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1 Server Migration from UNIX/RISC to Red Hat Enterprise Linux on Intel Xeon Processors: Lowering Total Cost of Ownership A Case Study

2 Published by: Alinean, Inc. 201 S. Orange Ave Suite 1210 Orlando, FL Tel: Fax: Web: September 2009 Copyright , Alinean, Inc. All rights reserved. No part of this report may be reproduced or stored in a retrieval system or transmitted in any form or by any means, without prior written permission. All other trademarks are the property of their respective owners Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO ii

3 EXECUTIVE SUMMARY... 1 METHODOLOGY... 2 ENERGY COMPANY CASE STUDY... 2 Server Hardware Configurations...2 Software Licensing...3 Systems Administration Labor Costs...5 Data Center Energy Costs...6 Upgrade / Migration Costs...6 Service Level Improvements...7 Financial Summary...7 HEALTH CARE CASE STUDY... 8 Server Hardware Configurations...8 Software Licensing...9 Systems Administration Labor Costs...9 Data Center Energy Costs Upgrade / Migration Costs Service Level Improvements Financial Summary CONCLUSION...11 Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO iii

4 EXECUTIVE SUMMARY Throughout the history of the computer industry technological advances have created significant shifts in the architecture and economics of prevailing systems. In the 1980s and 1990s we saw the proliferation of powerful UNIX/RISC-based servers eat into the traditional mainframe datacenter market. The replacement of mainframe workloads was fueled by the significant price performance difference between the systems. While mainframe vendors fought to preserve lucrative margins on hardware and software, the dominant RISC vendors, Sun, HP and IBM competed fiercely to increase system performance and lower price points. Now, the market may be shifting again and this time the UNIX/RISC systems are under assault. Over the past few years more powerful, cost effective x86-based servers running open source Linux have been increasing performance at a much faster rate than RISC-based servers. As Intel Xeon processors have increased in scalability and Red Hat Enterprise Linux has matured and gained enterprise-wide support there are signs that these lower cost solutions may be replacing traditional UNIX/RISC servers. With the latest release of the Intel Xeon processor 5500 series, Intel-based servers now offer comparable performance to mid-range RISC servers costing $150,000 at a fraction of the cost. This paper examines two case studies where organizations were recently faced with application upgrades. In both cases the organizations needed to upgrade aging systems to accommodate increased workloads and to take advantage of functional enhancements in the latest releases of packaged applications. The organizations each investigated the costs of simply replacing their legacy RISC-based servers with the latest generation of servers of the same architecture compared to migrating to x86-based servers running Linux. Both organizations found that by migrating to Red Hat/Intel solutions they could cut their costs by more than half compared to upgrading to newer versions of UNIX/RISC platforms. Not only were the Red Hat/Intel solutions much less expensive than alternative upgrade options, but in both cases the migration to Red Hat/Intel cut operational costs by over 50%, and the upgrades were able to pay for themselves in less than six months. Energy Company - Three Year TCO Health Care - Three Year TCO $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Original Server UNIX/RISC Solution Red Hat/Intel Solution $1,500,000 $1,000,000 $500,000 $0 Original Server UNIX/RISC Solution Red Hat/Intel Solution Three Year TCO Comparison Original Energy Company UNIX/RISC Solution Red Hat/Intel Solution Original Health Care Organization UNIX/RISC Solution Red Hat/Intel Solution Server Hardware Costs $331,320 $656,352 $57,000 $183,000 $429,600 $60,000 Server Software Costs $1,145,520 $3,159,360 $377,982 $670,080 $781,248 $419,076 Administrative Labor Costs $511,830 $342,220 $341,220 Excluded Excluded Excluded Facilities (Energy) Costs $256,294 $173,338 $28,323 $60,423 $37,764 $5,035 Migration Costs $0 $39,360 $44,200 $0 $91,480 $91,480 Total Three Year Costs $2,244,964 $4,369,630 $848,725 $913,503 $1,340,092 $575,591 Table 1: Three year TCO comparison Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 1

