DECK IBM s05 ZEnterprise Economics

zEnterprise Economics
David Rhoderick
IBM SWG
April 2011
Agenda
I. Mainframe TCO Characteristics
II. zEnterprise Economics

Cost Per Workload Examples
Why zBX is better than do-it-yourself
zEnterprise Economics April 2011 2

I. MAINFRAME TCO
CHARACTERISTICS

Mainframe Economics
Mainframe Cost Per Unit of Work Goes Down as Workload Increases
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Distributed scale out
~ 200 MIPS
Data Center Workload

TCO Top Down Methodology
1. Establish Equivalent Configurations
Processor
Processor
= Processor
Processor
Processor
2. Price out Total Cost of Acquisition
3. Add cost of labor and environmentals

1. Banking Benchmark Comparison
Kookmin Bank
IBM System z9 and DB2
System z can process over 55M
TCS BaNCS transactions/hour, and 380M accounts
15,353 Transactions/second
50 Million Accounts
System z and BaNCS Online Banking Benchmarks
IBM benchmark for customer 16,000
transactions per second (tps)

15,353
Bank of China **
IBM System z9 and DB2 12,000
TCS BaNCS HP maximum benchmark 10,716
9,445*** Transactions/second 9,445
380 Million Accounts 8,983
IBM benchmark for customer 8,000 8,024
7,443
6,622
5,723
4,665
4,360
State Bank of India* 4,000
3,120
HP Itanium Superdome 2,603
TCS BaNCS 1,589
10,716 Transactions/second
0
500 Million Accounts
Largest banking benchmark 0 10,000 20,000 30,000 40,000 50,000
performance claimed by HP
MIPS
* SOURCE: Clement Report; http://h20195.www2.hp.com/v2/GetPDF.aspx/4AA1-4027ENW.pdf Feb 2010
** SOURCE:http://www.enterprisenetworksandservers.com/monthly/art.php?2976 Source: InfoSizing FNS BANCS Scalability on IBM System z Report Date: September 20, 2006
*** Standard benchmark configuration reached 8024 tps, a modified prototype reached 9445 tps

Compare The Processors Needed To Achieve
10,716 Transactions Per Second (with System z196)
BaNCS Application Servers: TCS BaNCS
8x HP Superdome (16ch/32co) 1x z196-742
42 processors
(31,675 MIPS)
448 processors
BaNCS Database Servers: (1,834,300 RPEs)

4x HP Superdome (24ch/48co)
57.6 RPEs per MIPS
Note: Both platforms scaled to the same performance rating (10,716 tps)

Compare The Processors Needed To Achieve 10,716
Transactions Per Second (with System z196) with Dev/QA
BaNCS Application Servers: TCS BaNCS

16x HP Superdome (16ch/32co) 1x z196-756
56 processors
(40,313 MIPS)
996 processors
BaNCS Database Servers: (3,143,360 RPEs)

8x HP Superdome (24ch/48co)
92.2 RPEs per MIPS

NOTE: Double Distributed
Servers, add 1,000 MIPS
to System z for Dev/QA
Note: Both platforms scaled to the same performance rating (10,716 tps)

Lesson Learned
It takes far more processor cores to deploy on an HP
distributed platform
Performance Units per MIP have ranged from 87 to 670
A typical number is 122
Performance Unit Capacity for various distributed servers

can be found in the Server Consolidation Analysis Report
from Ideas International

US Bank Study Shows WebSphere Process
Server On Sun Costs 5.8X More Than System z
Currently 3 distributed Sun servers running WebSphere workload
Compare running same workload on IBM System z10 using zLinux or z/OS
Scope
1. Cost HW, SW, Power, and Floor Space, but NOT labor
2. Discipline Production, QA, Development/Test, and DR
3. Five Year TCO including HW acquisition in 1st and 4th year
4. 3033 MIPS of workload on z/OS
5. 3791 MIPS of workload on Linux for System z
$35.0 Accumulated Cost
Distributed TCO is $30.0
$21,214,907 (3.8X) more
$25.0
expensive than z/OS over 5 z/OS solution
(USD$M)
years $20.0
SUN M8000 solution
Cost
$15.0
Distributed TCO is Linux on system z
$23,802,441 (5.8X) more $10.0

