Wednesday, February 18, 2009

Can App-V in the Cloud makes a good ROI even better?

Frugal IT executives looking for an edge in reducing costs are exploring and expanding virtual desktop infrastructure (VDI) solutions to help meet cost cutting goals. IDC research puts the cost of a typical PC at over $1,400 per year, consuming 20% or more of a typical IT budget. Contributing to the high cost of PCs is the difficulty in managing and maintaining standards in these distributed assets, application compatibility and change management, and PC security.

Delivering on the promise of VDI to cut costs, Microsoft App-V Application Virtualization (formerly SoftGrid) enables IT to securely deliver applications to the users as virtualized, centrally managed network services that never need to be installed on individual client PCs / devices.

How does this help reduce costs? Here are just a few examples:

· New applications: If a user needs a new application they simply request it. The client system pulls the application centrally from the App-V server with no need to install the application. The cached application and settings are saved locally so the application can run in disconnected mode, but when connected receive the latest with updates centrally controlled and managed (vs. pushed and installed to each client). This dramatically centralizes all packaging and management of applications and eliminates installation, and moreover distribution of patches and upgrades.

· Application patch or upgrade: If an application change such as an upgrade or patch needs to be made, the change does not need to be compatibility tested with each deployed PC system and configuration. The systems and OS are virtualized so that testing and remediation workloads are reduced by 90% or more. When the application is packaged and deployed the packaging is simplified because of a reduction in the number of different versions to deploy, and each user is automatically updated without having to package and push installs to the clients.

· Application retirement: If an application needs to be removed, it is done centrally as well.

· User change request: If a user should not longer want or need access to an application, rights can be changed using Active Directory.

According to IDC, the benefits of automated application delivery with App-V can deliver at least $120 in benefits per user per year.[1] Wipro PSA takes this analysis further looking beyond just the application delivery benefits to App-V’s impact on helping to implement other infrastructure optimization best practices. App-V combined with the other MDOP solutions is estimated to deliver over $230 in annual benefits per PC per year.[2]

For every 1,000 users using App-V for application delivery, a compelling $120,000 to $230,000 in IT labor productivity improvements and savings can be derived.

As it’s been said there is no free lunch, and as compelling as these benefits are, App-V does not come for free.

Licensing App-V is relatively straight forward and inexpensive. An organization needs to be covered by a Software Assurance agreement from Microsoft, and the MDOP suite can then be licensed. Incremental list price for this license are $10 per PC per year.[3] For 1,000 users, this would require only $10,000 in annual licensing costs at list price, and volume discounts may be available, driving this cost even lower.

However, the larger expense to an organization is in establishing and supporting the host server infrastructure needed to stream the applications. According to Microsoft estimates, App-V requires an estimated 1 server for every 800 corporate concurrent users, where the number of concurrent users is usually set to 50%-60% of the total user population, but can be higher depending on usage profiles of users. [4]

This ideal sizing metric is often affected by the number of remote or branch offices, where a local App-V host server will be required in order to support the users properly with adequate performance. In real world environments the number of servers is driven by a combination of topology / geography and user requirements, deriving an average of 250 users real-world per server versus the baseline / discussion sizing.

Virtualizing every 1,000 users with App-V will require the addition of on average 2 servers to support the delivery (using a 50% concurrency rate and considering real world geographic requirements).

For each new host server the average capital costs (using list pricing) are:

· $6,500 purchase price for the server hardware (2 CPU / 4 Core)
· $2,334 per enterprise OS license Windows Server 2008
· $1,290 per server for System Center Enterprise license
· $2,000 in networking, storage networking and other capital overhead additions per server

Each server will require setup and installation for the server, operating system and management solutions:
· 8 hours setup and install * $50 per hour = $400

This brings the total initial investment to $12,524 per server. For every 1,000 users, that would require just over a $25,000 investment.

These initial costs are typically amortized over the life of the server, in this case we will use three years, yielding an average amortized initial cost per server of: $4,175 per year.

On-going costs for the server infrastructure to support App-V should not be ignored when calculating the total cost of ownership. On average each server:

· $1,800 annual cost for energy (power and cooling)
· $1,200 annual cost for data center space
· 75.2 hours per server per year in server admin/ops overhead * $50 per hour = $3,760

This totals an additional $6,760 per server per year.

In total, almost $11,000 per server per year in ownership costs is required for each server needed to support the App-V installation. For our 1,000 user example, this totals $22,000 per year.

