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Blade Server TCO and Architecture – You Cannot Separate Them

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.]

WW Server Spend & Mgmt

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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