1. April 2009
MANAGEMENT BRIEF
VALUE PROPOSITION FOR
IBM POWER SYSTEMS
Virtualization Impact for Enterprise
UNIX and Linux Server Infrastructures
International Technology Group
4546 El Camino Real, Suite 230
Los Altos, California 94022-1069
ITG Telephone: (650) 949-8410
Facsimile: (650) 949-8415
Email: info-itg@pacbell.net

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3. TABLE OF CONTENTS
EXECUTIVE SUMMARY 1
COST PICTURE 2
UNIX Server Infrastructures 2
IT Costs 2
Linux Server Infrastructures 5
IT Costs 5
Costs of Downtime 5
New UNIX System Deployments 6
Cost Comparisons 6
Costs of Downtime 9
DETAILED DATA 10
UNIX Server Infrastructure Comparisons 10
Installations and Scenarios 10
IT Costs 11
Costs of Downtime 13
Linux Server Infrastructures 13
Installations and Scenarios 13
IT Costs 14
Costs of Downtime 15
New UNIX System Deployments 15
Installations and Scenarios 15
IT Costs 17
Costs of Downtime 18
Cost Assumptions 19
Server Costs 19
Personnel Costs 19
List of Figures
1. Conventional and Power Virtualized UNIX Server Scenarios: Five-year Operating Costs 2
2. Conventional and Power Virtualized UNIX Server Scenarios: Five-year Overall Costs
(Virtualized Scenarios include Operating and Acquisition Costs) 3
3. Five-Year I/O-related Costs for Partitioned IBM Power Servers:
Averages for All Power Virtualized Scenarios 4
4. Conventional and Power Virtualized UNIX Server Scenarios: Five-year Costs of Downtime 4
5. x86 and Power Linux Server Scenarios: Average Five-year Costs for All Installations 5
6. x86 and Power Linux Server Scenarios: Five-Year Costs of Downtime 6
7. New UNIX System Deployments: Five-year IT Costs 7
8. Numbers of Hard Partitions Supported: HP and Sun UNIX Server Platforms 8
9. New UNIX System Deployments: Five-year Costs of Downtime 9
10. Profile Installations and Scenarios for UNIX Server Infrastructure Cost Comparisons 10
11. Cost Breakdowns for UNIX Server Infrastructure Comparisons 12
12. Profile Installations and Scenarios for Linux Server Infrastructure Cost Comparisons 13
13. Cost Breakdowns for Linux Server Infrastructure Comparisons 14
14. Profile Installations and Scenarios for New UNIX System Deployments Comparisons 15
15. Cost Breakdowns for New UNIX System Deployment Comparisons 18
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4. EXECUTIVE SUMMARY
Server virtualization has emerged of one the critical technologies of our time. The potential clearly exists
to significantly reduce costs and complexities of enterprise server infrastructures, to create new flexibility
in server reconfiguration and provisioning, and to improve availability and other variables of service
quality for server-based applications throughout organizations.
Although industry debate tends to focus on the application of VMware and equivalents to x86 server
consolidation, in reality UNIX server virtualization technologies are – by wide margins – more
sophisticated and mature than their x86 counterparts.
The Power platform is, in turn, the recognized industry leader in UNIX server virtualization. Because the
technologies it employs have evolved rapidly over the last few years, even many longstanding Power
users have yet to fully exploit its potential.
This report deals with this potential. Specifically, it looks at three opportunities to reduce IT costs through
use of latest-generation IBM Power servers and PowerVM technology:
1. By replacing existing UNIX server infrastructures with virtualized Power servers, five-year
operating costs may be reduced by an average of 61 percent.
Comparisons are between the use of diverse multivendor bases of UNIX servers, which are
representative of most large organizations today, and current-generation Power servers exploiting
the full potential of PowerVM virtualization capabilities.
If costs of acquiring new Power server hardware and systems software to realize these savings are
allowed for, overall costs are still significantly lower. Five-year costs, including acquisition and
operating costs, average 54 percent less.
2. By replacing existing Linux server infrastructures with virtualized Power servers, five-year
operating costs may be reduced by an average of 58 percent.
Comparisons are between Linux applications deployed on distributed x86 servers and on current-
generation Power servers again exploiting the potential of PowerVM capabilities. If acquisition
costs are included in Power virtualized scenarios, five-year costs average 52 percent less.
3. For large-scale new UNIX system deployments, five-year acquisition and operating costs for use
of Power servers average 43 percent less than those for Hewlett-Packard Integrity and 60 percent
less than those for Sun Microsystems M and T series servers.
Comparisons are between database-intensive systems with high levels of virtualization deployed
on Power servers using PowerVM; on HP Integrity servers using the company’s Virtual Server
Environment (VSE); and on Sun servers employing dynamic domains, Logical Domains
(LDoms), and Solaris Containers and Zones technologies.
Use of Power servers and PowerVM may also result in lower costs of downtime – meaning costs incurred
by organizations due to disruptions affecting business processes and user productivity – than for existing
UNIX and Linux server infrastructures, and for new UNIX system deployments. These results are
outlined in the following section.
Additional information on the methodologies and assumptions employed, along with breakdowns of
installations, configurations and costs are presented in the Detailed Data section of this report.
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5. COST PICTURE
UNIX Server Infrastructures
IT Costs
This set of five-year cost comparisons is based on three composite profile installations in large financial
services, manufacturing and retail companies with between $15 billion and $35 billion in revenues. For
each profile installation, two sets of scenarios were developed:
1. Conventional scenarios. These include diverse bases of between 78 and 242 UNIX servers,
including a variety of HP, IBM, Silicon Graphics and Sun models. The demographics of these
server bases and the efficiency with which they are used are representative of most large
organizations today. Virtualization is employed to a limited degree.
2. Power virtualized scenarios. In these, the same applications and workloads run on current-
generation Power servers exploiting the full potential of PowerVM virtualization capabilities.
Five-year operating costs for Power virtualized scenarios range from 54 to 65 percent less, and average 61
percent less than those for conventional equivalents. Figure 1 summarizes these results.