In total for our 1,000 user example, the investment required for the server infrastructure is:
· $10,000 per year for licensing
· $22,000 per year for infrastructure
· $32,000 total per year, or $32 per user per year.

For some installations, these host server costs may be too conservative as topology requirements or benchmarks prove that more servers are needed to maintain and support the users and workloads. In our experience, these costs are average, but could easily be tripled with a compute intensive / more distributed topology.

Storage is required as well to support the App-V infrastructure. For a typical installation, storage is required for the App-V program instances, application delivery packages, user storage pools and sequencer cache. A. The size of this storage pool required will vary based on the number of application packages to deliver. Finding information on exact storage requirements is difficult. The application itself requires 1GB for all the server components, while cache, application delivery package, storage pools are installation dependent. For a typical 1,000 user environment:

· 120 applications each consuming 5 GB on average each, yields 600GB needed.
· 500MB per user storage for each of 1,000 users = 500GB.

For this 1,000 user environment, at least a TB will be required, and likely more if more user storage or more applications are to be supported.

For storage, at least $5 per GB should be allocated for the procurement of the storage (often not linear because subsystems may need to be purchased to support base capacity), and an additional $3 per GB per year for storage management, disaster recovery, energy and space costs. For our 1,000 user example, the average storage costs per year are expected to be almost $5,000 additional per year, an additional $5 per user per year.

Even with storage costs and potentially higher server costs for some, the ROI is strong for App-V, exceeding 600% in almost all projects we have examined.

Want an even better ROI?

For those environments where resources are scarce to setup and support the App-V infrastructure, the capital investment is not available or infrastructure investments are reserved for other projects, FullArmor offers a new and innovative solution, making App-V available via Microsoft Azure™ Services Platform - a comprehensive Microsoft services platform for cloud computing.

For those of you not familiar with FullArmor, the organization has been helping large organizations successfully manage their IT user policy and endpoint security with solutions based on Microsoft® products and technologies, including the Active Directory® service, Group Policy, and the Windows PowerShell™ command-line interface. Its products for policy management are well known to users of NetIQ solutions, who sell former products to supplement their management product line. A Boston-based Microsoft Gold Certified Partner, serves large organizations such as Boeing, the Federal Bureau of Investigation, Eli Lilly, Wal-Mart, and Bank of America, and it has a customer base of more than 5 million users and 1,500 organizations worldwide.

With FullArmor’s PolicyPortal solution, which customers use to manage networks that include PCs outside of Active Directory® domains, App-V can be hosted in the cloud on Azure.

With the desktop virtualization solution available from the cloud, the organization essentially outsources the infrastructure to support App-V to Microsoft including requirements for servers and storage. Availability and performance are managed by Microsoft and the huge investment it has made in its data center.

The challenge with App-V in the cloud, especially for small and medium businesses, is management and administration of the managed PCs. With the FullArmor PolicyPortal, organizations maintain network security by extending their directory-based policies over the Internet. A small piece of software resides on the client PC to communicate with the PolicyPortal application. Then, from a central location, administrators can manage PCs; set up user policies; distribute applications and updates; monitor the health of specific PCs; manage PC inventories; and perform security procedures such as remote data wipes in the event that a PC is lost or stolen. Through the use of the Microsoft .NET Workflow Service and Microsoft .NET Service Bus, administrative tasks are performed automatically, which minimizes or eliminates the need for intervention by the users of the targeted PCs.

Particularly appealing for small and medium businesses, this solution can help companies take advantage of the $120 benefits per desktop per year that desktop virtualization can deliver, with little investment and work in establishing and managing the infrastructure to support the solution. As PolicyPortal also includes key features to help standardize and manage client computers, the benefits extend beyond those of App-V to at least $230 per PC per year according to IDC research on implementing desktop standardization.

App-V served from Microsoft Azure using PolicyPortal can save $37 per user per year and help deliver on benefits of over $120 per virtualized desktop. Using PolicyPortal to manage desktop standardization can drive an incremental $110 per PC per year in annual savings, and allow organizations to potentially avoid additional infrastructure by providing Active Directory and Group Policy administration without having to add Active Directory infrastructure.

Additional information can be found in these research white papers

FullArmor - Solution Provider Delivers Flexible Policy Solution with Cloud-Based Platform

IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT
Labor Costs and Best Practices for Managing the Windows Desktop,” Doc #203482, October 2006, IDC.

Wipro Product Strategy and Architecture Practice’s Analysis of Features,
Cost Benefits, and Effects on IT Best Practices that Improve IT Infrastructure
Optimization March 2007 Wipro PCA


[1] IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT Labor Costs and Best Practices for Managing the Windows Desktop,” Doc #203482, October 2006, IDC.