expensive than Linux for
$5.0
System z over 5 years
$0.0
Year 1 Year 2 Year 3 Year 4 Year 5
Case Studies Demonstrate Consistent
TCO Advantage
Distributed Cores vs. Paid Core
Scenarios Cost of Distributed vs. z Cost Ratio z Processors Ratio
Deploy New Applications on
Mainframe
Database Server $6.4M vs $5.0M 1.3x 60 vs 4 15 : 1
WebSphere Application $7.4M vs $3.0M 2.4x 132 vs 4 33 : 1
Data Warehouse $8.4M vs $4.7M 1.8x 120 vs 6 20 : 1
Data Warehouse w Analytics $13.4M vs $8.4M 1.6x 160 vs 8 20 : 1
Communications Backbone $5.5M vs $4.2M 1.3x 64 vs 4 16 : 1
SOA Solution $17.2M vs $3.5M 4.9x 132 vs 4 33 : 1
SOA Solution vs Sun $34.2M vs $3.5M 9.8x 252 vs 4 63 : 1
Spatial Database Server $6.9M vs $5.0M 1.4x 120 vs 6 20 : 1
Major Retailer $8.3M vs $7.0M 1.2x 22 vs 5 4.4 : 1
2.9x 25 : 1
Rule of Three:
The cost of deploying a new application will usually be less on a
mainframe if:
1. It is an incremental workload on an existing mainframe
2. It can make use of a specialty processor
3. Disaster recovery is required
What % Of The Average IT Bill Does The
Mainframe Comprise?
Mainframe Cost as a % of IT Cost
Source: Gartner IT Metrics Data (December 2010)

And How Much Does 1 MIPS Cost?

In 2007, 1 MIPS Costs $3K Upwards
Cost Item Low Range High Range Explanation
Hardware $344 $800 Use of specialty processors
Software - IBM $744 $2,500 Volume discounts, specialty
processors
Software - ISV $1,500 $2,500 Percentage of ISV software
Networking $8 $125 Site Dependent
Labor $320 $2,560 Economy of Scale, Degree of
Automation
Power $5 $75 Large vs Small, Variations in Power
costs
Space $64 $168 Large vs Small, Site Dependent
Total for 1 MIPS $2,985 $8,728
Utilization 95% 75% Site Dependent
Cost per CPU Sec $.06 $.21
Since Then Costs Have Decreased

Source: IBM Study, 2007
IBM Eagle Studies Demonstrate Most Mainframe
Workloads Are Already Best Fit On z/OS
Customer has $/MIPS costs >> $8K Eagle Study
A Total Cost of Ownership analysis study for customers

Cost and risk analysis of mainframe vs alternative
Tailored to individual customer needs
Cost factors unique to each enterprise

Costs evaluated over five-year period
48 out of 50 IBM Eagle studies concluded that System z

offered better TCO than a distributed alternative
Average cost of growing on System z was 41% less than
the distributed alternative
Results may vary zEnterprise Economics April 2011 15
Summary of 50+ Customers
Cost Ratios (z vs Distributed)
z Distributed z vs distributed (%)
5-Year TCO $15,887,900 $29,722,129 53.45%
Annual Operating Cost 3,077,367 3,279,856 93.83%
Software 11,890,104 13,195,104 90.11%
Offload Hardware 4,764,944 6,634,717 71.82%
System Support Labor 2,919,475 4,782,074 61.05%
Electricity 37,891 301,037 12.59%
Space 58,678 192,260 30.52%
Migration 299,217 5,319,530 5.62%
DR 810,202 3,839,836 21.10%
Average MIPS 3,536
Average Perf Unit 1 710,575
5-Year TCO $20,445,706 $30,538,414 66.95%
Annual Operating Cost 1,691,004 2,836,208 59.62%
New Workload
Software 5,139,694 21,660,900 23.73%

Hardware 12,112,243 4,116,146 294.26%
Electricity 18,167 216,998 8.37%
Space 3,996 240,972 1.66%
Migration 0 0
DR 49,293 33,945 145.21%
Average MIPS 6,623
5-Year TCO $7,985,234 $19,608,108 40.72%
Annual Operating Cost 499,990 1,220,597 40.96%
Consolidation
Software 2,229,249 10,376,382 21.48%

Hardware 4,709,050 5,088,461 92.54%
Electricity 28,264 186,200 15.18%
Space 39,825 248,231 16.04%
Migration 283,966 0
DR 493,901 603,079 81.90%
Average MIPS 3,662
zEnterprise Economics April 2011 Reference Only 16

Transportation Company
Inefficient Data Access
Customer concerns
High MLC cost and 30%+ annual growth rate of MIPS
Wanted to move applications off mainframe to reduce MIPS
Lesson Learned
Many applications access VSAM data on z
Some CICS logic moved down to WebLogic (1,000 MIPS),
Some CICS logic moved to DB2 store procedure
Inefficiency of data access from distributed servers actually increased
MIPS
DB2
webSlogic DB2
webSlogic CICS
VSAM VSAM
Open
Open Read
Read Close
Read Open
Read Read
Close

