I have heard this a lot over the years, in one way or another – “The only price that really counts is what I actually pay for my server.”
Alright, so why bother with a TCO analysis? The truth is that server acquisition costs only contribute 20% (or less) to a 3 year server TCO. Management and other OpEx costs contribute the remaining 80%. If you go to 5 years, the acquisition cost starts to fade into obscurity.
There are a number of studies you can find online that call out server acquisition cost at 15% to 17% of TCO, or even less. One is an Information Week report that quotes a 2007 IDC study. The Information Week article is very good, with multiple sources and definitely worth a read. Since 2007 there have been myriad improvements in processor performance, as well as, server and architectural innovations (Cisco UCS). All of these supply ample rationale for a low CapEx component for Server / Data Center Total Cost of Ownership, see the figures below.
[The WW Server Related Spend… chart is from IDC, “New Econmoinc Model of the Datacenter”; IDC 2011] [Only the graph is from the cited source, the table is my analysis of the numbers presented by the graph.]
Summary of the figures above:
Server purchase spend and associated power & cooling spending is flat (red and green bands above)
Physical server management cost is the down (blue aband bove)
Virtual server management cost are way up and increasing (orange band above)
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Tags: blade server TCO, capex, Cisco UCS, data center, data center TCO, opex, server, server architecture, server TCO, UCS
Almost a year ago, I wrote my first blog post detailing what customers have been saying about their UCS experiences in our Case Studies, Solution Briefs, etc.
The findings have been updated with the latest studies. While the percentages haven’t changed much, the number of customers reporting similar results (like Cisco’s market share) has gone up dramatically.
These results are limited to where the customers specifically stated a savings or where the savings is easily derived from the numbers stated.
- 61% reduction of ongoing administrative/management costs based on 27 customers.
- 54% reduction in power & cooling based on 44 customers.
- 77% reduction in cabling with an average cost savings of 71% based on 21 & 6 customers respectively.
- 41% reduction in other operations costs based on 13 customers
- 84% reduction in provisioning times based on 71 customers.
To help explain how customers achieved these results, the Cisco Unified Computing System (UCS): Changing the Economics of the Datacenter presentation walks you through UCS technology innovations and how they lead to TCO improvements. Along with this data, the presentation has been updated with current cost comparisons as well as third party deployment test reports.
Would you like to learn more about how Cisco UCS can help you? There are more than 270 datacenter case studies currently on Cisco.com. Additionally, there is a TCO/ROI tool that will allow you to compare your existing environment to a new UCS Solution. For a more in-depth TCO/ROI analysis, contact your Cisco partner.
Tags: B-Series, blade server, C-Series, cabling, capex, Cisco, HP, opex, ProLiant, rack server, ROI, server provisioning, tco, UCS
I recently worked with Loughborough University on a financial impact study of their initial deployment of Cisco UCS. The study documents their findings of a dramatic improvement in IT efficiency, bearing out the advantages that attracted them to the UCS solution. Loughborough’s Customer Case Study has been revised with the results of this TCO study as well new details on the next stage of their deployment of Cisco Virtual Experience Infrastructure (VXI) Smart Solution.
We examined Loughborough’s projected growth rates and compared the continuation of their previous rack server environment against a UCS solution combined with an expansion of their virtualized environment. Server consolidation and reduced administrator workload contributed to exceptional results: a total savings of US$878,789 (40% OpEx and 60% CapEx) with a 225% ROI and 22% IRR. Compared to the previous environment, Loughborough’s UCS deployment will drive down cost in several key areas over the coming five years:
- server hardware – 38%
- switching infrastructure and cabling – 80%
- power and cooling – 49%
- new server provisioning – 79%
- virtualization software – 39%
“When we compared the legacy server and network with one based on Cisco UCS, TCO effectively halves over a five-year investment lifecycle.”
Dr. Phil Richards, Director of IT, Loughborough University.
As a result of Cisco’s Unified Fabric approach, the study shows that Loughborough will need only six switches (three redundant pairs) to support their end state vs. 30 in their legacy environment and a corresponding reduction in cables from 646 to just 44.
These results are typical to what other customers achieve when they switch to UCS. See my first blog post, Yes, Cisco UCS servers are that good.