[2] Wipro Product Strategy and Architecture Practice’s Analysis of Features,Cost Benefits, and Effects on IT Best Practices that Improve IT Infrastructure Optimization, March 2007, Wipro PCA

[3] According to WiPro: Software Assurance is available on both Microsoft’s Select and Enterprise Agreement licensing programs and costs between $35 and $55 per PC, depending on the specific license each organization has with Microsoft. MDOP is an add-on service available to Software Assurance and is available to organizations with select A licensing for $10 per PC per year. Other licensing agreements are available that may increase or decrease the cost to add MDOP to a Software Assurance subscription.


Friday, February 13, 2009

Money for Nothing, and Projects for Free

I was working on a recent business case for a client and even though the return on investment for the project had very compelling returns, was conservatively built on savings that could be banked on 100%, and with a quick payback, the IT executive was still in a bind.

The virtualization project required a modest $300,000 initial investment in licenses, labor and services to deliver a pretty much locktight $500,000+ per year in savings over the next three years. These were not pie in the sky soft benefits, but consisted of power bill savings, an additional $200 credit on each of 700+ servers to be retired, and data center space savings, not to mention the reallocation/resale potential for the 700+ retired servers (which were not being counted).

The IT executive had been tasked with delivering substantial budget cuts, as many have been in these times, so a project like this was welcome, but pushback was plenty.

In order to save money, the company has already made IT headcount cuts, which every group has had to do. Doing this first however left his group substantially shorthanded and ill equiped to do much of anything but "keep the lights on".

With the few resources remaining, and with more cuts needed to meet the aggressive savings goals, the remaining team first looked to cut additional low hanging fruit, which was a wise move. For example, e-mails were sent to users to collect up any spare PCs or other assets that weren't being used. Taking advantage of whats already in place and renegotiating supplier / provider contracts was first on the list and did deliver some benefits. However, with these easier projects drying up and more savings needed, the team really needs to do more projects like the one proposed.

More aggressive programs, in particular programs like data center consolidation, virtualization, and legacy software retirement / consolidation were clearly needed. But this executive like many others has been asked to cut costs without the labor needed to implement the cost cutting programs, or potential to invest additional capital or service investments needed to deliver the savings.

Herein lies the opportunity for the saavy solution provider or vendor. In the near term a give is needed, but the vendor helping this client needs to figure out a way to implement the proposal with no money out of pocket will be the winner. From the proceeds of the savings, could the company approve the project?

First, the vendor could delay payment until the power company rebate checks are made. This could alone be used to pay for the professional services needed to help the company plan, setup and deliver the solution.

Second, the vendor could enter into subscription licensing and spread the license payments out on a monthly basis, maybe on a graduated scale as the solution is deployed to affect and is delivering the promised utility bill and lease savings.

The key is to revist an old concept of mine - an ROI SLA, and for the vendor to rethink how the sale can be made and paid for based on actual delivery of returns, or at least spread out the payments to match the promise of these returns as is proposed here.

Wednesday, February 11, 2009

How to Freeze a Market: Vista Obscures the View

In research on the economic impact of various software spending plans, Sarah Friar, from Goldman Sachs finds that as the economy tightens, two of the most likely projects to be delayed are upgrades to Microsoft Vista and Microsoft Office.

Exhibit 11

For Microsoft Vista, we have studied in depth the savings realization, and there is indeed value and ROI in the upgrade. These savings include improving manageability and support, reduced power costs, improved security and more. These findings are reflected in this blog and Computerworld article (see reference). I have been a Vista user for a long time, and am a fan.


But in most corporate instances, the pain of testing and remediating application compatibility issues, and upgrade / delivery is so great as to marginalize the benefits - especially in these more frugal times.

Don’t get me wrong, crunching the numbers proves that there is still a net benefit to the upgrade, and a positive ROI, but the investment in precious resources to perform the remediation and delivery efforts the upgrade compared to the investment and ROI of other projects makes it a project ripe for delay - especially in these times.

The pain and risks vs. reward for Vista upgrade just pales in comparison to other cost savings projects in the data center like server / storage virtualization and systems management consolidation. And when you have less to spend, you want to get more for less. The upgrade to Vista is a more for more project, and these are flat out going to be postponed.