Figure 1
Conventional and Power Virtualized UNIX Server Scenarios: Five-year Operating Costs
Operating costs, in this context, include hardware maintenance, update subscriptions and support for
systems and database software, personnel for system administration-related functions, and facilities costs
for data center occupancy, power and cooling.
Database costs are for Oracle databases and management tools. Calculations reflect the change in Oracle
database pricing for POWER6-based servers in March 2009.
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6. Lower costs were enabled through multiple virtualization capabilities. Both forms of partitioning
supported by PowerVM – firmware-based logical partitions (LPARs) and software-based Workload
Partitions (WPARs) – were employed aggressively to achieve high levels of server consolidation for
diverse applications, databases and workloads.
Consolidation was achieved without impairing performance or availability. Closely integrated Power
server system and workload management facilities were exploited to enable organizations to realize high
levels of capacity utilization, while minimizing risks that partition workloads on the same server would
interfere with each other, or cause performance bottlenecks or outages.
Full time equivalent (FTE) staffing levels for system administration-related functions such as asset,
capacity, change, configuration and performance management are significantly lower for Power
virtualized scenarios. Personnel costs for these functions are correspondingly less.
This is due to reductions in numbers of physical servers; reduced diversity of hardware and software
platforms; replacement of older-technology servers and systems software with latest-generation Power
hardware and software; improved management tools and practices, including increased automation; and
use of PowerVM virtualization capabilities.
If costs of acquiring new Power server hardware and systems software to realize these savings were
allowed for, overall costs were still significantly lower. Five-year costs ranged from 46 to 59 percent less,
and averaged 54 percent less than those for conventional scenarios.
Figure 2 summarizes these results.
Figure 2
Conventional and Power Virtualized UNIX Server Scenarios: Five-year Overall Costs
(Virtualized Scenarios include Operating and Acquisition Costs)
In Power virtualized scenarios, use of Virtual I/O Servers resulted in I/O-related costs for servers
employing LPARs that averaged 73 percent less than would have been the case if dedicated adapters were
employed. Figure 3 summarizes these results.
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7. Figure 3
Five-Year I/O-related Costs for Partitioned IBM Power Servers:
Averages for All Power Virtualized Scenarios
Savings were realized in acquisition, maintenance and support costs through use of fewer physical local
area network (LAN) and storage area network (SAN) adapters, as well as in costs for related
infrastructure components such as cabling, hubs and switches.
Costs of Downtime
Five-year costs of downtime for Power virtualized scenarios ranged from 43 to 54 percent less, and
averaged 47 percent less than those for conventional equivalents. Figure 4 summarizes these results.
Figure 4
Conventional and Power Virtualized UNIX Server Scenarios: Five-year Costs of Downtime
COMPANY FINANCIAL SERVICES MANUFACTURING RETAIL
CONVENTIONAL SCENARIOS
Availability levels 99.5% – 99.94% 99.83% – 99.9% 98.7% – 99.9%
Five-year costs ($000) 26,266.8 46,165.3 14,552.5
POWER VIRTUALIZED SCENARIOS
Availability levels 99.8% – 99.97% 99.9% – 99.96% 99.3% – 99.95%
Five-year costs ($000) 12,148.3 26,285.4 7,453.0
In this presentation, availability percentages reflect hours of system-level outages relative to annual hours
of operation of companies, or business areas within companies that are supported by specific applications.
Costs of downtime for the financial services company represent lost operating profit, meaning net revenue
after deduction of personnel, occupancy, equipment and other overhead. For the manufacturing and retail
companies, the comparable metric is lost gross profit, meaning profit net of cost of goods sold, but before
deduction of selling, general and administrative (SG&A) and other expenses.
Key Power availability strengths that contributed to lower costs of downtime included reliability,
availability and serviceability (RAS) features of Power hardware and the AIX operating system, and the
IBM PowerHA for AIX clustered failover solution.
LPARs also assisted in avoiding planned outages by allowing users to upgrade or modify software
without taking systems offline. Two newer capabilities made it possible to transfer partitions between
servers if these needed to be shut down: (1) Live Partition Mobility involved no interruption of service,
while (2) Live Application Mobility involved interruptions of typically no more than 20 seconds.
Power server system and workload management capabilities further reduced risks of bottlenecks and
outages caused by workload spikes and operational errors.
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8. Linux Server Infrastructures
IT Costs
In addition to the AIX operating system, Power servers may also run the major Linux distributions in
native mode. To address this potential, comparisons were made for different sets of Linux-based
applications for the three profile companies. Comparisons were based on mixes of business as well as
Web and intranet serving, file serving, software development and other applications.
Two sets of scenarios were then compared. First, in x86 server scenarios, applications were deployed on
one- to four-way Intel-based servers from Dell, HP, IBM and other vendors, with limited use of VMware
and Xen virtualization tools. Second, in Power server scenarios, multiple Linux operating system
instances were hosted on Power servers using PowerVM.
For x86 server scenarios, operating costs – primarily hardware maintenance, personnel and facilities –
were calculated. For Power server scenarios, operating costs as well as acquisition costs for server
hardware and PowerVM licenses were calculated. Figure 5 summarizes results.
Figure 5
x86 and Power Linux Server Scenarios: Average Five-year Costs for All Installations
Five-year operating costs for Power server scenarios ranged from 55 to 61 percent less, and averaged 58
percent less than those for x86 server scenarios. If acquisition costs are included in Power virtualized
scenarios, five-year costs for these ranged from 50 to 57 percent less, and averaged 52 percent less.
Costs of Linux operating systems and databases were not included. Operating system costs would depend
on the number of instances employed, which was the same for x86 as for Power server scenarios.
Database costs were not included because Linux servers were not widely employed as database servers in
the organizations upon which profile installations were based.
Factors causing lower costs for Power scenarios included high levels of consolidation and capacity
utilization enabled by LPARs; lower staffing levels and personnel costs for system administration-related
functions; and lower facilities costs due to use of significantly fewer physical servers.
Costs of Downtime
Costs of downtime were also compared for x86 and Power virtualized scenarios for Linux serving,
although a different quantification method was employed.
