Date: May 4, 2002
Tired of nursing older systems and the boss says we can't afford to replace it? Or maybe your company is downsizing and its between you and the server farm. Or possibly you want to "justify your existence."
If you are in any of these situations, you might consider replacing your "tired iron" with a new system that reduces the total cost of ownership. The attached financial analysis I did for a local grocery store chain shows how this can be done. This analysis shows they can reduce their cost of ownership of a paid-off RS/6000 R50 by at least 10%, simply by replacing it with a new 6C1 model. I say "at least 10%" because I've only included the easily quantified benefits. The other benefits, such as increased reliability and reduced software maintenance costs could easily exceed the 10% savings I've identified
Sound too good to be true? Not really. Here's why.
Software Cost: CPU performance has doubled roughly every 12-18 months since the 1960's. You can now do more with fewer CPU's. In this case, we were able to go from 6 to 1 CPU, and provide the same TPC-C performance. Reducing CPU's reduces software price and maintenance costs, which are often based on the number of CPU's.
Support Costs: as a computer system ages, it's reliability declines. This means you pay more in maintenance costs, administrator time and lost revenue due to outages.
Environmental Costs: new technology (like copper chips) use less power, cooling and floor space. In the current analysis, the power savings may seem to be small. However in the bigger picture, if your data center is running out of floor space, or you need to buy another UPS or power supply, replacing/consolidating older systems is much cheaper.
Finally, in this example I've justified a 1:1 replacement of an R50 with a 6C1. In most cases a 1:1 replacement can't be justified financially. To justify, you'll need to consolidate multiple servers (N:1). In the past, many administrators have been reluctant to consolidate applications on one server because they couldn't guarantee Service Levels. However with integrated tools such as Work Load Manager, this should be less of a concern.
Bruce Spencer,
baspence@us.ibm.com