Government Agency
Data Expansion
Customer concerns
Mainframe too expensive
Wanted to move applications from mainframe to Bull (p5 based)
servers
Lesson Learned
Most data in IMS and DB2 on z
Unfeasible to move IMS on z to Oracle on UNIX
Database expansion from IMS hierarchical to Oracle RDB
2x-3x expansion of database
additional 2x-3x CPU for data processing
Scalability limitation of Oracle RAC
Need to partition large database
Round-robin fail-over arrangement of Oracle RAC servers would crippled
performance

Food Retail
Systems Management Costs
$14,000,000
Customer concerns $12,000,000
Mainframe too expensive $10,000,000
$8,000,000
Distributed
Approached by Oracle to move $6,000,000 Mainframe
Peoplesoft applications to UNIX $4,000,000
$2,000,000
$0
Lesson Learned OTC Year 1 Year 2 Year 3 Year 4 Year 5
Moving system management tools to

distributed servers increases software
costs
Tools pricing based on the # of cores to
be managed
For 2 UNIX servers (32 cores), these
tools alone would require $8.4M OTC
purchase plus $1.8M annual
subscription fees

Insurance
Overlapped Costs for Hardware Refresh
Customer concerns
TCO
Lesson Learned
Overlapped distributed server deployment resulted in over 20%
overhead
Distributed servers are typically leased in 36-month cycle
6 or more months are needed to prepare and deploy new servers,
which require a 6-month overlap for each 30-month period, or a 20%
overhead
Installing and removing distributed servers requires significant resource
as well 15 FTE

Observed At A Large Financial Services Customer
Lifecycle of Unix Servers
3rd Technology
Refresh
2nd Technology
In each 30 month lease
Refresh
there are only 24 months
Hardware Generation
1st Technology production use.

Initial Distributed Refresh
System
30 months
Setup and tear-down
time costs 25% more.
Plus . . . 41 hours of FTE
24 months setup and tear down labor
production per server = $3075
6 months
provisioning
Lifecycle of Mainframe Generations

30 months Weekend upgrades
Hardware Generation
30 months performed by IBM

2nd Technology Refresh
30 months capacity on demand
1st Technology Refresh pricing.
Initial Mainframe System
No need to retire the

1 Weekend Time server, upgrade in place.
upgrading to new hardware 30 months
and software levels production

Automotive Manufacturing
Unutilized MIPS
Customer concerns
Need to deploy a sales incentive application
mainframe too expensive
Lesson Learned
Client does not use VWLC Pricing, existing white space
capacity can support the new application, only $0.8M of
application tools will be needed
In comparison, the distributed solution would cost over
$18M

Financial Institution
No more power
Customer concerns
The customer needed to add new distributed servers for
Oracle applications
The local utility company prohibits adding more cables in
the metropolitan area
Lesson Learned
Consolidate 56 HP servers into 4 IFL avoid the power
constraint
Fewer cores also reduce software license cost

Distributed Server Sprawl To Minimize
Manufacturing Site Impact with Server Downtime
Manufacturing Sites
Application: Runs on 80 HP DL360 Servers

Communications controllers for
45 manufacturing sites
Must operate 24 x 7

Interfaces with Production Mainframe and
sends vital data over network
If server goes down, manufacturing site is down
Customer decided not consolidate to minimize 80 HP DL360
number of sites impacted due to server downtime 2 core Servers
3 to 5% Utilization
Solution: System z10 Linux

Only two IFLs required
Lower HW maintenance, software, labor, networking, floor space and power costs
Higher reliability, flexibility

Why So Many Distributed Servers?
De-multiplexing of applications to dedicated servers

One application workload per server group
Low utilization due to peak-to-average and growth provisioning
Batch workload may stress I/O capabilities
Separate servers for production, failover, development/test, disaster
recovery
Processing comparisons
Language expansion (CICS/COBOL path lengths are highly
optimized)
Conversion factor (MIPS to RPE) worsens as I/O rates increase
Oracle RAC inefficiencies compared to DB2
This affects Total Cost of Ownership

Also 3 to 5 year lifetime for distributed servers requires repurchase
And dual environments during migration

Why Do People Think Distributed
Computing Is Cheaper?
Inaccurate charge back!
Charge Back Practices Were Improved Over Time at a Large Financial Institution
More Accurate Charge Back Can Correct Perceptions of Relative Costs

II. ZENTERPRISE ECONOMICS

New metric
for the age
of Smarter
Computing COST PER
WORKLOAD
Accurately allocating cost in a

virtualized environment

Smarter Computing With zEnterprise
Platforms Optimized For Different Consistent Structured Management
Workloads
z/OS z/VM AIX Linux
Best fit for workload Consistent structured practices
Lowest Cost Of Lowest Cost Of