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9. Linux servers in the organizations upon which profile installations were based did not typically support
business-critical systems for which downtime could be measured in the same manner as for UNIX server
comparisons. It was thus decided to employ lost productivity values based on interruptions caused to
application users.
Using this approach, results for costs of downtime were calculated as shown in figure 6.
Figure 6
x86 and Power Linux Server Scenarios: Five-Year Costs of Downtime
COMPANY FINANCIAL SERVICES MANUFACTURING RETAIL
x86 SERVER SCENARIOS
Availability levels 99.45% – 99.93% 98.5% – 99.75 99.25% – 99.85%
Five-year costs ($000) 1,943.7 2,686.8 2,086.2
POWER SERVER SCENARIOS
Availability levels 99.93% – 99.98% 99.85% – 99.95% 99.88% – 99.98%
Five-year costs ($000) 275.3 689.1 452.0
Costs of downtime for Power server scenarios ranged from 74 to 86 percent less, and averaged 79 percent
less than those for x86 server equivalents.
New UNIX System Deployments
Cost Comparisons
Five-year IT costs as well as costs of downtime were also compared for new UNIX system deployments
employing HP Integrity, IBM Power and equivalent Sun platforms.
Three different composite installation profiles were employed for these comparisons. These were for
deployments of database-intensive systems with high levels of virtualization in telecommunications,
distribution and manufacturing companies with revenues of between $500 million and $12 billion.
Installations included business-critical as well as secondary applications supported by multiple high-end,
midrange and small server platforms.
Three sets of scenarios were developed:
1. HP VSE scenarios were built around HP Integrity servers employing the HP-UX 11v3 operating
system and the three forms of partitioning – (1) hardware-based nPars and software-based (2)
vPars and (3) Integrity Virtual Machines – supported by the company’s Virtual Server
Environment (VSE).
2. IBM PowerVM scenarios were built around IBM Power servers employing the AIX 6.1
operating system, along with PowerVM including LPARs and AIX WPARs.
3. Sun scenarios were built around multiple Sun server platforms employing the Solaris 10
operating system.
These included SPARC Enterprise M series servers employing the company’s hardware-based
partitioning technology, dynamic domains; T series (CoolThreads) servers employing software-
based LDoms; and Sun x64 servers. The Sun application-based partitioning technology, Solaris
Containers and Zones, was employed on all three platforms.
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10. For clustered failover, HP Serviceguard and IBM Power HA solutions were employed in HP and IBM
scenarios respectively, and an equivalent third-party solution was employed in Sun scenarios.
Five-year IT costs were then calculated for these scenarios for each profile installation. Costs included
acquisition of hardware and licenses for operating systems; virtualization tools; cluster solutions and
Oracle 11g databases and management tools; hardware maintenance and software update subscriptions
and support; and facilities costs for data center occupancy, power and cooling.
Database costs again reflected the change in Oracle pricing for POWER6-based servers in March 2009.
Personnel costs for system administration and related functions are not included, as these would have
been largely similar, at least for HP VSE and IBM PowerVM scenarios.
Results are summarized in figure 7.
Figure 7
New UNIX System Deployments: Five-year IT Costs
Five-year IT costs for PowerVM scenarios range from 38 to 50 percent less, and average 43 percent less
than those for HP VSE equivalents; and range from 48 to 67 percent less, and average 60 percent less than
those for Sun equivalents.
Lower IT costs for PowerVM scenarios are due to multiple factors. One is the higher granularity of IBM
LPARs compared to Hewlett-Packard’s nPars and Sun’s dynamic domains.
Among the organizations that provided input for this report, “hard” partitioning technologies were
preferred for business-critical production environments whose performance and availability requirements
were more demanding than the norm. This was consistent with general industry experience.
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11. HP and Sun employ hard partitioning technologies based on cell boards in Integrity and M series servers
respectively. In the case of HP, nPars can be configured in increments of four Itanium2 processors (eight
cores), corresponding to the cell board structure of larger Integrity models. nPars are not supported on
smaller Integrity models with up to four processors, which are not cell board-based.
Sun dynamic domains can be configured in increments of one system board (cell board) with four
processors (16 cores using quad-core SPARC64 processors), or one-quarter of a system board with one
processor (four cores), along with one quarter of the board’s memory and I/O resources.
There are, however, limitations in the overall number of dynamic domains supported, which are
illustrated in figure 8. Dynamic domains are supported only on M series servers.
Figure 8
Numbers of Hard Partitions Supported: HP and Sun UNIX Server Platforms
HEWLETT-PACKARD
rx2660
Model rx6600 rx7640 rx8640 Superdome
rx3600
Processors 1–2 1–4 1–8 1 – 16 1 – 64
nPars n/a n/a 1–2 1–4 1 – 16
SUN MICROSYSTEMS
Model M3000 M4000 M5000 M8000 M9000
Processors 1 1–4 1–8 1 – 16 1 – 64
Dynamic domains 1 1–2 1–4 1 – 16 1 – 24
Granularity limitations affected configuration sizes for Integrity as well as M series servers. In
comparison, firmware-based LPARs allowed use of smaller partitions – granularity of up to 0.1 of a core
is supported – and Power server mechanisms for allocating and reallocating resources between these were
also more effective than HP and Sun equivalents.
As a result, system-level capacity utilization for hard-partitioned applications and databases was higher
for Power servers than for HP and Sun M series equivalents. Moreover, it was possible to employ LPARs
on comparatively small servers. LPAR capability is supported on all Power models.
(It is occasionally argued that nPars and dynamic domains allow for “electrical isolation,” which
increases reliability as well as security. In practice, however, users have not found availability levels to be
lower for Power servers, and LPARs provide comparable partition isolation for security purposes.)
Sun configurations were also affected by the fact that the company’s LDoms partitioning technology,
which enables software-based hosting of operating system instances, is supported only for the company’s
T series servers.