5 METHODOLOGY The cases described in this paper are based on interviews Alinean conducted with Intel and Red Hat customers. The analyses provided here are based on the assessments performed by the individual organizations. In some cases actual discounted pricing for software and hardware has been replaced with published list pricing to reduce the impact of vendor discounts from the analyses. The results presented in the paper are based on the specific requirements of these organizations. ENERGY COMPANY CASE STUDY The first case study involves a large energy company that needed to modernize its customer billing application. The application supported both browser-based access as well as several application programming interfaces for batch operations and integration with other core financial applications. Architecturally the application ran across three server tiers: a database tier, an application engine tier and a user interface tier. The new version of this application had been released recently based on Service Oriented Architecture (SOA) to provide more flexible integration with other applications. Given that the organization was planning on upgrading the application package, it decided to upgrade the server infrastructure at the same time. The current servers were already five years old and were running at over 90% system utilization during month end processing. In fact, the organization even disabled customer web inquiries for two days each month to reduce contention for resources needed for statement processing. This practice was originally initiated to reduce errors and delays in preparing and sending customer statements. Although turning off the web interface improved month end processing, it did not eliminate issues entirely, and it significantly increased telephone inquiries during the two days of shut down. The servers were long overdue for an upgrade. Another benefit of upgrading the server hardware along with the application software would be to simplify the conversion process. The new environment could be installed with data migration and system verification performed without disrupting the current systems. Once system verification of the new configuration was complete, the organization could simply switch over to the new systems and uninstall the existing servers. For the server upgrade, the organization considered replacing its current servers with either newer generations of its current Sun SPARC systems, or changing the architecture to Linux on x86-based servers. The organization thought it could reduce risk by staying with the same Solaris/SPARC architecture. However, when it performed the financial comparison, it found that the lower cost of the Red Hat/Intel solution would outweigh any potential risks. Server Hardware Configurations The original server configuration consisted of three tiers. Two Sun Fire v890 servers with eight dual-core UltraSPARC IV processors hosted the database tier. A cluster of 12 Sun Fire v490s with two dual-core UltraSPARC IV processors was used for the application engine tier, and 28 Sun Fire v240s with two singlecore UltraSPARC IIIi processors ran the user interface layer. Table 2 shows the server configurations, original purchase prices and annual hardware maintenance costs. Server Type Servers Cores per Server Memory per Server Purchase Price Annual Support Sun Fire v890 UltraSPARC IV GB $120,000 $13,200 Sun Fire v490 UltraSPARC IV GB $45,000 $4,950 Sun Fire v240 UltraSPARC IIIi GB $8,000 $880 Total All Servers GB $1,004,000 $110,440 Table 2: Original server configurations Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 2

6 The organization was looking to increase its current processing capacity by a factor of three to address current constraints, new application capabilities and future growth. It worked with engineers from the application provider and the server vendors to run benchmark tests for the proposed configurations. The recommended configuration for the Sun SPARC proposal consisted of six identical Sun SPARC Enterprise M5000 servers, each with eight quad-core SPARC64 VII processors and 64 GB of memory. Two of the servers would host the database layer, while the remaining four servers would support the rearchitected combined application and user interface tier. The Sun M5000 servers were originally priced at $150,000 a piece, but Sun offered aggressive discounts to bring the price down to $90,000 per server. For the Red Hat/Intel proposal the organization looked at a similar configuration of six identical HP ProLiant DL380 servers, each with two quad-core Intel Xeon processors X5560 and 64 GB of memory. The HP DL380 servers were priced at $9,500 each. Although the Sun M5000 servers each had eight quad core processors, the organization determined that two of the new Intel Xeon processor 5500 series-based servers provided almost the same performance at a fraction of the cost. This dramatic difference in price performance for the two alternatives made the decision for the organization almost a no brainer as illustrated in Table 3, which shows the total hardware costs for the two alternative configurations. Server Comparison Sun SPARC Solution HP with Intel Xeon Solution Server Model Type Sun SPARC Enterprise M5000 HP ProLiant DL380 G6 Number of Servers 6 6 Processors (8 x 4 core) - SPARC64 VII (2.4GHz) (2 x 4 core) Intel Xeon processor X5560 (2.8 GHz) Memory per Server 64 GB 64 GB Purchase Price per Server $90,000 $9,500 Annual Support per Server $6,464 Included Total Three Year Server Hardware Costs $ 656,352 $ 57,000 Table 3: Proposed server configurations Software Licensing The organization also found that the difference in processor counts between the Sun SPARC and HP Intel Xeon processor-based solutions became even a greater factor for software licensing and support costs. While the HP Intel Xeon processor-based solution reduced processor counts and annual support costs compared to the current configuration, the new Sun SPARC proposal actually increased processor counts, requiring additional software licenses and increasing annual software support costs. The major software components for the customer billing system included the billing application, operating system, database, and web application server. Because the customer billing application was priced on a customer account basis, the application license and support costs were the same for all server hardware configurations. Therefore the organization excluded this cost from the analysis. The current software configuration included the Sun Solaris 9 operating system for all servers, Oracle Database Enterprise Edition for the database servers and Oracle (formerly BEA) WebLogic Server Standard Edition for the application engine tier. Sun Solaris annual support is priced on a per server basis with pricing based on the number of processors (sockets) per server. Oracle licensing and support is based on the core count for individual servers multiplied by a processor core factor. The Oracle processor core factor for the current UltraSPARC and proposed SPARC64 processors is.75. The Oracle processor core factor for Intel Xeon processor is.5. Table 4 shows the software packages, license counts, and annual support costs for the original server configuration. Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 3

