An Oracle White Paper June Cutting Cost through Consolidation

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1 An Oracle White Paper June 2011 Cutting Cost through Consolidation 1

2 Executive Overview Technology underpins both local and central government, providing the platform upon which virtually all services are offered both internally and to citizens. In its March 2011 Government Information and Communications Technology (ICT) Strategy paper 1 the Cabinet Office recognises that ICT is vital for the delivery of efficient, cost-effective public services. With the current emphasis on reducing the structural deficit ICT provides an opportunity for significant cost savings to be made both in the short term and longer time horizon, as well as the opportunity to deliver on the Cabinet Office objective of better public services at less cost. Therefore it is clear that any cuts in Information Technology (IT) spending are not to compromise the levels of service. Cuts within IT budgets can only justifiably be seen as true cost saving if the burden is merely being transferred to manual process, this is where ICT consolidation is seen as a key tool. 1 2

3 Consolidating project management data with Oracle s Primavera Portfolio Management keeps our Investment Programme on track, while delivery maximum value for travelers and tax payers. David Hartley, Investment Programme Management Office, Transport for London Introduction Consolidation of IT infrastructure, whilst bringing with it political and logistical challenges, offers significant propensity for cost reduction whilst at the same time providing significantly improved operational capability. Government should consider consolidation not as a one off exercise with the inherent risks and capabilities associated with large-scale public sector ICT projects. Instead consolidation is about an on-going change of methodology towards one of re-use an open, scalable platform, adding capacity as needed to ensure that departments, agencies and public bodies make maximum re-use both of the infrastructure, but also the design patterns already laid down by others. This is another critical area in which consolidation offers significant savings, in creating the initial consolidation infrastructure design work will be carried out to ensure that appropriate security, availability, performance, and management efficiency are baked in to the very fabric of the solution. Once these architectural patterns, which align to the UK Government s target for Definitive Software Library (DSL) and Application Portfolio Management (APM), have been created new projects or services can simply take these off the shelf and therefore reduce on-going design time costs. A key element to successful consolidation is moving from asking departments how they want ICT provided, to instead asking what it is they want provided; something emphasised by the Cabinet Office who suggest that it is better to specify outcomes rather than inputs 2. The move to a well defined, standardised, and open systems based consolidated ICT infrastructure helps to further the objects of the Cabinet Office ICT strategy by removing the barriers that SME organisations face when entering the market. Removing complex bespoke designs and creating a consistent environment from which ICT is delivered eliminates the current state of reliance on large System Integrators. Oracle Corporation is capable of offering a true end-to-end enterprise technology stack, ranging from the physical servers and storage, through operating system, database, middleware and Enterprise Applications to the desktop presentation itself. 2 Cabinet Office Government ICT Strategy

4 Not only can Oracle provide consolidation of components at each ICT layer, but as a single vendor offers the capability for consolidation at support, procurement and contract level, driving further cost reduction. This theme of exploiting government procurement scale is one that is brought out in the Cabinet Office Government ICT Strategy document. Government will therefore aim to become a single and effective ICT customer which will leverage its considerable buying power to drive down the operating cost of its ICT Cabinet Office Government ICT Strategy March 2011 By having a single vendor support model, costs are reduced through operational efficiencies as well as reducing the overhead associated with managing multiple vendor support relationships and interactions. This is significantly different to a support position where a System Integrator offers a single point of contact for support but will be having to deal with multiple vendors internally, and be passing this cost on directly to the department contracting their resources. The rewards of physical server virtualisation have been discussed in numerous papers, and will undoubtedly form a vital cog in government ICT strategy. However, consolidation should drive not just a reduction in physical equipment, easily achieved with server virtualisation, but also a reduction in the service catalogue" of offerings within the DSL and APM. To achieve a true step change in ICT it is not enough to simply virtualise servers and reduce the number of pieces of physical equipment; this simply replaces physical server sprawl with virtual server sprawl. Transformational change is achieved by looking further; reducing the number of operating systems, databases, and middleware components; consolidating onto a more limited set of versions of each that are supported; and by reducing the number of vendors involved. Oracle Exadata and Oracle Exalogic platforms can facilitate this step change. By providing a virtualised environment at physical server level but also consolidating database and applications within environments that are pre-built, pre-configured, pre-integrated and designed to provide the most efficient platform possible, ensuring maximum compute density from investment. Andy Tait, Deputy Chair for G-Cloud, Apps Store and Data Centre Consolidation for the Cabinet Office pointed out that There are 90,000 servers across central government alone and they run at less than 10% utilisation. By considering Oracle Exadata and Oracle Exalogic as standard units of computing power, into which services are consolidated, government procures hardware only when current capacity is exceeded, increasing utilisation rates, reducing overall power requirements with the associated cost and CO2 implications, and reducing server sprawl. I want us to be the greenest government ever. A very simple ambition and one that I m absolutely committed to achieving. Over the next 12 months government departments have to reduce their carbon emissions by 10%. David Cameron Prime Minister 4

5 Cloud computing is the latest paradigm within the IT industry and drawing parallels with this is useful, especially as exploiting Cloud computing is a stated government ICT objective. In Cloud computing, especially Software as a Service (SaaS) or Platform as a Service (PaaS), concern is not given to the hardware, disks subsystem type, operating system, and other underlying components used to actualise a service, but rather with the output of the service itself. Key to enabling successful consolidation is that government ICT is consumed in a similar manner, with an approach of "tell us what you want done", as opposed to allowing departments to dictate how and from whom. This move by the UK Government to Cloud computing mirrors that of the US Government who have estimated Cloud computing and consolidation can help them achieve $14.4bn of savings in year one 3 Oracle allows government to manage the complexities associated with consolidation of preexisting ICT, especially on the scale required by the public sector. The benefits of standardised design patterns and deployments are clear, but inevitably some pre-existing systems will be migrated unchanged into a consolidated infrastructure as Data Centre rationalisation occurs. In these circumstances Oracle still provides the ability for value to be derived, with examples including; Technologies such as Oracle Advanced Compression and Oracle Partitioning that minimise the storage footprint reducing associated costs and CO2. Improved IT operational efficiencies and automatic scanning of existing systems for conformance to ICT policy, such as security and configuration, ensuring that legacy systems do not pollute the new infrastructure through Oracle Enterprise Manager. Technologies such as Oracle SOA Suite that abstract and expose legacy architecture, allowing other systems to interface with it and ensure it is no longer a silo that is closed off from other applications. 3 5

6 Conclusion Consolidation is without doubt one of the most effective ways for government to look to cut costs and improve service delivery within ICT. However, to make a step change in the way public sector ICT is delivered government must look beyond simple physical server virtualisation solutions and enable a strategic platform that provides a next generation architecture. Consolidation should encompass standardised patterns, open systems, and enable further objectives such as breaking the reliance on System Integrators and allowing SMEs into the market place. Oracle, a long-term exponent of utility computing with proven technologies in this area, provides capabilities to standardise, consolidate, unlock legacy IT, and upon which governments Cloud computing objectives can be built. 6

7 Cutting Cost Through Consolidation June 2011 Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA U.S.A. Worldwide Inquiries: Phone: Fax: oracle.com Copyright 2011, Oracle and/or its affiliates. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners. AMD, Opteron, the AMD logo, and the AMD Opteron logo are trademarks or registered trademarks of Advanced Micro Devices. Intel and Intel Xeon are trademarks or registered trademarks of Intel Corporation. All SPARC trademarks are used under license and are trademarks or registered trademarks of SPARC International, Inc. UNIX is a registered trademark licensed through X/Open Company, Ltd. 1010

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