Counting the costs

Server technology is offering better price/performance ratios than previously. But what is the true cost of ownership of a next...

Server technology is offering better price/performance ratios than previously. But what is the true cost of ownership of a next generation server to your business? By Mark Turner

Server technology has changed rapidly in the past few years, making some impressive gains in price/performance. During the same period, price-per unit has been declining.

“Overall server performance has been improving at a rate of more than 150% a year, and price performance at a higher rate,” says Richard Fichera, vice-president of Forrester Research. But in an industry enthralled by innovation and eye-catching features, there has been relatively little discussion on how you can maximise your return on investment (ROI) from the latest batch of servers.

It’s a question that should be at the forefront of your mind.

The economic climate is still uncertain and after three years of cuts and freezes, IT spending in the UK has only recently begun a gradual recovery. The pressure to get a quick return on investment on IT is still intense.

“IT directors are under pressure to get a quick return on investment,” says Tikiri Wanduragala, IBM senior server consultant.

“Big projects of three to five years are rare. People are looking for quick fixes. Before we [the server industry] were trying to get the big issues of performance and reliability right, but now we have climbed that hill and the big issue is the management and control of that technology.”

Specialist software

You should use a range of technologies and methodologies to ensure you get decent ROI on new and forthcoming servers. Use blade servers to cram more machines into one room, consider using open-source software with your servers and use specialist software in order to calculate your ROI.

The challenge of calculating the return on IT investment (whether through increased performance, reduced costs or a boost to profits – has been a long-running one and for the latest breed of servers are no different.

Wanduragala says that one option is to draw up a formula to calculate the total cost of running the servers. One method is a ‘cost model’, which can bought as a service from a number of sources, including the major IT research companies, and often comes in spreadsheet form.

There are also other ways to calculate how your servers benefit your business, for example Portfolio Management Systems. This software judges and tracks the effectiveness of an IT system or project against a range of criteria including hardware and maintenance costs and the skills needed to maintain it.

However, to be effective in judging server performance and reducing running costs, a Portfolio Management System needs to have accurate and up-to-date information fed into it. Server technology itself can also provide a decent pay-back on investment.

Mark Blowers, senior research analyst at Butler Group, says, “Employees, trading partners, shareholders, customers and, increasingly, government agencies, all have distinct, often conflicting, expectations of what IT can do. Only through clear documentation and communication can the answers to these questions play a role in IT cost savings.”

Although there is a genuine need to produce IT cost savings, at some point the drive for cost reduction will undoubtedly begin to impact the service delivered, ultimately affecting the competitiveness of your organisation. Emerging server technology can also help you lower running costs.

The size of savings you can make from the new generation of servers (and how quickly they will come) is hard to predict, however. Much will depend on the type of software and hardware used with the servers.

Open source OS

Another way you can cut the cost of running servers is to run open source software, which does not require a licence fee.

Most of the big suppliers in the server market now offer servers that run on open-source operating systems. Suppliers are also beginning to offer more ‘intelligent’ servers, which warn of potential problems – such as a machine running out of disc space – further in advance.

IBM terms this technology autonomics. “Autonomics is almost like putting a radar system in,” says IBM’s Wanduragala. “Currently, most servers will use an alert system and autonomics technology is different as it can suggest a solution to the problem.”

It is still early days for such server technology and you may remain sceptical that suppliers can deliver on all their promises and agree the necessary technical standards to make significant costs savings possible. But the suppliers remain confident that given time they can deliver on their promises.

“As hardware and software become increasingly standardised workloads will become easier to handle, even as data grows in complexity and size,” says Alan Priestley, director of marketing for Intel’s enterprise server group. “This will make hardware far more efficient to manage, allowing costs to be optimised through increased effectiveness and productivity of management staff.

“Companies that choose a common hardware platform, such as Itanium, will be able to run multiple operating systems, such as Windows, Linux and Unix, to provide improved connectivity and easier implementation.”

This was last published in October 2004

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