7 Original Server Configuration Sun Fire v890 Sun Fire v490 Sun Fire v240 Number of Servers Cores per Server Operating System Package Solaris 9 Solaris 9 Solaris 9 Operating System Licenses Annual Support per Operating System License $4,320 $1,080 $1,080 Total Annual Operating System Support $8,640 $12,960 $30,240 Database Package Oracle EE Database Licenses 24 Annual Support per Database License $10,450 Total Annual Database Support $250,800 Web Application Server Package Oracle WebLogic SE Web Application Server Licenses 36 Annual Support per Application Server License $2,200 Total Annual Application Server Support $79,200 Total Annual Software Support Costs $259,440 $92,160 $30,240 Table 4: Annual software support costs for original servers For the new Sun M5000 proposal both the Oracle Database and WebLogic Server would run on two of the new M5000 servers. Using Oracle s licensing policy for SPARC VII, each server would require 24 licenses 1, or 48 total licenses for both packages. Since the organization could transfer its existing 24 database licenses and 36 WebLogic licenses, it would need to purchase 24 new database licenses and 12 new WebLogic licenses. Table 5 shows the required license counts, new software purchases and annual software support for the proposed Sun SPARC upgrade. Sun SPARC Software Configuration Operating System Database Web Application Server Software Package Solaris 10 Oracle EE Oracle WebLogic SE Servers Licensed Total Licenses New Licenses Needed Purchase Price per License $47,500 $10,000 Total Software License Purchases $1,140,000 $120,000 Annual Support per License $4,320 $10,540 $2,200 Total Annual Software Support $25,920 $501,600 $105,600 Table 5: Additional software licenses and annual software support for Sun SPARC proposal For the HP DL380 configuration the only additional software licenses required were for VMware vsphere server virtualization software. The vsphere software enabled the organization to run several virtual machines on the application and presentation tier servers for improved scalability and throughput. (This same architecture would be deployed in the Sun SPARC configuration, but no additional charge would be required since Solaris 10 contains similar virtualization capabilities being provided by vsphere.) 1 Oracle calculates license counts by multiplying the total number of cores by a processor core factor. For SPARC VII this factor is.75. Each Sun M5000 has 32 cores, times.75 yields 24 licenses. Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 4