Superior price/performance levels for Power servers also contributed to lower costs for PowerVM
scenarios The Itanium2 processor architecture is aging, and lags far behind POWER6 in all major
industry performance ratings. Sun’s SPARC64 is generally recognized to be an even weaker design,
delivering even lower performance relative to Power servers for comparable configurations.
Higher system performance, as well as higher capacity utilization enabled by PowerVM, offset what
might otherwise have been a Power server disadvantage in database costs – Oracle license costs are
calculated at 0.5 of a processor for Itanium2, 0.75 for SPARC64, and 1.0 for POWER6 processors.
For all profile installations, however, five-year Oracle database license and support costs were
significantly lower for PowerVM than for HP VSE and Sun scenarios.
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12. Finally, HP as well as IBM platforms benefited from integrated system and workload management
capabilities that are, by wide margins, superior to those offered by Sun for Solaris servers. As a result,
Sun platforms suffered a penalty relative to Integrity and Power servers in comparative capacity
utilization levels.
Costs of Downtime
Costs of downtime for new UNIX system deployments were calculated in a manner similar to
conventional and Power virtualized scenarios for UNIX server infrastructure comparisons.
Results are summarized in figure 9.
Figure 9
New UNIX System Deployments: Five-year Costs of Downtime
COMPANY TELECOMMUNICATIONS DISTRIBUTION MANUFACTURING
HP VSE SCENARIOS
Availability levels 99.94% – 99.97% 99.97% – 99.98% 99.94%
Five-year costs ($000) 5,497.0 4,847.7 1,338.1
IBM POWERVM SCENARIOS
Availability levels 99.96% – 99.98% 99.97% – 99.98% 99.95%
Five-year costs ($000) 5,238.3 4,568.9 1,115.1
SUN SCENARIOS
Availability levels 99.93% – 99.97% 99.94% – 99.97% 99.92%
Five-year costs ($000) 8,877.3 6,377.1 1,784.2
In this presentation, availability levels again reflect hours of system-level uptime relative to annual hours
of operation of companies, or business areas within companies that are supported by specific applications.
Costs of downtime again represent lost gross profit, meaning profit net of cost of goods and/or services,
but before deduction of SG&A and other expenses.
Costs of downtime for the HP VSE and IBM PowerVM scenarios are generally similar. This reflects high
levels of hardware RAS and strong clustered failover offerings, along with capabilities for partition-based
software upgrades and maintenance, live partition movement between physical servers, and other
availability optimization functions for both vendors’ platforms.
Marginally higher costs of downtime for HP VSE scenarios for reflect slightly higher levels of planned
downtime for Superdome platform, as well as lower availability levels for secondary applications
deployed on other Integrity servers.
Costs of downtime for Sun scenarios were significantly higher than for HP VSE and PowerVM scenarios.
This reflects less effective hardware as well as software availability optimization across all Sun platforms.
Live partition movement, for example, is supported only for LDoms on Sun T series servers, which were
employed for secondary applications in the Sun telecommunications company scenario.
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13. DETAILED DATA
UNIX Server Infrastructure Comparisons
Installations and Scenarios
Comparisons of five-year costs for conventional and Power virtualized scenarios for UNIX server
infrastructures are based on the composite profile installations summarized in figure 10.
Figure 10
Profile Installations and Scenarios for UNIX Server Infrastructure Cost Comparisons
COMPANY FINANCIAL SERVICES MANUFACTURING RETAIL
Business Profile $400 billion assets $33 billion revenues $35 billion revenues
$15 billion revenues Consumer products Specialty chain
14 million customers 28 manufacturing plants 1,000+ outlets
1,650 branches 25 distribution centers 10 distribution centers
55,000 employees 50,000 employees 150,000 employees
Focus of 69 major applications 30 major applications 36 major applications
Comparisons System groups: System groups: System groups:
• Corporate systems • Core ERP systems • Corporate systems
• Retail banking • Supply chain management • Supply chain management
• Commercial banking • Product management • Logistics & transportation
• Financial services • Business intelligence • Marketing, sales & service
• Online systems • eProcurement • Business intelligence
• Intranet infrastructure • BPM, CRM, PLM • eCommerce
CONVENTIONAL SCENARIOS
Servers Hewlett-Packard Hewlett-Packard Hewlett-Packard
Superdome, rx8640, rx8620, Superdome, rx7640, rx7620, rx8640, rx8620, rx7620,
rx7620, rx6600, rx4640, rx6600, rx4640, rx3600, rx6600, rx4640, rx2660,
rx3600, rx2660, rx2620, rx2660, rx2620, rp8400, rx2620, rx2600, rx1600
rx2600, rp8420, rp8400 rp5470 IBM
IBM IBM pSeries 670, 650, 615
pSeries 690, 670, 650, 615 pSeries: 670, 650, 615 System p 570, 550, 520, 510,
System p 595, 570, 550, 510, System p 570, 550, 520, 510 505, 185
505, Power 570, BladeCenter Power 570 Sun Microsystems
Sun Microsystems Sun Microsystems E15K, E4900, E4800, V890,
E25K, E6800, E4900, E4800, E20K, E15K, V890, V880, V490, V480, V440, V250,
E2900, M4000, V890, V880, V490, V40Z, X4600, X4200, V240, V40Z, V20Z, X4600,
V490, V480, V40Z, X4600, X4100, X2000 X4500, X4200, X2000,
X4500, X4200, X4100, X2000, various
Blade 6000, various
Silicon Graphics
Altix 450
Total: 242 servers Total: 78 servers Total: 98 servers
Personnel 28 FTEs 13 FTEs 14 FTEs
POWER VIRTUALIZED SCENARIOS
Servers 9 x 570, 7 x 550, 3 x 520 5 x 570, 9 x 550 5 x 570, 5 x 550
3 x JS43, 16 x JS23 6 x JS23, 3 x JS12 3 x 520, 1 x JS43, 14 x JS23
5 x JS12, 2 x BladeCenter H BladeCenter H 8 x JS12, 2 x BladeCenter H
Totals: Totals: Totals:
43 servers 23 servers 36 servers
125 LPARs 58 LPARs 74 LPARs
106 WPARs 47 WPARs 69 WPARs
Personnel 15 FTEs 8 FTEs 9 FTEs
Profile installations were constructed using data on applications, server bases, configurations, utilization
and service levels, staffing and other variables supplied by 16 companies in the same industries and
approximate size ranges, with generally similar business profiles.