The numbers prove out that frugal IT executives are in-line with my opinion. In the aforementioned Goldman Sachs survey where over 40% indicate delay in implementing Vista, by far the highest project up for delay. But that was back in June of 2008 before the meltdown. We estimate the number to easily be double this today.

1) Freezing a market mistake 1:

Customers are hurting in these tight economic times and IT budgets are being reduced. The person next to you just got laid off and you fear for your job. It is no time to force customers to upgrade to a product that they would rather not upgrade to at this time.

From Computerworld reporting on Microsofts latest announcement on XP support:

a) On June 30th, XP will no longer be available for general purchase. However, some resellers have announced that they will factory-install XP Professional on new machines after June 30 by taking advantage of Windows Vista's "downgrade" rights.

b) Regarding support availability which many are fearful will end on XP, Jared Proudfoot, a manager in Microsoft's support life cycle group, reiterated the final support dates for Windows XP a Computerworld article. According to Proudfoot, Windows XP will remain in what Microsoft calls "mainstream support" until April 14, 2009, and continue in "extended support" through April 8, 2014, he added. The former delivers free fixes -- for both security patches and other bug fixes -- to everyone. During the latter, all users receive security updates, but non-security hot fixes are given only to companies that have signed support contracts with Microsoft.

Source: Computerworld

In normal times, the length of support on XP from initial release to current expiration dates is longer than normal, and some would say heroically long. This has been a good thing.

But unfortunately, the upgrade investment requirements in these not normal times mandates that Microsoft provide a better solution as the numbers clearly indicate that upgrading to Vista is not in the cards for most organizations. Funds are just not available to do the upgrade and are being spent on quicker payback, higher ROI projects – many of these involve other Microsoft solutions such as System Center, SharePoint, OCS, SQL, Hyper-V, App-V etc..
Giving customers a break when times are tough will definitely pay back later with loyalty and more business. And overall, these companies are investing heavily in other Microsoft solutions as a priority to help save costs.

Forcing customers to make an investment in Vista that they would rather delay, or wasting resources jumping through hoops in order to get the XP they would like to remain with will only cause rebellion.

I do believe Microsoft when it says it is not forcing the upgrade to Vista, but personal opinion polls and blogs would tell a different story. The PR war is being lost on this front.

1) Freezing a market mistake 2:

Microsoft has created a positive buzz around Microsoft 7 as a better upgrade path from Windows XP.

Technical reviewers love 7, and say it is everything Vista should have been.

Many, such as InfoWorld (see below) argue to skip Vista altogether and jump right to 7.

I have not tried 7, but our managed service provider raves about it every time I see him.

Those who are trying to figure out what to do next could not be more confused.

They know the upgrade to Vista will use precious resources and deliver some but not stellar returns. They know that support is going to be limited on XP.

Do you upgrade now to Vista? Stick with XP and wait for Windows 7 which technologist like better?

In uncertain times people are generally frozen as to what to do next anyway. Making a move often does nothing but put your head on the chopping block.

Throwing a new and exciting future version in the mix will only make the choice harder for those who would like to upgrade and make the case to Vista now, and will make easier for those who decided to wait anyway for 7.

Source: InfoWorld

The bottom line

These tougher times represent both good and bad for Microsoft solutions.

The bad news: Microsoft Vista sales can only be hurt more by these two market freezing actions. Expect the next Goldman Sachs survey to have Vista once again on the top of the delayed projects list. For Vista to move up the list, Microsoft needs to make it an even easier economic decision and represent a better value proposition in these tight times. If you want folks to upgrade, drop the price substantially and make it a no-brainer value proposition.

The good news: Other Microsoft data center virtualization, management and collaboration projects are getting approvals and unlike Vista, offer an incredible value proposition (versus just ordinary) that puts these projects at the top of the priority list.

Tuesday, February 10, 2009

Another survey indicates IT budget cuts in 2009

SearchCIO has just released results of their survey of 275 IT executives, and as anyone would suspect, companies both large and small are reducing their IT budgets for 2009. In large enterprises (companies with more than 1,000 employees), 42% of respondents are reducing IT budgets from 2008. In mid-size organizations, a third indicated budget cuts, with another third just holding the line. And as other surveys have predicted, the budget cuts will become more widespread and deeper the longer the economic uncertaintly continues.

The results indicate that no industry is immune to cuts, and that no project set is sacred.

Mimicking IDC research from 2000/2001, software spending remains resilient in these tough times, as organizations look to automate key IT functions, and more importantly drive business process efficiency.