8 Since only eight licenses of Oracle Database and Oracle WebLogic were required for the HP DL380 configuration, no additional software licenses were needed. Red Hat Enterprise Linux Advanced Platform also did not require any upfront software licensing costs. Table 6 shows the required license counts, new software purchases and annual software support for the proposed HP DL380 upgrade. Software Configuration for HP with Intel Xeon processors Software Package Operating System Red Hat Enterprise Linux AP Database Oracle EE Web Application Server Oracle WebLogic SE Server Virtualization VMware vsphere Advanced Servers Licensed (or Subscriptions) Total Licenses / Subscriptions New Licenses Needed 8 Purchase Price per License $2,325 Total Software License Purchases $18,600 Annual Support per License/Subscription $2,499 $10,540 $2,200 $450 Total Annual Software Support $14,994 $83,600 $17,600 $3,600 Table 6: Additional software licenses and annual software support for HP with Intel Xeon processor proposal Table 7 shows that while the Sun SPARC upgrade would require $1,260,000 in upfront software licensing costs and almost double annual support costs compared to the current configuration. The proposed HP DL380 configuration would actually lower annual software costs by two thirds, saving over $750,000 over the three year analysis period. Three Year Software Cost Comparison Original Sun SPARC Proposal HP with Intel Xeon Proposal Savings over Sun SPARC Database License Costs $1,140,000 $0 $1,140,000 Web Application Server Licenses $120,000 $0 $120,000 Virtualization License Costs $0 $18,600 ($18,600) Total Software License Costs $1,260,000 $18,600 $1,241,400 Annual Operating System Support $51,840 $25,920 $14,994 $10,926 Annual Database Support $250,800 $501,600 $83,600 $418,000 Annual Web App Server Support $79,200 $105,600 $17,600 $88,000 Annual Virtualization Support $3,600 ($3,600) Total Annual Software Support $381,840 $633,120 $119,794 $513,326 Total Three Year Software Costs $1,145,520 $3,159,360 $377,982 $2,781,378 Table 7: Three year software cost comparison Systems Administration Labor Costs Although the organization expected the upgrade to significantly reduce fire fighting efforts to resolve issues relating to end of month processing, it preferred to take a conservative perspective on estimating the impact on required staffing. Due to budget constraints and the continual expansion of computing projects, the systems administration group had been asked to do more with less staff for several years. They were very sensitive to projections that server consolidation would reduce the need for headcount. Despite this resistance, IT management estimated that the upgrade project would reduce systems management requirements by one half of one administrator. This estimate was based on comparing the organization s current ratio of servers per administrator to the projected number of virtual machines for the new configuration. Currently the systems administration staff supported 28 servers per administrator. This resulted in an allocation of 1.5 headcount for the current 42 servers. The new configuration would only Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 5

9 have six physical servers, but the systems administration staff pointed to the increased number of virtual machines as justification for not decreasing headcount for this project below one full staff member. These servers were actually managed in a larger pool of servers by a group of administrators. The reduction in headcount requirements was expected to decrease pressures on adding staff for this group rather than eliminate a current position. Based on an average fully burdened annual salary of $113,740 per administrator, the upgrade was expected reduce annual costs by $56,870. Data Center Energy Costs In addition to increasing processing capacity, the organization was also hoping the server upgrade could help reduce energy requirements for the datacenter. Although the organization was in the energy business, it was actually running out of power and cooling capacity for its current data center. Reducing the electrical load on the datacenter could postpone a potential multi-million dollar expansion plan. Of the two alternatives the organization determined that the HP DL380 with the Intel Xeon processors was clearly superior from an energy consumption perspective. While the Sun M5000 upgrade proposal was able to reduce energy requirements by almost one third, the HP DL380 solution reduced energy consumption by nearly 90%, saving almost $76,000 in power and cooling costs per year. From an environmental perspective, the reduction in energy consumption would result in a decrease of approximately 532 tons of CO 2 per year, or the equivalent of eliminating the emissions of 88 cars per year. (On average cars produce 6 metric tons of CO 2 per year.) Table 8 shows the energy requirements for the current environment and two alternative proposals. Annual Energy Consumption Original Server Sun SPARC Solution HP with Intel Xeon Solution Server Count Average Power Consumption for All Servers (Watts) 40,720 27,540 4,500 Annual Operating Hours Data Center PUE Factor Annual Power Consumption (kwatts) 891, ,126 98,550 Average Price per kwh $ $ $ Annual Power and Cooling Costs $85,431 $57,779 $9,441 Average CO 2 Emissions (lbs/kwatt) Annual CO 2 Emissions (lbs) 1,195, , ,156 Table 8: Annual Energy Consumption and Cost Comparison Upgrade / Migration Costs In assessing the two server platforms the organization separated the costs associated with the application version upgrade for the customer billing system from the system installation and verification costs for the servers. Comparing just the server migration costs the two alternatives were nearly identical. The organization estimated external professional services fees for installation and configuration assistance at $20,000 for both solutions. This would cover two consultants at $2,000 per day for one week. Additionally, the organization scheduled 320 hours of internal labor for system setup and verification. Although the systems engineers believed that migrating to Linux would not require any more effort than upgrading to newer Sun Solaris servers, the project manager allocated an additional week, or 80 hours total 2 PUE Power Usage Effectiveness is the measure of energy required by the data center as a whole for each unit of energy delivered to servers. This measure includes cooling and other data center equipment. Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 6