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14. Companies employed a variety of Hewlett-Packard, IBM, Sun and other servers employing HP-UX, AIX,
Solaris and other UNIX variants.
Using this data, two sets of scenarios were developed:
1. Conventional scenarios are based on data reported by the 16 companies, and are built around
diverse multivendor server bases that include different technology generations and systems
software versions. Conventional management and operating practices are employed.
2. Virtualized scenarios are for the same applications and workloads deployed on latest-generation
Power servers. Configurations for these scenarios were developed on a case-by-case basis within
major system groups. Where appropriate, multiple applications were configured on the same
physical servers using LPARs and/or WPARs.
In translating configurations employed in conventional scenarios into Power server configurations
employed in virtualized scenarios, the following approach was employed.
Power server configurations delivering performance equivalent to conventional scenario servers
were developed for each of the main applications in profile installations. Configurations were
developed for production and non-production instances.
Further calculations were undertaken to allow for the effects of virtualization. Nominal
configuration requirements were first determined for groups of instances were deployed on
separate servers, but represented realistic candidates for consolidation onto a single Power
physical server.
An overall utilization value reflecting realistic potential consolidation efficiencies was then
assigned to each group of instances, and allowance was made for other factors affecting capacity
requirements. The resulting configuration was then rounded to next largest capacity increment
offered by IBM; e.g., a nominal configuration of 3.3 x 4.2 GHz cores with 12.6 GB of RAM was
rounded to a 4 x 4.2 GHz 550 model with 16 GB of RAM.
Other hardware components were configured similarly. Allowance was made for use of other
PowerVM capabilities, including Virtual I/O Servers and Integrated Virtual Ethernet.
All installations and scenarios include database, application and, where appropriate, Web and intranet
servers; and production systems as well as non-production instances for functions such as development,
test, quality assurance and training. Clustered failover configurations are employed in conventional and
Power virtualized scenarios for systems requiring high levels of availability.
Financial services company scenarios include a variety of custom and packaged software solutions.
Manufacturing company scenarios are built primarily around SAP and complementary third-party
applications, including business process management (BPM), customer relationship management (CRM)
and product lifecycle management (PLM) solutions.
Retail company scenarios include a mix of applications from EXE Technologies, i2 Technologies, JDA
Software, Oracle (including PeopleSoft offerings) and other vendors. Costs of applications software were
not included in calculations.
IT Costs
For conventional scenarios, calculations are for operating costs only. These include hardware
maintenance, update and support subscriptions for systems and database software, along with personnel
and facilities costs.
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15. For Power virtualized scenarios, calculations are for operating costs, which include the same components,
along with costs of hardware and systems software acquisition for new servers. Hardware maintenance
costs are for 24x7 coverage.
For both sets of scenarios, systems software includes operating systems, virtualization software, clustered
failover solutions and related tools. For Power virtualized scenarios, systems software includes IBM AIX
6.1, PowerVM, PowerHA and – for BladeCenter configurations – BladeCenter Open Fabric Manager.
Costs for database update and support subscriptions are for Oracle databases and management tools.
Calculations do not include initial license costs. For Power virtualized scenarios, database costs are for
Oracle 11g equivalents. Calculations reflect the change in Oracle pricing for POWER6-based servers
announced in March 2009; i.e., calculations are based on a value of 1.0 processor.
Detailed breakdowns of IT costs are presented in figure 11.
Figure 11
Cost Breakdowns for UNIX Server Infrastructure Comparisons
COMPANY FINANCIAL SERVICES MANUFACTURING RETAIL
CONVENTIONAL SCENARIOS
Maintenance 4,819.7 2,775.8 1,612.5
Systems software support 1,990.7 598.8 537.1
Database software support 13,803.7 5,733.0 5,051.1
Personnel 16,623.0 7,717.8 8,311.5
Facilities 1,173.1 548.4 432.3
TOTAL ($000) 38,410.2 17,373.8 15,944.7
POWER VIRTUALIZED SCENARIOS
Hardware 2,025.5 1,345.1 1,086.3
Systems software 444.2 215.9 185.8
Acquisition costs (Subtotal) 2,469.8 1,561.0 1,272.2
Maintenance 461.4 251.1 215.6
Systems software support 1,122.0 303.8 234.2
Database software support 2,546.4 1,655.3 1,443.5
Personnel 8,905.2 4,749.4 5,343.1
Facilities 275.7 163.4 121.3
Operating costs (Subtotal) 13,310.8 7,122.9 7,357.8
TOTAL ($000) 15,780.6 8,683.9 8,629.9
Additional detail on the basis of calculations for personnel and facilities costs for these and other
comparisons may be found at the end of this section.
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16. Costs of Downtime
Costs of downtime for UNIX server infrastructures were calculated using industry- and company-specific
values assuming consistent levels of availability and business cost structures over a five-year period.
For the financial services company, costs of downtime consists primarily of lost transaction fees and
customer lifetime value (CLV) for outages affecting online banking, brokerage and other customer self-
service systems, along with CRM systems and Internet infrastructure servers supporting these.
Costs of downtime for the manufacturing company were calculated based primarily on outages affecting
the company’s core SAP ERP, supply chain management and procurement systems. For the retail
company, costs were calculated based on outages affecting the company’s supply chain systems as well as
Internet marketing, sales and customer service systems.
The impact of outages on the retail company’s Internet systems includes the effects not only of lost online
sales, but also of storefront sales lost because customers are unable to obtain information on products,
promotions, pricing, availability, store locations and other subjects.
Linux Server Infrastructures
Installations and Scenarios
Comparisons of five-year costs for x86 and Power Linux server infrastructures are based on the
composite profile installations and scenarios summarized in figure 12.