Acquisition Per Operation Per
Workload Workload
Lowest Cost Per Workload

Agenda
Workloads
z/OS z/VM AIX Linux
Right fit for workload Consistent structured practices

Lowest cost per workload Lowest labor costs
Cost Per Workload Why zBX is better than

Examples do-it-yourself
Consolidate standalone zManager labor savings
workloads Benefits of workload
Claims processing management
Consolidate hybrid front ends
Consolidating Workloads With Heavy I/O
Requirements
Benchmark to 10 workloads
Virtualized on Intel
8 core Blade
determine which per Intel blade
platform provides $21,413 per workload
the lowest TCA
over 3 years
PowerVM on PS701
15 workloads
8 core Blade
per POWER7 blade
Workloads $14,325 per workload
IBM WebSphere ND
Monitoring software
On 4 core Older Intel
Online banking workloads, each z/VM on zEnterprise CPF

240 workloads per 32-
driving 22 transactions way z/VM 32 IFLs
per second, with 1 MB
$14,052 per workload
I/O per transaction
I/O bandwidth
Consolidation ratios derived from IBM internal studies. z196 32-way performance large scale pool
projected from z196 8-way and z10 32-way measurements. zBX with x blades is
a statement of direction only. Results may vary based on customer workload
profiles/characteristics. Prices will vary by country.
Consolidating Heavy Workloads
Benchmark to Virtualized on Intel

1 workload 8 core Blade
determine which per Intel blade
platform provides $214,133 per workload
the lowest TCA
over 3 years
PowerVM on PS701
2 workloads
8 core Blade
per POWER7 blade
more parallel
threads
IBM WebSphere ND
Monitoring software
On 8 core Nehalem
servers
Online banking workloads, each
23 workloads
driving 460transactions per per 32-way z/VM
z/VM on zEnterprise CEC
second with light I/O 32 IFLs

Consolidation ratios derived from IBM internal studies. z196 32-way performance

Consolidating Light Workloads
Benchmark to 36 workloads Virtualized on Intel

per Intel blade 8 core Blade
determine which
platform provides Fast low cost
$5,948 per workload
the lowest TCA threads

over 3 years
34 workloads PowerVM on PS701

per POWER7 blade 8 core Blade
IBM WebSphere ND
Monitoring software
On 4 core Older Intel
Online banking workloads, each
driving 22 transactions per second
270 workloads per 32- z/VM on zEnterprise CEC
with light I/O
way z/VM 32 IFLs

Consolidation ratios derived from IBM internal studies. z196 32-way performance

Cost Per Workload Reveals True Value
25 heavy
True Value: Cost Per Workload
240 heavy workloads
I/O
Workloads
235 light
Cost Of Hardware Is Misleading
workloads
Run 500 workloads Cost of Cost of Cost per

Hardware Software Workload
56 Intel Blades
(8 cores per blade)
448 cores total $1.7M $9.8M $23.0K
1 zEnterprise
Best fit
32 IFL, 13 Power, 7 Intel $2.7M $4.7M $15.0K
192 cores total
Note: 3yr TCA. CPO benchmarks. Equal mix of WAS ND and DB2 workloads. List prices.
Agenda
Workloads
z/OS z/VM AIX Linux


Customer Case Study
Insurance Claim Processing Company
Primary Stable Business

Government Insurance Claims Processing
Medicare/Medicaid/Defense/State
Growth Business
Commercial Claims Processing
Two Existing Commercial Claims Processing Systems
Homegrown CICS/DB2 Application on Mainframe
ISV 3rd-party Package running on HPUX
Which
platform is the low-cost option for future growth in
commercial claims?
36
Two Commercial Claims Processing Systems
HP Servers + ISV IBM System z CICS/DB2
Which system
costs less for
Production Servers
HP 9000 Superdome rp4440 future
HP Integrity rx6600
growth?
Total MIPS 11,302
MIPS Used for commercial

Dev/Test Servers
claims processing
HP 9000 Superdome rp5470 Calculate production/dev/test 2418
HP Integrity rx6600
cost per
Claims per year 327,652 Claims per year 4,056,000
workload
Buy Build
Allocated Annual Costs For Two Systems
Mainframe Distributed Provided by customer finance
Hardware 1,302,205 87,806 department
Hardware Maint 315,548

Software IBM MLC 4,842,384
Software Non IBM OTC 647,843 196,468
Software Non IBM MLC 5,027,936
Storage 877,158
Network 418,755
Support Staff 2,324,623 257,289
Platform + Staff Total 15,756,452 541,563
Platform + Staff Claims Allocation 3,371,880 541,563