10 for two engineers, for the HP/Linux proposal. Using an average fully burdened hourly rate of $60.50 for internal IT staff the organization assessed internal labor for the project at $24,200 for the HP with Intel Xeon processor / Red Hat Enterprise Linux solution and $19,360 for the Sun SPARC/Solaris upgrade. The total migration costs of $39,360 for the Sun SPARC/Solaris solution and $44,200 for the Intel Xeon/Red Hat solution are seen in Table 9. Service Level Improvements Although the organization expected the upgrade to significantly improve month end processing it elected not to include any financial estimates of savings in its analysis. Areas of improvement included reductions in billing related telephone inquiries, reduced systems support effort and faster collection on properly processed billing statements. Financial Summary Since the initial investment for new servers, virtualization software and professional services was only $119,800, the project had an immediate payback based on the cost avoidance of cancelling the annual support contracts for the server hardware and software. The migration project was able to lower annual operating costs by just over $500,000, or 68% per year. Based on the total investment for the project of $130,600 the projected three year return on investment was an impressive 1,069%. Three Year TCO Comparison Original Sun SPARC Proposal HP with Intel Xeon Proposal Savings Over Original Server Hardware Costs $331,320 3 $656,352 $57,000 $274,320 83% Server Software Costs $1,145,520 $3,159,360 $377,982 $767,538 67% Administrative Labor Costs $511,830 $342,220 $341,220 $157,500 33% Facilities (Energy) Costs $256,294 $173,338 $28,323 $227,971 89% Migration Costs $0 $39,360 $44,200 ($45,400) n/a Total Three Year Costs $2,244,964 $4,369,630 $848,725 $1,396,239 62% Table 9: Three year TCO comparison Annual Cash Flow Comparison $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Year 1 Year 2 Year 3 Original Server Sun SPARC Solution HP Intel Xeon Solution Chart 10: Annual cash flow comparison 3 Server hardware costs for the original environment only include annual maintenance and not capital costs for servers. Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 7

11 HEALTH CARE CASE STUDY The second case study involves a regional health care provider that needed to upgrade its patient records system. The current system was originally implemented in late In early 2007 the organization nearly doubled in size from a large merger. Late in 2007 the organization migrated the patient records from the other provider onto a single system. Since this system was originally sized for half of the workload it was now supporting, performance was becoming an issue. The organization had been holding off on upgrading the servers because it was waiting for a new version of the software application. It knew that extensive system verification would be required for any changes it made. Since the merger had already overwhelmed the IT staff, they preferred to upgrade the hardware along with the application software. Now that the new release was available, they were ready to move forward. Like the energy company, the health care provider investigated the costs of staying with its current UNIX/RISC-based configuration compared with migrating to a Red Hat and Intel solution. The financial analysis below shows that the Red Hat and Intel proposal was less than half of the total cost of the UNIX/RISC upgrade proposal over the three year analysis period. Server Hardware Configurations The original server configuration contained two RISC-based servers for the database tier and eight RISCbased servers for the application transaction tier. Both of the database servers were configured with four dual-core RISC processors and 48 GB of memory. Each of the application servers was configured with a single dual-core RISC processor and 8 GB of memory. Table 11 shows the configurations, purchase prices and annual hardware maintenance costs for the organization s original servers. Server Type Servers Cores per Server Memory per Server Purchase Price Annual Support Database Tier Servers GB $230,000 $25,300 Application Tier Servers GB $11,800 $1,300 Total All Servers GB $554,00 $61,000 Table 11: Original server configurations The recommended configuration for the RISC-based upgrade proposal consisted of four servers, each with four dual-core RISC processors and 64 GB of memory. Two of the servers would host the database layer, while the other two servers would support the application layer. The list price for the RISC-based servers was approximately $120,000, but the RISC offered to reduce this price to $90,000. For the Red Hat and Intel proposal the organization looked at a similar configuration of four identical IBM HS22 BladeCenter servers, each with two quad-core Intel Xeon processors X5570 and 64 GB of memory. The HS22 BladeCenter servers were priced at $15,000 each. Table 12 shows the configurations for the two alternatives with the purchase prices and annual hardware maintenance. Server Comparison RISC/UNIX Upgrade IBM with Intel Xeon Solution Server Model Type RISC-based mid range server IBM HS22 BladeCenter Number of Servers 4 4 Processors (4 x 2 core) RISC (5.0 GHz) (2 x 4 core) Intel Xeon processor X5570 (2.93 GHz) Memory per Server 64 GB 64 GB Purchase Price per Server $90,000 $15,000 Annual Support per Server $5,800 Included Three Year Server Hardware Costs $ 429,600 $ 60,000 Table 12: Proposed server configurations Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 8