Software investments of note, from the Search CIO survey:
  • BI is one of the software focal points, as organizations try to gain insight and track performance to guide the organization through these uncertain times.
  • Collaboration software (Unified communications, SharePoint, Instant Messaging, Web / audio / video conferencing) is an investment focus to empower flexible employee work environments and leverage the workforce as a team

For system providers the picture is less rosy, but still not dismal. Investments to help consolidate data centers such as blade servers, server virtualization and storage virtualization are still garnering a decent share of the budget.

To no surprise with cuts in discretionary projects occur, security, business continuity and compliance are gaining budget share. As financial pressures mount, cyberthreats increase, and organizations are wise not to reduce these required protective investments.

The Bottom Line

Projects aimed at consolidating the data center, reducing operating costs, improving insight, and leveraging employees to do more with less are the focus. A quick payback is required, and projects will need now more than ever to have quantifiable proof points in order to gain a share of an ever shrinking budget.

The articles can be found here:,289142,sid182_gci1347179,00.html,289142,sid183_gci1347296,00.html?track=NL-973&ad=687865&asrc=EM_NLN_5810093&uid=748591

Wednesday, February 04, 2009

How TCO is a common sense sales and marketing Tool for Today’s Chaotic Economy

My friend and board member Bill Kirwin, original father of TCO analysis with Gartner, put it best when he wrote this article for us on the power of using TCO as a sales and marketing advantage to win deals in these tough economic times.....

As the credit crisis continues, organizations have been forced to tighten funding allocations in preparation for a long economic winter. IT budgets for 2009 are contracting even further from the modest forecasts for 2008, which are being trimmed even as this is being written.

For IT budget holders, triage is a critical component of determining how funding is going to be allocated for infrastructure, productivity and enterprise applications. Cold, hard decisions are being made on where to trim personnel, hardware and software spending. Never has cost-analysis been so critical for technology users to justify spending and for technology providers to prove the business case in order to assure that the proposed solutions are a priority and make the budget cut.

As the economy weakens, Total Cost of Ownership (TCO) will be a critical influence as to how spending decisions are made.

For those new to this metric, TCO is a well-established standard methodology used to examine computing costs, TCO is defined as a holistic view of enterprise costs and specific solutions over time. It seeks to expose the “hidden costs” of spending decisions and operations so that real reductions in cost can be realized. First developed in 1986 to analyze the cost of competing PC platforms, TCO’s influence has been extended to virtually all technologies.

Today, it is a mature, widely accepted practice in both helping buyers analyze ways to reduce costs, and for vendors to make the case for change, or prove competitive advantage. As economic buyers decide where to make spending cuts, these decisions need to be taken with a complete awareness of the entire cost of those actions.

Quite often arbitrary cost-cutting leads to inflated costs in the IT ecology. For example, freezing the CAPEX spending on server upgrades can result in higher on-going OPEX costs for energy consumption, maintenance, support issues and downtime. TCO is vital for analyzing these decisions in that it takes all of these outcomes into account, so that decisions can be made within a holistic framework of cost actions and reactions.

Users of technology are facing significant operating costs to run enterprise applications with escalating demands for storage, network bandwidth and compute power, just as security risks, regulatory compliance and legal requirements are mandating new levels of oversight and transparency. Vendors of technology are competing not only with each other for new spending, but with the entrenched operating costs of the status quo.

Bullet-proof business cases need to be made for any money to change hands. Competitive opportunities emerge for those that can present the best cost/benefit analysis, and TCO comparisons which can help create the case for why current solutions are more expensive and warrant replacement, or which competitive options will cost less over its lifecycle. Most important for vendors is the chronic fact that the majority of buyers do not have the tools or knowledge in order to do the TCO analysis themselves.

To be competitive in this tough economic environment, it is vital that that marketing arms sales professionals, consultants and channel partners with the automated tools in order to help buyers quantify TCO advantages.

Simple Savvy Savings recommendations to help reduce IT Costs

The economic downturn has IT executives scrambling to defend budgets, avoid cutbacks, and help the business survive. In times of crisis, CFOs invariably turn up the heat on CIOs, and although IT spending is a modest 3.1% of revenue on average, because IT is seen within most organizations as a cost center, it is usually at the top of the list for spending cuts.[1]

Unfairly, as prior times of crisis have proven, IT is cut proportionately more than most other business groups.

According to a Tech Target survey of 268 IT decision makers [2], the pressure is not unexpectedly on IT to cut costs with:

· 75% of respondents indicated that the overall economy is having a significant impact on their IT budget,
· 50% indicating a decrease greater than 10%,
· 68% indicate that more budget cuts are likely if the economy does not improve in the first half of the year.