Would you like to learn more about how Cisco UCS can help you? There are more than 250 published datacenter case studies on Cisco.com. Additionally, there is a TCO/ROI tool that will allow you to compare your existing environment to a new UCS Solution. For a more in-depth TCO/ROI analysis, contact your Cisco partner.
Tags: B-Series, B200, blades, capex, education, opex, ROI, tco, UCS, Unified Fabric, vxi
In this global economy, the people you deal with are more dispersed than ever. Yet at the same time 75% of business executives consider in-person collaboration an imperative. The survey that revealed that figure is an interesting read, and validates experiences that we’ve all encountered first-hand. How many times have you experienced communications that were misinterpreted or failed to engage participants effectively, negatively impacting relationships, projects, and business outcomes? As the pace of business gets faster and more complex, how do you: get everyone on the same page; scale resources to be in more places at once; and maintain face-to-face relationships with widely dispersed colleagues, customers, agencies, partners and advisors?
Visual collaboration is the next stage for many businesses as they put in place collaboration strategies to drive even higher levels of productivity for their business. However, for some organizations the up-front costs — to deploy the technology, train or acquire the right IT skill set, and provide the needed consistent level of inter-connectivity — can be barriers preventing them from accelerating business impact through video.
With our October 16 announcement, customers now have more choice in how they consume visual collaboration with Cisco TelePresence-as-a-Service (TPaaS). Cisco TPaaS places the Cisco TelePresence infrastructure in the cloud, powered by Cisco’s best-in-class architecture and network and managed by trusted Cisco certified partners. With this as-a-Service offering, there are even more flexible options for the deployment of telepresence and the acceleration of business impact through video. With Cisco TPaaS delivered from the cloud, organizations experience a predictable OpEx model, simplify operations (including interoperability with legacy video solutions), reduce risk of technology obsolescence, free IT resources to focus on core and strategic initiatives, and gain capabilities to scale based on business demand.
Expanded Cisco TPaaS service options help users:
Meet any time with an in-person experience. New “rendezvous” meeting options provide a personal conference bridge which can be used to meet securely with your colleagues, customers and partners — no scheduling required.
Work the way they want/need to work. With cloud-based Cisco TPaaS, it is simpler and quicker for businesses to scale video and telepresence to those specific people who can create the greatest impact using video. Companies simply provide or lease the video and telepresence endpoints needed to meet users’ varying needs — from immersive in-room solutions to desktop to employees’ personal mobile devices. A qualified Cisco partner handles the rest.
Customize and control their meeting environment. New active meeting management options enable real-time meeting controls to help users create the appropriate atmosphere for the topic and attendee profile. For example, hosts can quickly and easily manage participant add or drops, creating personalized messages, changing the layout, muting background conversations, securing meeting access, extending a scheduled meeting or capturing a meeting roster.
In our November 14 webcast, our Cisco product experts will provide more detail on Cisco TPaaS and other cloud collaboration announcements, and also provide some guidance on finding the right deployment model for your business. Hope you can join us.
Tags: cloud, collaboration, opex, TelePresence-as-a-Service, the power of in-person, TPaaS, visual collaboration
Imagine a world where businesses can increase efficiency, reduce costs, and securely share and store data across multiple networks, regardless of location. Until a few years ago, this concept seemed unattainable to most.
Fast-forward to 2012, and just about every company in the industry is working to make the cloud a part of its business model. Organizations are beginning to see the cloud as a long-term industry transition in the same way that client/server computing was a transition from the mainframe era.
Cloud is the next step in the evolution of the Internet. And that evolution is happening now. The cloud is fundamentally changing the way people and businesses consume services.
Early discussions have focused primarily on the different types of clouds leaving businesses wondering what option is best for them. In reality, it can take several types of clouds to solve a variety of business challenges. We’re moving to an interconnected world of many clouds – where users want to experience cloud services anywhere, anytime, on any device – and businesses want IT as a service.
Clouds offer compelling economics – reducing CapEx and OpEx, sharing of cloud assets, and dynamic, on-demand delivery of services. They enable flexible business models that allow services to be launched more rapidly, with greater efficiency and more scalability, regardless of the geography or size of business.
Curious on what “cloud formation” is right for you? Read More »
Tags: capex, Cisco, ciscops12, cloud, cloud formation, opex, partners, services, Wendy Bahr