Figure 12
Profile Installations and Scenarios for Linux Server Infrastructure Cost Comparisons
COMPANY FINANCIAL SERVICES MANUFACTURING RETAIL
Applications Market value & risk analytics SAP xApps Internal portal, e-procurement
Equities trading, market data Computer aided design Promotional e-mail
Mortgage loans, antifraud Departmental applications Departmental applications
Departmental applications Software development & test Office applications
Content management File serving POS software development
Software development & test Web infrastructure, various File serving, fax serving
Intranet applications Network management
Intranet infrastructure, various Web infrastructure, various
x86 SCENARIOS
Servers Dell, HP, IBM HP, IBM Dell, HP, IBM, various
128 physical servers 29 physical servers 84 physical servers
56 VMs 15 VMs 30 VMs
Personnel 5.1 FTEs 1.05 FTEs 2.55 FTEs
POWER VIRTUALIZED SCENARIOS
Servers 3 x 550 4/8 x 4.2 GHz 2 x 520 2/4 x 4.7 GHz 2 x 550 4/8 x 4.2 GHz
4 x 520 2/4 x 4.7 GHz
185 LPARs 44 LPARs 120 LPARs
Personnel 2.15 FTEs 0.45 FTE 1.25 FTEs
The same companies are employed as for UNIX server infrastructure comparisons. Installation profiles,
however, are different. Application portfolios, server bases and staffing levels were developed using data
from 23 companies, including companies that, in some cases, did not supply UNIX server data.
International Technology Group 13

17. These companies employed x86 servers from Dell, HP (including Compaq), IBM and other vendors.
Bases included different hardware generations – ranging from Pentium 4-based servers installed in 2002
to recent Intel Xeon- and Advanced Micro Devices (AMD) Opteron-based servers – running Red Hat,
SUSE and other Linux distributions.
x86 server scenarios are based on user-reported data. Power server scenarios were developed, and
configurations sized in the same manner as for Power virtualized scenarios for UNIX server infrastructure
comparisons. PowerVM Standard Edition is employed on all Power servers.
It is assumed that Linux applications are deployed on Power servers in native mode in a manner that
effectively exploits the potential of PowerVM and that management and operating practices are
supportive of this potential.
IT Costs
For x86 server scenarios, calculations are for operating costs only. These include hardware maintenance,
and update and support subscriptions for VMware and Xen software, personnel and facilities costs.
For Power server scenarios, calculations are for operating costs, which include the same components,
along with costs of hardware acquisition and PowerVM licenses for new servers. Operating costs include
24x7 hardware and software maintenance.
Detailed breakdowns of IT costs are presented in figure 13.
Figure 13
Cost Breakdowns for Linux Server Infrastructure Comparisons
COMPANY FINANCIAL SERVICES MANUFACTURING RETAIL
x86 SERVER SCENARIOS
Maintenance 190.1 42.6 85.1
Virtualization software 20.6 4.1 6.2
Personnel 2,721.5 560.3 1,360.7
Facilities 225.2 82.4 154.5
TOTAL ($000) 3,157.4 689.4 1,606.5
POWER SCENARIOS
Hardware 232.0 26.0 92.8
Maintenance 50.8 8.2 20.3
Virtualization software 46.0 9.2 18.4
Personnel 1,147.3 240.1 667.0
Facilities 49.5 10.5 11.5
TOTAL($000) 1,525.6 294.0 810.0
For reasons discussed earlier, calculations do not include acquisition or ongoing costs for Linux operating
systems and databases.
International Technology Group 14

18. Costs of Downtime
Costs of downtime for Linux server infrastructure comparisons are for user productivity loss.
This was measured in terms of (1) idle time, reduced productivity or both for periods when applications
were not available to users during working hours and (2) reduced productivity following an outage; e.g., a
one-hour outage causing a 60 percent productivity reduction might be followed by a two-hour period in
which a 20 percent productivity loss occurs.
Productivity loss calculations were developed for each user community supported by Linux applications.
Costs are based on industry median salaries, benefits and other compensation for large U.S. financial
services, manufacturing and retail companies for the occupational groups using applications.
Productivity losses were quantified based on the number of individuals using each application who would
be affected by outages, their average remuneration per hour, and percentage values for reductions in their
productivity during and subsequent to outages.
New UNIX System Deployments
Installations and Scenarios
Comparisons of five-year costs for new UNIX system deployments are based on the composite profile
installations and scenarios summarized in figure 14.
Figure 14
Profile Installations and Scenarios for New UNIX System Deployments Comparisons
TELECOMMUNICATIONS COMPANY
BUSINESS PROFILE APPLICATIONS
$12 billion revenues CRM, billing, financial & operational systems,
20+ million customers data warehouse, application servers, identity
Fixed line, mobile, broadband & management, intranet, customer portal,
data network services development & test
20,000+ employees
CONFIGURATIONS
HP VSE SCENARIO IBM POWERVM SCENARIOS SUN SCENARIOS
2 x Integrity Superdome 2 x Power 595 2 x Enterprise M9000
64/128 x 1.6 GHz each 24/48 x 5.0 GHz each 56/224 x 2.52 GHz each
28 nPars + 80 vPars 110 LPARs 28 dynamic domains
rx8640 4 Virtual I/O Servers 52 Zones
12/24 x 1.6 GHz Power 550 2 x T5440
2 nPars + 15 Integrity VMs 4/8 x 5.0 GHz 4/32 x 1.4 GHz each
rx7640 2 LPARs + 15 WPARs 25 LDOMs
8/16 x 1.6 GHz Virtual I/O Server 3 x T5140
10 Integrity VMs Power 550 2/16 x 1.2 GHz each
2 x rx6600 4/8 x 4.2 GHz – 10 WPARs 20 LDOMs
4/8 x 1.6 GHz each 2 x Power 520 Solaris 10
20 Integrity VMs 2/4 x 4.2 GHz – 20 WPARs Third-party clustered failover
HP-UX 11v3 VSE AIX 6.1, PowerVM (M1000e) & system
Serviceguard (Superdomes) PowerHA (Power 595s) management tools
Oracle 11g, Enterprise Manager Oracle 11g, Enterprise Manager Oracle 11g, Enterprise Manager
Profile installations were constructed using data on applications, server and partition configurations,
utilization and service levels, and other variables supplied by 15 companies in the same industries and
approximate size ranges, with generally similar business profiles.