Goldman Sachs’ latest IT spending survey predicts the impact these individual budget cuts are having on IT spending worldwide, where in 2009 for the first time since the bursting of the tech bubble in 2001/2002, annual growth in IT spending is expected to be negative. The estimate is for a -1% global decrease - a year over year 116% decline in growth (down from +6% growth in 2008, and +9% growth in 2009), that although expected by Goldman Sach’s analysts not to last as long as the last slowdown because spending prior to the pullback was more modest than the run-up to the tech bubble, still promises to have a substantial impact. [3]

Rather than be victimized, it is essential that savvy IT executives proactively prepare tangible plans for how they are going to help their organization weather the downturn. For commercial companies with declining revenues, in order to maintain profitability, the organization needs to find ways to gain scarce revenue (which is tough), or better, to reduce overall business costs.[4] . Governments and not-for-profits face similar issues with declining tax basis, donors and other sources of funding leading to budget cuts.

Of course IT cost cutting can contribute to budget shortfalls, but often the best way to cut total business costs, is not by reducing IT spending significantly, but showing how a resource focused on specific projects, and in some cases select incremental investments in IT can help drive business costs down and boost profitability.

Most important, when times are tough, smaller projects with faster paybacks are king. As a result of the tight budget, the organization gets more conservative, losing the chutzpah for blockbuster projects, and moreover wanting to assure that any monies invested today, start contributing to profitability (paying off the original investment and then yielding positive returns) in the same calendar or even fiscal year. Projects with soft benefits and big claims will not fly. Therefore, what are the projects with minimal investments in time and capital that can be made proactively to best deliver the biggest and fastest cost saving for IT and the business?

To help achieve these goals we offer three practice areas and several projects to yield the most tangible cost savings from the least amount of effort and investment:
1. Make better use of what you already have - > saving $650 USD per user per year in reduced infrastructure, energy and operating overhead costs,
2. Standardize and simplify to reduce IT management and support costs -> $700 USD per user per year in IT labor savings,
3. Help reduce unnecessary business costs and waste -> over $1,320 USD per user per year in business costs and overhead avoidance.

Following these simple savvy savings have proven to deliver $2,670 USD in savings per user per year. More importantly, these savings are all hard / tangible savings in infrastructure, labor and services costs, energy costs and overhead, easily realized, with minimal investment and quick paybacks – the kind any frugal executive would love to implement.
Implementing the Simple Savvy Savings program can result in savings of up to $2,670 per user per year.

Click here to view the full white paper:

Access a tool developed for Microsoft and powered by Alinean so you can calculate your own personal savings using these recommended initatives:

[1] Alinean ValueIT™ database of 20,000 worldwide company’s IT Spending vs. Financial Performance – 2008.
[2] Survey: Economy puts nonessential IT projects on back burner, Linda Tucci, 12 November 2008, / Tech Target
[3] IT Spending Survey: 2009 Under the Knife, Sarah Friar, Goldman Sachs IT Spending Survey of 100 managers with strategic decision-making authority at multi-national Fortune 1000 Companies, November 10, 2008,
[4] Comparing two projects, one that generates a dollar of cost saving to one that generates a dollar of revenue, the dollar in cost savings is often worth 3 to 5 times more bottom-line (profit) impact to the company. This is because that for every dollar in revenue generated as a result of a project, only a fraction of that dollar actually reaches the bottom-line, because every dollar has a cost of goods / service, and a variable sales, general and administrative (SG&A) expense. For every revenue dollar, an average contribution of less than 30% is realized in profit.

Time to upgrade that aging SAN?

Upgrading older generation networked storage devices to the latest generation can be a great way to help save costs. These new frames have several advantages over prior generations to help reduce capital costs, and more importantly save operating expenses:

1) Virtual drive provisioning enables the SAN to present a large amount of capacity to a host, then consume space—only as needed—from a shared storage pool. This lowers total cost of ownership (TCO) by reducing initial overallocation of storage capacity and simplifies management by reducing the steps required to support growth.

2) Low power SATA drives can help to reduce power costs significantly, requiring 96% less energy per terabyte than 73GB 15k rpm fibre channel drives.

3) New Flash drives provide faster performance for IOPs intensive workloads meaning less drives needed to support these IO intensive applications (fibre channel requires you to add many more disks in order to acheive similar performance). Claims put the Flash drives at 30x performance compared to 15k rpm fibre channel drives. Combining high performance with low per drive power consumption yields a 98 percent energy consumption advantage per transaction.