Billing Center 1,611,650
Call Center 2,920,090
Development 1,907,382
Total 9,811,002 541,563
Claims Processed 4,056,000 327,652
$ Per Claim 2.42 0.87

Software IBM MLC 4,842,384 Mainframe costs easily identified,
distributed costs difficult to
identify
Storage 877,158
Network 418,755
Support Staff 2,324,623 257,289

Total 9,811,002 541,563
$ Per Claim 2.42 0.87

identify
Storage 877,158
Billing and Call center costs
Network 418,755 allocated to mainframe, but would
Support Staff 2,324,623 257,289 be the same for either option

Total 9,811,002 541,563
$ Per Claim 2.42 0.87

identify
Storage 877,158
Billing and Call center costs
Network 418,755 allocated to mainframe, but would
Support Staff 2,324,623 257,289 be the same for either option

Development still required to
Billing Center 1,611,650 customize packaged software for
each new contract
Total 9,811,002 541,563
$ Per Claim 2.42 0.87
True Costs Per Workload
Mainframe Distributed
Hardware 1,302,205 87,806
Software IBM MLC 4,842,384
Storage 877,158 ?
Network 418,755 ?
Support Staff 2,324,623 257,289

Billing Center same same
Call Center same same
Development 1,907,382 123,031
Total 5,279,262 664,594
Claims Processed 4,056,000 327,652 Mainframe has lower
$ Per Claim 1.30 2.03 cost per workload
A Note On Support Staff Annual Costs
HP Servers + ISV IBM System z CICS/DB2

$0.79 per claim
Production Servers
HP 9000 Superdome rp4440
$0.12 per claim
HP Integrity rx6600
Total MIPS 11,302
MIPS Used for commercial

Dev/Test Servers
claims processing
HP 9000 Superdome rp5470 Mainframe support staff production/dev/test 2418
HP Integrity rx6600 has 6.6x better
productivity
Claims per year 327,652 Claims per year 4,056,000

A Note On Processing Equivalence
Current Computing Capacity Allocated For Distributed is
38,918 RPEs
Using the Scaling Factor (Claims/Sec Distributed /

Claims/Sec Mainframe) we calculate that processing the
equivalent Claims volume on the mainframe would require
only 195.5 MIPS
This gives us an RPE/MIPS factor of 199.1 (Distributed

capacity to Mainframe capacity ratio)
We have studied Offloads that range from 122 RPE/MIPS

to 670 RPE/MIPS
44
Agenda
Workloads
z/OS z/VM AIX Linux


Collapse Web Front End Workloads Into
zEnterprise Platform
Web facing Message CICS/DB2
front-end hub core system
Run as ensemble of virtual
servers
Unified management of
virtual machines
Manage ensemble as a
AIX on Power DataPower z/OS single workload with service
Blade
XI50z goals
WAS ESB CICS/DB2 Assign best fit to Power

blade and XI50z for lowest
cost per workload
AIX z/OS
Embedded pre-configured
zEnterprise BladeCenter zEnterprise data network
Extension (xBX) z196
DataPower XI50z Built For Purpose Appliance
Enterprise
Service Bus Microsoft BizTalk Server 492 messages per sec
benchmark Windows on Intel Server $764 per mps
comparison BizTalk 4 sockets, 32 cores
Server
128 GB
Windows
Oracle Service Bus 5,839 messages per sec

OSB Oracle Linux on HP DL380 $120 per mps
2 sockets, 12 cores
Linux 128 GB
messages messages
DataPower
XI50z
5,117 messages per sec
$33 per mps
Tests consists of measuring maximum throughput DataPower
of ESB while performing a variety of message
mediation workloads: pass-through, routing,
XI50z in zBX
transformation, and schema validation HS 22, 8 cores

Web Front Ends Cost 58% Less On zEnterprise
28 front end Competitive App Server
applications on older 57 SPARC T3-1B blades
in SUN racks
SPARC T2+ servers 2 HP DL380 servers
(for ESB)
936 cores total
Web
Facing
28 workloads
each driving Upgrade to $11.7M
1975 tps
new SPARC T3 3yr TCA
hardware HW+SW
SPARC T5440 WebSphere App Server

32 core servers 28 POWER7 blades
2 DataPower XI50z
HP DL380 servers in zBX
(for ESB) 224 cores total
Power Blades $4.9M

in zBX 3yr TCA
HW+SW
Web Front Ends Cost 58% Less On zEnterprise
Competitive App Server