International Technology Group 15

19. Figure 14 (Continued)
DISTRIBUTION COMPANY
BUSINESS PROFILE APPLICATIONS
$7 billion revenues ERP, CRM, order management, warehouse
Chemical products distributor management, transportation management,
40 distribution centers business intelligence, procurement
10,000 employees
CONFIGURATIONS
HP VSE SCENARIO IBM POWERVM SCENARIO SUN SCENARIO
2 x Integrity Superdome 2 x Power 570 2 x Enterprise M8000
36/72 x 1.6 GHz – 4 nPars 12/24 x 4.2 GHz – 36 LPARs 16/64 x 2.52 GHz
30 vPars & Integrity VMs 2 Virtual I/O Servers 8 dynamic domains
32/64 x 1.6 GHz 8/16 x 4.7 GHz 16/64 x 2.4 GHz
6 nPars + 20 vPars 28 LPARs 4 dynamic domains + 31 Zones
2 Virtual I/O Servers Enterprise M5000
2 x rx7640
8/16 x 1.6 GHz – 2 nPars 2 x Power 550 8/32 x 2.4 GHz
8/16 x 1.6 GHz – 12 Integrity VMs 4/8 x 4.2 GHz – 2 LPARs 2 dynamic domains
HP-UX 11v3 VSE 4/8 x 3.5 GHz – 12 WPARs Sun Fire x4440
Serviceguard (Superdomes) AIX 6.1, PowerVM 4/16 x 2.5 GHz – 13 Zones
Oracle 11g, Enterprise Manager PowerHA (Power 570s) Solaris 10
Oracle 11g, Enterprise Manager Third-party clustered failover
(M8000s) & system
management tools
Oracle 11g, Enterprise Manager
MANUFACTURING COMPANY
BUSINESS PROFILE APPLICATIONS
$500 million revenues ERP, supply chain management, HRMS, business
Food & beverage products intelligence, development & test
6 manufacturing plants
35 distribution facilities
1,800 employees
CONFIGURATIONS
HP VSE SCENARIOS IBM POWERVM SCENARIO SUN SCENARIO
rx8640 2 x Power 550 Enterprise M8000
12/24 x 1.6 GHz 4/8 x 5.0 GHz 8/32 x 2.52 GHz
2 nPars + 6 vPars 10 LPARs 2 dynamic domains + 7 Zones
rx7640 2 Virtual I/O servers Enterprise M5000
8/16 x 1.6 GHz 4/8 x 4.2 GHz 8/32 x 2.4 GHz
2 nPars + 8 vPars 10 LPARs 2 dynamic domains + 9 Zones
rx6600 2 x Power 520 Sun Fire x4240
4/8 x 1.6 GHz – 9 Integrity VMs 2/4 x 4.7 GHz – 9 WPARs 2/8 x 2.7 GHz – 10 Zones
rx2660 1/2 x 4.2 GHz – 3 WPARs Sun Fire x4140
2/4 x 1.66 GHz – 3 Integrity VMs AIX 6.1, PowerVM 1/4 x 2.7 GHz – 4 Zones
HP-UX 11v3 VSE PowerHA (Power 570 & 550) Solaris 10
Serviceguard (rx8640 & rx7640) Oracle 11g, Management tools Third-party clustered failover
Oracle 11g, Management tools (M8000 & M5000) & system
management tools
Oracle 11g, Management tools
Companies employed HP Integrity, IBM Power and System p, or Sun Microsystems SPARC-based, T
series and x86 servers running HP-UX, AIX and Solaris operating systems respectively. All companies
employed Oracle databases.
International Technology Group 16

20. Where companies employed older versions of platforms, configurations were updated to current-
generation models using vendor or industry comparative performance data. Comparable configurations
were then developed of the other two vendors’ platforms based on industry comparative performance data
and partition granularity; e.g., if an IBM LPAR was sized to utilize 1.2 POWER6 cores, this would be
translated into the next-largest HP nPar or Sun dynamic domain increment.
A similar approach was employed for partitions utilizing shared resources. Comparative sizing was based
on the overall number of processors and amount of memory in the resource pool.
Where this approach was more cost-effective than use of dedicated adapters, Power servers are equipped
with one or (for redundancy purposes) two Virtual I/O Servers running in dedicated LPARs.
Configurations were equipped with operating systems, virtualization tools and, where appropriate,
clustered failover solutions. Software for Integrity servers included HP Virtual Server Operating
Environment (VSE-OE) Version 4.1, which includes HP-UX 11v3, and Serviceguard. Power servers were
equipped with AIX 6.1, PowerVM Standard or Enterprise Edition as appropriate, and PowerHA.
Sun servers were equipped with Solaris 10, which includes support for dynamic domains on M series
servers, LDoms on T series servers, and Solaris Containers and Zones on these and x86 servers; and a
widely used third-party clustered failover solution. Logical Domains 1.1 was employed on T series
servers.
Database servers were equipped with Oracle 11g Enterprise or Standard Edition, and Oracle Enterprise
Manager (for the telecommunications and distribution companies), or Diagnostics and Tuning Packs (for
the manufacturing company).
Telecommunications company scenarios include use of Amdocs, SAP, SAS, Siebel and proprietary
systems; distribution company scenarios include ERP, CRM and operational systems supporting multiple
business units; and manufacturing company scenarios include JD Edwards ERP and CRM systems. Costs
of applications software are not included in calculations.
Scenarios include development, test, and other non-production and production instances. Non-production
instances are in most cases deployed on failover servers.
IT Costs
For all installations and scenarios, calculations include acquisition, as well as hardware maintenance,
update and support subscription, and facilities costs. All hardware maintenance and software support
costs are for 24x7 coverage. For reasons discussed earlier, personnel costs are not included.