12 Software Licensing Although the two upgrade configurations both had the same number of cores per server, software licensing policies made the UNIX/RISC-based upgrade option more expensive than the solution based on Intel Xeon processors. The original servers were all running UNIX, with high availability clustering software. The larger servers were running a UNIX database, while the smaller application servers were each running a J2EE web application server. Moving forward the organization would retain this configuration for both of the proposed server upgrades with the UNIX data on two of the servers and the J2EE web application server on the other two servers. The only difference between the alternatives would be that the HA clustering software would not be required for the Red Hat and Intel configuration, since this high availability clustering capability is included with Red Had Enterprise Linux Advanced Platform. By migrating to the Red Hat and Intel configuration the organization was able to reduce annual software support costs by $83,668, or 37% per year. Table 13 shows the breakdown for software packages, licensing levels, license values and annual software support for the three configurations. Annual Software Support Comparison Original Server RISC/UNIX Upgrade IBM HS22 Intel Xeon Solution Number of Servers Total Cores Operating System Package UNIX UNIX Red Hat Enterprise Linux Operating System Licenses/Subscriptions Annual Support per Operating System License $550 $550 $2,499 Total Annual Operating System Support $17,600 $17,600 $9,996 High Availability Clustering HA Cluster HA Cluster Included in OS High Availability Clustering Licenses Annual Support per HA Clustering License $640 $640 $0 Total Annual HA Clustering Support $20,480 $20,480 $0 Database Package UNIX Database UNIX Database Linux Database Database Licenses Annual Support per Database License $8,100 $9,720 $5,670 Total Annual Database Support $129,600 $155,520 $90,720 Web Application Server Package J2EE Web Server J2EE Web Server J2EE Web Server Web Application Server Licenses Annual Support per Application Server License $3,480 $4,176 $2436 Total Annual Application Server Support $55,680 $66,816 $38,976 Total Annual Software Support Costs $223,360 $260,416 $139,692 Table 13: Software support cost comparison Note: Although the server upgrade would technically require license upgrades, the vendor was willing to waive these fees. All current software licenses were available for transfer to the new servers at no additional charge. Systems Administration Labor Costs The organization did not believe that the upgrade would have a measurable impact on systems administration requirements and elected to exclude any efficiency improvements from the financial analysis. Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 9