57 SPARC T3-1B blades
Why?
in SUN racks WAS on PS701
2 HP DL380 servers
(for ESB) delivers 1.84x
936 cores total
processing capacity
Competitive
Upgrade to $11.7M Application Server
new SPARC T3 3yr TCA cannot effectively
hardware HW+SW
utilize the threads
available in T3
blade
Fewer cores for SW
WebSphere App Server
28 POWER7 blades DataPower better
2 DataPower XI50z
in zBX price/performance
224 cores total
Need to over provision
Power Blades $4.9M SPARC T3 since no
in zBX 3yr TCA
HW+SW zManager
SAP Applications Cost 20% Less On zEnterprise
20 front end SAP

applications on older 38 SPARC T3-1B
blades in SUN rack
SPARC T2+ servers 608 cores total
T3-1B z196
SAP
Upgrade to $1.2M
20 workloads
new SPARC T3
3yr TCA
hardware HW+SW
20
SPARC T5440
32 core servers 23 POWER7 blades
538,120 total SAPs in zBX
640 cores total 184 cores total
zBX z196
Power Blades $0.97M

in zBX 3yr TCA
zEnterprise Economics April 2011 HW+SW 50
Agenda
Workloads
z/OS z/VM AIX Linux


Claims processing zManager labor savings
Consolidate standalone Benefits of workload
workloads management
Compare The Costs For 92 Hybrid Workloads
I see how fit for
purpose can cut costs,
POWER7 blades in
but why do I need zBX BladeCenter chassis
racks?
Cant I just use

BladeCenters to do it Web Facing
myself? Do-It-Yourself
72 workloads
SAP
20 workloads
POWER7 blades
in zBX racks with
zManager zEnterprise
(Manage+Automate)

Labor Cost Trends Favor A Centralized
Structured Approach To Management
Intel - Virtual Servers/FTE z/OS - MIPS/FTE

500
450
400
Large scale consolidation and
t
consistent structured
en
350
em
management practices drive
ov
300
pr increases in labor productivity
Im
250
x
18
200
150
100 t Small scale consolidation with
x Imp rovemen
50
3.9 ad hoc management achieves
0 lesser gains
2000/01 2007/08
Year
The more workloads you consolidate and manage with

consistent structured practices
the lower the management labor cost
Source: IBM Scorpion Studies and IDC Three Data
Centers One Vision.PDF (IDC, 2010) zEnterprise Economics April 2011 53
zManager Provides Structured Management For
zEnterprise Virtual Environments
Process Typical Distributed zManager

Management Practices
Asset Discover assets with ad hoc Automated discovery and
Management methods management of entitlement assets
Manual entitlement management
Deployment Manually configure hypervisor and Automated deployment of

Management build networks hypervisor and attachment to
integrated networks
Security Different ways to manage Centralized, fine-grained

Management administrator access administrator access management
Change No visibility into impact of changes Track dependencies for change

Management impact
Capacity and No end-to-end transaction End-to-end transaction monitoring to

Performance monitoring isolate issues
Manually adjust CPU resources to Automatic CPU resource
Management
meet changing workload demands adjustments to meet changing
workload demands

Hypervisor Setup And Configuration Lab Test
Do-It-Yourself vs. zManager
DIY Tasks (per Blade) Elapsed Time Labor Time
Initial communication setup & education 6 min 26 sec 6 min 26 sec
Boot VIOS disc & install (creates LPAR for VIOS automatically) 37 min 59 sec 36 min
Configure VIOS networking 2 min 49 sec 2 min 49 sec
Create new storage pool for LPARs 35 sec 35 sec
Install VIOS service fix packs 61 min 5 sec 20 sec
TOTAL TIME 1 hr 48 min 52 sec 46 min 10 sec
zManager Tasks (per Blade) Elapsed Time Labor Time

Add entitlement for a blade 90 min 92 sec
TOTAL TIME 1 hr 30 min 1 min 32 sec
97% reduction
in labor time
Source: IBM CPO Internal Study zEnterprise Economics April 2011 55

Network Setup And Configuration Lab Test
Do-It-Yourself vs. zManager
Do-It-Yourself Tasks (for 28 blades) Elapsed/Labor Time
Planning (includes time to go over docs, etc) 5 hrs
Cabling 2 hrs
AMM Configuration 2 hrs
Logical Configuration (L2) 8 hrs
Blades network configuration 4 hrs
Testing 2 hrs
Documenting the configuration 3 hrs
TOTAL TIME 26 hrs
zManager Tasks (for 28 blades) Elapsed/Labor Time

Planning 3 hrs
Cabling (pre-cabled in zBX) 0 hrs
AMM Configuration (done in zBX) 0 hrs
Logical configuration (L2) 30 mins
Blades network configuration 1 hr 30 mins
Testing (pre-tested) 0 hrs
Documenting the configuration (all part of zManager) 0 hrs
TOTAL TIME 5 hrs 81% reduction

in labor time

Performance Manager Lab Test
Automatic Allocation Of CPU Resource
Time
zManager monitors
virtual machine
Workload 2 (W2)
performance and
automatically adjusts
15 minutes CPU resources as
Goal
needed
Considers priority and