Calculations for Oracle database and management tool costs again reflect the company’s change in
pricing for POWER6-based servers announced in March 2009; i.e., calculations are based on a value of
1.0 processor.
Detailed breakdowns of IT costs are presented in figure 15.
International Technology Group 17

21. Figure 15
Cost Breakdowns for New UNIX System Deployment Comparisons
COMPANY TELECOMMUNICATIONS DISTRIBUTION MANUFACTURING
HEWLETT-PACKARD VSE SCENARIOS
Hardware 5,234.4 2,971.5 592.4
Maintenance 2,709.7 1,444.5 111.1
Systems software 1,164.8 753.5 197.2
Database software 6,552.0 3,822.0 1,186.5
Facilities 304.3 224.0 55.6
TOTAL ($000) 15,965.2 9,215.5 2,142.8
IBM POWERVM SCENARIOS
Hardware 3,159.4 1,195.3 174.9
Maintenance 891.7 141.7 20.8
Systems software 682.9 995.9 89.8
Database software 4,914.0 2,184.0 830.6
Facilities 174.9 120.4 33.8
TOTAL ($000) 9,822.9 4,637.3 1,149.9
SUN SCENARIOS
Hardware 7,588.1 2,726.4 627.5
Maintenance 591.1 276.5 110.1
Systems software 435.4 238.8 70.5
Database software 17,199.0 5,460.0 2,610.3
Facilities 501.6 281.3 102.1
TOTAL ($000) 26,315.2 8,983.0 3,520.5
Costs of Downtime
Costs of downtime for new UNIX system deployment comparisons were determined in the same manner
as for UNIX server infrastructures, using industry- and company-specific values assuming consistent
levels of availability and business cost structures over a five-year period.
For the telecommunications company, costs of downtime were calculated for outages affecting billing,
CRM, financial and operational systems, as well as customer-facing online applications. Calculations
include allowance for lost sales and CLV due to interruptions in call center as well as online customer
service.
For the distribution company, costs of downtime were calculated for outages affecting ERP, CRM, order
management, warehouse management, transportation management and procurement systems. For the
manufacturing company, the focus was on outages affecting the company’s ERP and CRM systems.
Allowance was also made in both cases for lost sales due to customer service interruptions.
International Technology Group 18

22. Cost Assumptions
Server Costs
For all comparisons, costs for server hardware acquisition and maintenance, and for software licenses,
and update and support subscriptions were calculated based on vendor list prices. These were discounted
to reflect prevailing “street” prices for installed bases and new deployments comparable to those in profile
installations.
Facilities costs include data center occupancy, power and cooling equipment and energy costs over a five-
year period. Occupancy cost calculations were based on EIA 42U rack mount units and service clearances
for these, plus allowance for inactive areas. A conservative assumption for annual cost per square foot for
existing facilities was employed (i.e., costs do not include new facilities construction).
Costs for power and cooling equipment were based on configurations of such equipment appropriate for
the servers employed in each installation and scenario. Costs were calculated for acquisition and
maintenance over a five-year period, using discounted list prices for equipment from leading vendors.
Energy costs were calculated using vendor electricity consumption values for servers, as well as power
and cooling equipment. Specific utilization levels and hours of operation for each profile installation were
applied, and a conservative assumption for average price per kilowatt/hour was employed to determine
five-year costs.
Personnel Costs
Personnel costs are for the numbers of full time equivalent (FTE) staff for system administration-related
functions shown in figures 10 and 12.
Calculations were based on annual salaries of $79,316 for AIX system administrators, as well as for
UNIX system administrators for other platforms for conventional scenarios for UNIX server
infrastructure cost comparisons; and $71,292 for Linux system administrators for x86 and Power servers
for Linux server infrastructure comparisons.
Salaries were increased by 49.7 percent to allow for benefits, bonuses, training and other personnel-
related overhead, and overall costs were calculated for a five-year period.
All values for server as well as personnel costs are for the United States.
International Technology Group 19

23. ABOUT THE INTERNATIONAL TECHNOLOGY GROUP
ITG sharpens your awareness of what’s happening and your competitive edge
. . . this could affect your future growth and profit prospects
The International Technology Group (ITG), established in 1983, is an independent research and
management consulting firm specializing in information technology (IT) investment strategy, cost/ benefit
metrics, infrastructure studies, deployment tactics, business alignment and financial analysis.
ITG was an early innovator and pioneer in developing total cost of ownership (TCO) and return on
investment (ROI) processes and methodologies. In 2004, the firm received a Decade of Education Award
from the Information Technology Financial Management Association (ITFMA), the leading professional
association dedicated to education and advancement of financial management practices in end-user IT
organizations.
The firm has undertaken more than 100 major consulting projects, released approximately 160
management reports and white papers, and delivered nearly 1,800 briefs and presentations to individual
clients, user groups, industry conferences and seminars throughout the world.
Client services are designed to provide factual data and reliable documentation to assist in the decision-
making process. Information provided establishes the basis for developing tactical and strategic plans.
Important developments are analyzed and practical guidance is offered on the most effective ways to
respond to changes that may impact or shape complex IT deployment agendas.
A broad range of services is offered, furnishing clients with the information necessary to complement
their internal capabilities and resources. Customized client programs involve various combinations of the
following deliverables:
Status Reports In-depth studies of important issues
Management Briefs Detailed analysis of significant developments
Management Briefings Periodic interactive meetings with management
Executive Presentations Scheduled strategic presentations for decision-makers
Email Communications Timely replies to informational requests
Telephone Consultation Immediate response to informational needs
Clients include a cross section of IT end users in the private and public sectors representing multinational
corporations, industrial companies, financial institutions, service organizations, educational institutions,
federal and state government agencies as well as IT system suppliers, software vendors and service firms.
Federal government clients have included agencies within the Department of Defense (e.g. DISA),
Department of Transportation (e.g. FAA) and Department of Treasury (e.g. U.S. Mint).
International Technology Group
4546 El Camino Real, Suite 230
Los Altos, California 94022-1069
ITG Telephone: (650) 949-8410
Facsimile: (650) 949-8415
Email: info-itg@pacbell.net