Depending on how old your SAN is and the drives it can support, the advantages of newer generation, higher density fibre channel drives might also play a role in your decision - with the ability to add more capacity with less physical drives helping to reduce energy costs, space costs and growth costs even more.

A tool developed by Alinean for EMC can be used to obtain a quick estimate on the advantages of new generation SANs, not only compared to legacy solutions, but compared to other recent competitive solutions as well (no registration required to see analysis results / takes less than 5 minutes)

Disaster Recovery Assessment - Are we far enough along to avoid risks?

Investing in Disaster Recovery solutions is like buying insurance. Its hard to know if you are at real risk, and you never know if you have invested enough.

Working with VMware, Alinean developed the DR Assessment tool enabling organizations to assess thier current practices in a progression of capabilities from backup and recovery competency, through disaster recovery, and ultimately business continuity.

The assessment will let organizations score where they are acheiving success, identify troublespots, and compare themselves anonymously with others who have taken the survey (by industry, size and location).

The end result is an analytical report that will help companies understand current DR risks, and receive intelligent and personalized advice on future improvement plans to reduce risks prudently.

To view the DR Assessment tool (registration not required unless you want a Word or PPT report, takes 5 minutes - fill in one survey screen and then jump to results to see if you want to complete the entire survey):

Review the white paper:

VMware launches VI configurator powered by Alinean

In order for small and medium organization's and channel partners to understand how to configure the right Virtual Infrastructure (VI) solution, Alinean worked with VMware to create the VI configurator.

By answering a few questions about virtualization system needs and requirements, the Alinean developed tool intelligently recommends the best fit VI solution, providing a complete ordering sheet and pricing information. This ordering sheet can be printed, or shared with an authorized VMware partner. The tool also features links to direct ordering from, placing the order in a shopping cart for immediate action.

You can view the tool by clicking here (takes 5 minutes and registration is not required):

SOA - What to do next to maximize ROI?

In order for IT organizations to implement a Service-Oriented Architecture (SOA) correctly should follow a prescribed roadmap of best practices in order to establish priorities, minimize costs and maximize value.

However, knowing what to do next on the SOA roadmap is not always clear.

Working with Red Hat, Alinean has created an SOA assessment tool so that stakeholders in an SOA program can review progress to date, compare progress to industry peers, and most importantly, get advice on next steps.

Click on this link to take the free assessment (fill in one section and see the results to see if this will be useful to your efforts - you only need to register if you want a report mailed to you):

Microsoft Virtualization with Hyper-V - better value?

Server virtualization is one of the best ways for IT managers to meet cost savings goals, and most are well underway with thier virtualization programs.

Microsoft's Hyper-V is a little late to the game, but as less funds are available to invest in virtualization programs, many are taking a hard look at the licensing costs for thier virtualization software, and considering Hyper-V as a way to acheive the cost savings of virtualization (a average of $8,000 per physical server consolidated per year) for minimal investment.

Microsoft offers a compelling initial value proposition with Hyper-V and System Center Virtual Machine Manager, integrating virtualization and virtualization management in tools that most Windows server managers are very familiar with, have license rights to, and for what Microsoft claims is 30% less costs than competitive solutions.

In these analyses, Microsoft indicates that consolidation ratios / performance are on par between competitive solutions, meaning that you cannot get more consolidation with one solution versus another.

Verifying the performance claims is difficult for us as we don't have a benchmarking lab, so we will let others fight out who can provide more consolidation and feature by feature accounts, As Even though we are not verifying these particular claims, we don't won't to discount the importance of these claims the value analysis and should be verified by organizations who wish to compare the solutions, particularly with the selected target host configuration and specific workloads.

What we did do is model the licensing and implementation cost advantage claims independently, comparing typical environments and using list price for all competitive licenses and Open pricing for Microsoft (available to most organizations). It should be noted that license discounts are available from Microsoft and the competition and should also factor into your own analysis.

In very small server environments of 10 or less, for organization that need to implement a new System Center infrastructure overhead (requiring at least one additional server, and more depending on the configuration) the cost of the Microsoft deployment per server is more than in larger environments, and we found that 10% licensing cost and infrastructure savings was all that could be acheived. Advantage Microsoft, but not by much.

However, in environments of 20 servers or more, 20 to 30% licensing and infrastructure cost savings was indeed the normal cost differential between Microsoft and the competition. Advantage Microsoft.