Workload 1 (W1)
performance relative
to service level
agreement goals
2. Performance Manager is 4. W1 reaches
turned on. zManager detects performance
W1 is underperforming. goal. Reduces the need to
1. No performance
over-provision CPU
management. W1
is underperforming,
3. Over time, zManager resources
adjusts CPU resources,
and W2 is over- taking from W2 and
performing. giving to W1.
zManager Performance Management Reduces
Need To Overprovision CPU Resource
Without zManager With zManager
Total CPU Resource Needed

Total CPU Resource Needed
110% Noadditional
No additionalCPU
CPU
resources needed
resource needed
100% 100%
10% more CPU
resources needed Unexpected 20% spike
in average demand,
Performance Manager
Unexpected increases entitlement by
20% spike in 20%
average 13.2% 13.2%
demand
Workload 1 Workload 1
11%
Average utilization
Average utilization
11%
Performance manager
reduces entitlement by
20%
11% Workload 2 Workload 2
11%
8.8%
Must overprovision CPU resource for both workloads Performance manager enables trading off resource from
by 10% to handle unexpected spike in demand lower priority workload, avoiding the need to
overprovision

Case Study:
Compare The Costs For 92 Hybrid Workloads
62 Blades Cost of
POWER7 blades in 5 Acquisition $7,325K
BladeCenter chassis
Labor $ 987K
Total (3yr) $8,312K
$30.1K
Web Facing
Do-It-Yourself per workload
72 workloads Data per year
Processing
20 workloads
zBX Cost of
Acquisition $6,994K
Labor $ 714K
Total (3yr) $7,708K
72 Web facing hybrid
applications, 2 per POWER7 56
blades
POWER7 blades
20 SAP hybrid applications, 1
per POWER7 blade. DIY blades
over provisioned by 10%
in two zBX racks with
zManager zEnterprise $27.9K per
because no zManager
performance manager (Manage+Automate) workload per year
Cost of CICS/DB2 and SAP
components of workloads not
28% less labor cost and 7% less cost per workload

included
Labor costs are for blade
management only
Labor rate $159,600 per year
Results may vary based on customer workload
profiles/characteristics. Prices will vary by country. zEnterprise Economics April 2011 59
zManager Labor Reduction Benefits
4289 total hours per year reduced by 28% to
3104 hours per year
Change Management Deployment Management

Automatic setup and configuration of
Standardization of images and the hypervisor and out-of-the-box
firmware, visibility into relationships Reduced by networks
among resources 33%
Reduced Reduced by
Capacity/Performance
by 41% 52%
Management
Automation to isolate and
fix issues
Reduced by
9%
Security Management Reduced

by 20% Asset Management
Centralized fine-grain administrator Automated discovery, entitlement
access control management

Summary
Cost per workload is the

key metric for the new IT
economics
Fit for purpose reduces

cost of acquisition per
workload
zEnterprise integrated
management reduces cost
of labor per workload

Smarter Computing: System z Analyst Summit
Trademarks and disclaimers

Intel, Intel logo, Intel Inside, Intel Inside logo, Intel Centrino, Intel Centrino logo, Celeron, Intel Xeon, Intel SpeedStep, Itanium, and Pentium are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States
and other countries./ Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other
countries, or both. IT Infrastructure Library is a registered trademark of the Central Computer and Telecommunications Agency which is now part of the Office of Government Commerce. ITIL is a registered trademark, and a registered
community trademark of the Office of Government Commerce, and is registered in the U.S. Patent and Trademark Office. UNIX is a registered trademark of The Open Group in the United States and other countries. Java and all Java-based
trademarks and logos are trademarks or registered trademarks of Oracle and/or its affiliates. Other company, product, or service names may be trademarks or service marks of others. Information is provided "AS IS" without warranty of any
kind.
The customer examples described are presented as illustrations of how those customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics may vary by customer.
Information concerning non-IBM products was obtained from a supplier of these products, published announcement material, or other publicly available sources and does not constitute an endorsement of such products by IBM. Sources for
non-IBM list prices and performance numbers are taken from publicly available information, including vendor announcements and vendor worldwide homepages. IBM has not tested these products and cannot confirm the accuracy of
performance, capability, or any other claims related to non-IBM products. Questions on the capability of non-IBM products should be addressed to the supplier of those products.
All statements regarding IBM future direction and intent are subject to change or withdrawal without notice, and represent goals and objectives only.
Some information addresses anticipated future capabilities. Such information is not intended as a definitive statement of a commitment to specific levels of performance, function or delivery schedules with respect to any future products. Such
commitments are only made in IBM product announcements. The information is presented here to communicate IBM's current investment and development activities as a good faith effort to help with our customers' future planning.
Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon considerations such as the
amount of multiprogramming in the user's job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve throughput or performance
improvements equivalent to the ratios stated here.
Prices are suggested U.S. list prices and are subject to change without notice. Starting price may not include a hard drive, operating system or other features. Contact your IBM representative or Business Partner for the most current pricing in
your geography.
Photographs shown may be engineering prototypes. Changes may be incorporated in production models.
IBM Corporation 2011. All rights reserved.