13 Data Center Energy Costs Another factor favoring the Xeon-based solution for the organization was the potential for reducing power and cooling consumption for the datacenter. Although the magnitude of the financial benefits were not overwhelming, as a health care provider, the organization was interested in lowering its impact on the environment in any way it could. By reducing the number of servers and moving to more energy efficient BladeCenter technology the organization expected to reduce energy requirements by an impressive 92% saving $18,463 per year. The UNIX/RISC upgrade option was only projected to reduce energy consumption by 38%. Table 14 shows the energy requirements for the current environment and two alternative proposals. Annual Energy Consumption Original Server UNIX/RISC Upgrade IBM HS22 Intel Xeon Solution Server Count Average Power Consumption for All Servers (Watts) 9,600 6, Annual Operating Hours Data Center PUE Factor Annual Power Consumption (kwatts) 210, ,400 17,520 Average Price per kwh $ $ $ Annual Power and Cooling Costs $20,141 $12,588 $1,678 Average CO 2 Emissions (lbs/kwatt) Annual CO 2 Emissions (lbs) 281, ,207 23,494 Table 14: Annual Energy Consumption and Cost Comparison Upgrade / Migration Costs For the upgrade the organization planned one week for server installation and configuration, two weeks for the application installation and data migration, and eight weeks for system verification. It dedicated two systems engineers for this 11 week period. The organization also budgeted $40,000 for external assistance with the application upgrade and training. Overall the upgrade and migration costs were estimated at $91,480 for either upgrade alternative. Service Level Improvements The organization expected the upgrade to simplify the integration of new applications with the patient records system, but it did not expect much change in systems availability. Financial Summary As Table 15 illustrates the organization expected to modernize its systems, increase computing workload and cut total costs over three years by 37% by migrating off its older RISC-based systems onto new Intel Xeon processor-based IBM BladeCenter servers running Red Hat Enterprise Linux. The initial investment of $151,480 for new servers and upgrade costs paid for itself in six months by reducing hardware and software support costs and lowering energy consumption. For the three year analysis period, the upgrade project delivered $337,912 in cost savings, resulting in a 223% return on investment (ROI). Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 10

14 Three Year TCO Comparison Original UNIX/RISC Upgrade IBM HS22 Intel Xeon Solution Savings Over Original Server Hardware Costs $183,000 $429,600 $60,000 $123,000 67% Server Software Costs $670,080 $781,248 $419,076 $251,004 37% Facilities (Energy) Costs $60,423 $37,764 $5,035 $55,388 92% Migration Costs $0 $91,480 $91,480 ($91,480) n/a Total Three Year Costs $913,503 $1,340,092 $575,591 $337,912 37% Table 15: Three year TCO comparison The annual cash flow comparison of the alternative solutions below shows the Xeon-based BladeCenter solution pays for itself in the first year and cuts on-going operating costs in later years in half, 53%. The RISC-based upgrade option, on the other hand, more than doubles costs in year one and barely reduces on-going costs in later years, resulting in higher total costs rather than a net savings. $800,000 $600,000 $400,000 $200,000 Annual Cash Flow Comparison $0 Year 1 Year 2 Year 3 Original Servers UNIX/RISC Upgrade IBM HS22 Intel Xeon Chart 16: Annual cash flow comparison CONCLUSION As the price performance advantage of Intel Xeon processor-based servers continues to grow over RISCbased systems and the scalability of Intel Xeon-based systems increases, organizations are looking more to these systems for lowering IT costs. The maturity of open source Red Hat Enterprise Linux is further driving this trend with features including virtualization, clustering and high availability mission critical support. This combination of lower costs and improved reliability are generating a snowball effect in the market where many independent software vendors (ISVs) are now supporting Red Hat and Intel as a Tier 1 development platform, further expanding the adoption of this platform. The case studies in this paper show that the Red Hat and Intel upgrade options were not only less expensive than alternative UNIX/RISC proposals, but they actually reduced on-going operational costs and provided a lower total cost of ownership than maintaining the original configurations. The energy company was able to cut costs by an impressive 62% and the health care organization was able to reduce costs by a respectable 37%. In both cases the largest area of savings came from reduced software support costs. Since infrastructure software is often priced per processor, upgrading to faster processors results in greater value from each software license. The low initial hardware investment in each case also contributed to lower overall hardware costs. In both cases the new hardware purchases paid for themselves in less than a year compared to the annual hardware support costs for the legacy servers. The server upgrade/consolidation projects not only delivered financial benefits, but they also reduced energy consumption resulting in lower CO 2 emissions. In fact, on a percentage basis the greatest area of savings came from reduced energy consumption. Server Migration from UNIX/RISC to Red Hat/Intel: Lowering TCO 11

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