysplex Availability QuickCheck 5,000

z Cloud Innovation Workshop 5,000Sysplex HA Planning and Assistance 10,000

New System z technology enablement workshop 10,000Linux on System z migration discovery/planning workshop 15,000

System z Architectural Review 15,000Distributed to System z integration workshop 15,000

Accelerator! IBM System z Health Assessment 20,000

Accelerator! z/VM and Linux on IBM System z Health Check 20,000A ccelerator! Performance E nvironmental Changes Study 20,000

Acce lera tor! Hardware Component Fa ilu re Impact Analys is 20,000Accelerator! DFSMShsm Assessment 20,000

Accelerator! General Maintenance Assessment 20,000Accelerator! Maintenance Currency Assessment 20,000

Accelerator! DB2 on IBM System z Health Check 20,000Accelerator! MQSeries on IBM System z Health Chec k 20,000

Accelerator! CICS on IBM System z Health Check 20,000Accelerator! Security Architecture and Key Management Review 20,000Accelerator! IBM System z SOA Services 20,000

Accelerator! Java Performance 20,000System z Availability Assessment 20,000

High Level Architectural Design Workshop 20,000

System z Custom Migration Services 50,000

*Subject to approval by local pricing team.

http://www.ibm.com/systems/migratetoibm/systems/z/rewards.html

http://www.ibm.com/systems/migratetoibm/systems/z/rewards.html



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Summary: How IBM and System z can help

Select workload for Proof Of Concept to demonstrate cost savings Work with IBM to identify high potential workload Proof of Concept (POC)

Use IBM Application Assessment Team to identify “Fit for Purpose” applications

Conduct appropriate Cost/TCO assessment to ensure cost justification

Leverage IBM Proof Of Concept Centers Engage IBM Optimization Factory to migrate workloads in minutes vs. months

Start to realize the benefits and value of an

optimized IT environment Virtualization to increase resource utilization

Server and Storage Consolidation to help reduce cost

Energy Efficiency to maximize work per watt

Systems Management and Automation to reduce complexity and operations costs

Take advantage of special offers available NOW

z Rewards for workload migration to System z fromcompetitive servers (up to $8K per SPARC core)

Other special offers : Discuss with your IBM representative



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Back Up or Optional Charts



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IBM Migration and Consolidation Factory

Offerings Migration Factory

Migration Offerings in a Box for SAP, Oracle, Database and Infrastructuremigrations/consolidations

Expanded WW Support from Application Mgmt Services, GTS and Lab Services

Makeover Offers: answers your consolidation and migration questions

Server Makeover Analysis

Oracle / SAP Makeover

Migration Assessments: shows how the migration is done, how long it takes, what it costs and how much you will save

Server Consolidation Analysis

Virtualization

Energy Efficiency

Roadmap to continuous availability

Migration Proof of Concept

Solution Framing Plan and Design

Implementation



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Top Differentiators: System z

1. Availability: Standish: z10 is “out” 110.3 minutes/year: Sun’s M9000?, Sun 2100’s?

2. Linux on z: up to 80% savings1 —consolidate to Linux from Distributed systems

3. Space and Energy use: about 1/3 of what our competition uses; similar workloads4. Thoughput/performance: 9445 transactions per sec. Core Banking benchmarks

5. Security: System z is unmatched; EAL 5 government ratings

6. Virtualization: enables utilization up to 100%: new images in minutes/hours, not days

7. Management: Business-goal based, not IT “rules-based” (meaning more flexibility)

8. Business Continuity: “10” rating by Gartner

9. Roadmap Predictability: steady increase in performance, capacity, and innovation

10. Investment Protection: cost-saving conservation of skills, applications, technology

Microsoft

PowerPoint Slide

zGrowthConsolidation

Microsoft

PowerPoint SlideMicrosoft

PowerPoint Slide

SecurityWant more proof “Why z?”

1.80% includes available discounts, services,and measures TCO vs Competition



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System z Differentiators—We Can Improve Your Situation

Virtualization capability LPAR Mx000

Move/add/remove active (running

a workload) resourcesbetween/to/from active partitionswithout a reboot

Yes (CPU, Memory, and I/O)

Limited. Dynamic resource operations areperformed at a granularity of ¼ of a systemboard4. System boards containing kernelmemory require an active partition to be

suspended to perform a move/remove5.Running processes must manually be

unbound from a processor before performing amove/remove operation on the ¼ system

board the processor is attached to6.

Dynamically allocate processing

resources between partitions

Yes, Processors or more evaluated and

dynamically allocable every 10 milliseconds

No7

Dedicate Processing Resourcesto a partition

Yes, as little as one CPU / partition and up toall processors in the machine

Yes, at least ¼ of a system board (Oneprocessor, eight DIMMs, and ¼ of I/O

attached to the board) / partition8

Share I/O Resources between

partitions

Yes No7

Dedicate I/O Resources to apartition

Yes, as little as one dedicated I/O adapter slot / partition and up to all I/O slots in the machine

Yes, at least ¼ of a system board (Oneprocessor, eight DIMMs, and ¼ of I/O

attached to the board) / partition8

Claim substantiations on slide “Substantiations for System z vs Sun Dynamic Domains”Microsoft

PowerPoint Slide

Translation? Sun’s documented Virtualization limitations may not help clients save

costs, expand capacity, and secure their environment as well as System z does!



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System z LPAR vs. Sun Hardware Partitioning

Virtualization capability

LPAR Mx000 Business Value

Max Partitions 60 – Enterprise Class30 – Business Class

4 physical Consolidate workloads and have a betterTCO

Linux OSSupport

Yes No1 Support for a broader range of applications

Support for

SharedProcessors

Yes No7 Higher server utilization and consolidationratios

PartitioningGranularity

Fraction of a CPU

¼ of a system board(1 processor, 8

DIMMS, and ¼ of I/O

attached to the board)8

Courser granularity prevents overallocating resources in a sub-optimal

manner to workloads

Support forShared I/O

Yes No7 Share a resource that is typicallyunderutilized

LPAR offers significant business advantages well beyond those offered by Sun’s Dynamic Domains simple consolidation play.

Mi ft

Sun Customers Face Challenges – We Can Help You The Payback from System z Workload Consolidation

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