References in this document to IBM products or services do not imply that IBM intends to make them available in every country.
Trademarks of International Business Machines Corporation in the United States, other countries, or both can be found on the World Wide Web at http://www.ibm.com/legal/copytrade.shtml.
62 2011 International Business Machines Corporation

62
Thank you!
ibm.com/smartercomputing

Backup

System z Improves IT Efficiency Across
Industries*
44% 31% 25%

lower cost per lower IT spend per lower cost per
credit card transaction consumer loan mega watt hour produced
24% 20%
lower cost per lower cost per
hospital bed airline passenger
26% 25% 23%

lower cost per lower cost per lower cost per
new vehicle retail store barrel of oil
in the long run, the marketplace rewards those that make the optimum
use of the right computing resources in the right way as evidenced by
business performance.
-- * Dr. Howard Rubin, CEO and Founder Rubin Worldwide
* Based on an analysis of actual IT spend and business performance, comparing companies with greater than average mainframe mix vs. less than average
mainframe mix
Case Study:
zEnterprise Reduces Infrastructure Labor Hours
5000
4500
4000
28%
Yearly Labor Hours
fewer labor
3500 hours Change Mgmt
3000 Security Mgmt
2500 Asset Mgmt
2000 Capacity/Perf Mgmt
1500 Deployment Mgmt
1000
500
0
Do-It-Yourself zEnterprise

DECK IBM s05 ZEnterprise Economics

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DECK IBM s05 ZEnterprise Economics

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zEnterprise Economics

I. Mainframe TCO Characteristics

II. zEnterprise Economics

zEnterprise Economics April 2011 2

zEnterprise Economics April 2011 3

Distributed scale out

Data Center Workload

1. Establish Equivalent Configurations

2. Price out Total Cost of Acquisition

3. Add cost of labor and environmentals

zEnterprise Economics April 2011 5

transactions per second (tps)

zEnterprise Economics April 2011 6

BaNCS Database Servers: (1,834,300 RPEs)

57.6 RPEs per MIPS

zEnterprise Economics April 2011 7

BaNCS Application Servers: TCS BaNCS

BaNCS Database Servers: (3,143,360 RPEs)

92.2 RPEs per MIPS

zEnterprise Economics April 2011 8

Performance Unit Capacity for various distributed servers

zEnterprise Economics April 2011 9

$23,802,441 (5.8X) more $10.0

Source: Gartner IT Metrics Data (December 2010)

zEnterprise Economics April 2011 12

zEnterprise Economics April 2011 13

Since Then Costs Have Decreased

Customer has $/MIPS costs >> $8K Eagle Study

A Total Cost of Ownership analysis study for customers

Tailored to individual customer needs

Cost factors unique to each enterprise

48 out of 50 IBM Eagle studies concluded that System z

Software 5,139,694 21,660,900 23.73%

Software 2,229,249 10,376,382 21.48%

zEnterprise Economics April 2011 Reference Only 16

zEnterprise Economics April 2011 18

Customer concerns $12,000,000

Mainframe too expensive $10,000,000

Peoplesoft applications to UNIX $4,000,000

Lesson Learned OTC Year 1 Year 2 Year 3 Year 4 Year 5

Moving system management tools to

zEnterprise Economics April 2011 19

zEnterprise Economics April 2011 20

1st Technology production use.

Lifecycle of Mainframe Generations

30 months performed by IBM

No need to retire the

zEnterprise Economics April 2011 21

zEnterprise Economics April 2011 22

zEnterprise Economics April 2011 23

Application: Runs on 80 HP DL360 Servers

Solution: System z10 Linux

zEnterprise Economics April 2011 24

De-multiplexing of applications to dedicated servers

This affects Total Cost of Ownership

zEnterprise Economics April 2011 25

More Accurate Charge Back Can Correct Perceptions of Relative Costs

zEnterprise Economics April 2011 27

Accurately allocating cost in a

zEnterprise Economics April 2011 28

z/OS z/VM AIX Linux

Best fit for workload Consistent structured practices

Lowest Cost Of Lowest Cost Of

Lowest Cost Per Workload