As TCO studies have taught us however from the time Bill Kirwin first developed these models for Gartner, it is important to look not only at purchase cost of the solution, but the ongoing costs over the entire ownership lifecycle. To help keep on-going costs lowe, Microsoft's competitors have delivered some powerful management tools and utilities to help keep the cost of managing the virtual environment as low as possible (upgrade management, lifecycle management, live update, etc.). While Microsoft has virtualization integrated in the operating system, and integrating VMM into System Center making the administration of the environment simple for anyone familiar with managing the environment, the lack of more powerful management features gives the nod to the competition, making the ongoing VM managament less expensive, particularly for dynamic environments. Advantage to the competition.

Do these features yield cost savings that make the purchase price savings moot? Every environment is unique so it is important to understand first the purchase cost differences for the competitive solutions. Then calculate the potenital additional benefits of the management features and see if the virtual management TCO advantages make up for the cost savings.

In all of this:

1) use your own testing to determine if consolidation ratios and capabilities of the core hyperserver are the same.

2) Work with each vendor to understand the roadmap of future capabilities, as you will be living with and expanding your virtualization environment, and your selection of the best partner to reduce TCO is important not only in gaining immediate cost savings, but even larger capabilities as your virtualization initiatives expand to encompass all data centers, workloads, development / qa labs and virtual desktop.

For your own cost comparison you can use this helpful tool to compare licensing costs (be sure to review the configurations and put in your own unique pricing proposals from the vendors):

As one source for determining if competitive features can deliver cost advantages to make up for licensing deltas, use the following:

VMware launches new version of ROI / TCO Calculator

Virtualization is one of the key cost savings initiatives that IT executives are implementing in order to tighten their belts in these uncertain economic conditions.

VMware has just released a new ROI / TCO calculator to help calculate the advantages of virtualization in not only reducing capital expenditures, but reducing on-going operating expenses as well.

An average server costs almost $8,000 USD per year in costs which can be reduced by consolidation using virtualization, including over $4,000 in annual operating expense reductions. These include:

Server hardware - $2,000
Operating system - $750
Monitoring, management and backup/recovery software - $300
Maintenance and support contracts - $750
Power and cooling - $1,200
Data center space - $800
Change management and server administration - $2,100

With server virtualization, often 10:1 consolidation of servers is possible, allowing 1 in 10 servers to be retired, growth costs reduced, and most important to organizations wanting to do more with less, reducing the person hours and time to provision physical servers, manage change and manage assets.

For desktop virtualization, one of the hottest growth areas to achieve additional cost savings heretofore untapped, a typical organization spends:

  • $415 per PC per year in amortized hardware costs per PC - could be replaced with less expensive thin client, or can have lifecycle extended (not requiring as frequent upgrades) with virtualization
  • $550 per PC per year in annual support and administrative costs which can be dramatically reduced by virtualizing the PCs, helping to better control configurations, change management and compatibility
  • $70 USD on annual energy costs per PC, which could be replaced with more power efficient thin clients

To see your own opportunities for savings and run the calculator at (registration is not required unless you want a Word / PPT report - takes less than 10 minutes to fill in questions and see results):

For more information from VMware (registration is not required unless you want a Word / PPT report - takes less than 10 minutes to fill in questions and see results):

Microsoft launches Green IT marketing campaign powered by Alinean’s research and ROI Calculators.

Saving money is top of mind for most IT executives. One way to save money, and save the environment at the same time is implementing a Green IT strategy and savings programs.

Microsoft turned to my company Alinean to calculate the value that its Green IT best practices could deliver for customers and present these finding in dynamic tools in a “GreenIT is good for the bottom line” campaign. Alinean researched the impact these practices could have on helping IT executives meet budget cutting goals, and driving environmental sustainability initiatives.

Quantifying the typical value of server consolidation using Microsoft Windows Server 2008 and Hyper-V, an average of $512 USD per server per year can be saved for each server that is consolidated. For every 100 servers removed via consolidation, this represents over 2000 metric tons of carbon emissions avoidance each year, equivalent to taking 350 cars off the road, or planting over 1,000 trees.

In a typical client computing environment, organization’s spend over $76 USD per year to power their desktop PCs. With Microsoft Vista’s power management features, typical organizations have been proven to save an average of $21 per PC per year. For a typical 1,000 desktop environment, this is equivalent to reducing carbon emissions by over 150 tons, removing almost 30 automobiles from the road, saving 17 home power loads, or planting 380 trees.

Access to the marketing campaign can be found at:

Direct access to the tools (registration is not required, takes 5 minutes to see results):