Phani's TechMedia

REASSESSING SERVER COSTS
FOR MID-SIZE COMPANIES - SUN Microsystems Defination

Most companies keep their servers for three to fi ve years. Current economic
conditions might suggest companies hold on to their installed servers longer,
but that may not be the best strategy to employ.
With pressures to rein in budgets, a server refresh to Sun Microsystems® servers
based on the Intel® Xeon® processor 5500 series delivers the performance and
energy savings that businesses require today. Additionally, signifi cant cost cutting
can be realized through consolidation and virtualization without compromising
performance. In fact, organizations can realize up to a 9:1 server replacement (of
single core systems from 2005) and achieve up to 90 percent lower operating costs
and an estimated 8 month payback1.
1 Based on internal Intel estimates as of Nov 2008. Consolidation ratio based on performance comparison of Intel Xeon processor 5500 series
vs. single-core Xeon processor using SPECjbb2005 bops (business operations per second). Eight month payback is an Intel estimate based
on comparing the cost savings achieved in 9:1 server consolidation from both power/cooling and OS licensing versus the estimated cost of
purchasing a new server featuring Intel Xeon processor 5500 series.
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efficiency that enable companies to efficiently consolidate
servers, thus helping them to significantly
cut these costs and reduce staffing requirements to
manage the servers.
A CRITICAL TIME
IT organizations within companies of all sizes are
being called on to reduce spending. In Ziff Davis
Enterprise’s CIO Insight 2009 IT Spending Survey2 of
219 IT managers, 80 percent of the respondents said
they were under more pressure to reduce costs this
year than they were last year.
At the same time, IT is under more pressure to provide
more services. Employees want access to their
e-mail at all times, business partners need access
to shared resources, and customers want to peruse
Web sites, get account information, and place orders
on their schedules, not the company’s. This nonstop
nature of most businesses is forcing IT to make
all applications available 24/7/365.
Meanwhile, many companies are trying to grow their
businesses and add new services to make up for any
revenue shortfalls or customer losses that may have
occurred. This means that IT must support even
more users and new business applications.
Providing support to satisfy these IT needs using
existing servers has cost implications. For years,
companies have typically deployed a new server for
each new application, which has resulted in great
inefficiencies. In many situations, it is quite common
for CPU, memory, and storage utilization rates to be
in the 10 to 15 percent range or lower. Besides not
using computing capacity efficiently, this approach
incurs very large operational costs. According to
IDC3, companies spend $8 in maintenance for each
$1 invested in IT hardware. This means a $2,500
server would have $20,000 in additional costs associated
with it for maintenance. If a dozen such
servers could be eliminated through consolidation, a
company would thus save $240,000 in management
costs over their lifetime.
Similarly, the electrical costs to run and cool existing
servers must be factored in. Energy costs have
become a much more important issue within the
last few years due to the increased price for electricity
and the growing desire for companies to be
greener. Because the attention paid to these costs
is relatively new, many installed servers were likely
purchased with no consideration of their operational
costs such as power consumption.
Until now, each generation of servers and processors
has consumed more power and needed more
cooling. And as a result, IDC estimates4 that companies
pay about 50 cents to power and cool servers
for every dollar spent on server hardware.
Additionally, as companies have added more servers
over the years, the space required to house those
servers has grown, too. If companies continue with
their current mode of operations and simply add
clones of existing servers without consolidating,
space demands and expenses will grow. This can be
a costly proposition. Industry estimates peg the cost
of adding data center space to be about $1,000 per
square foot5.
Furthermore, companies that have had to downsize
staff (something that is quite common with today’s
economic conditions) often want to reduce their
office space. If the servers take a disproportionate
percentage of the square footage, reductions here
will be hard to make.
WHY A CHANGE IS NEEDED
Most companies keep their servers in operation
from three to five years. Let’s assume a company
is at or approaching the four-year mark and has
to make a decision. Does it stay with the installed
base of servers and try to hold onto them until the
economy improves, or does it swap them out for
something else?
As previously mentioned, keeping these existing
servers means paying for management, electricity,
and floor space, as well as upkeep fees for service
contracts and software updates.
If the servers are three or four years old, they are
likely powered by old single-core or dual-core Intel
Xeon processors, respectively. New Sun servers,
based on the Intel Xeon processor 5500 series, offer
significantly more processing power than their predecessors.
So these new systems can be leveraged
to consolidate applications onto fewer servers.
For example, the performance boost6 afforded
by the Intel Xeon processor 5500 series in the
new Sun servers allows up to a 9:1 consolidation
when replacing four-year-old single-core processor
servers, and a 3:1 or 4:1 consolidation when
the new servers replace three-year-old dual-core
processor servers.
In both cases, management costs are cut, licensing
fees for server operating systems shrink, and annual
energy costs are reduced. In a 9:1 server replacement,
companies can achieve up to 90 percent lower
operating costs and an estimated 8 month payback.


THE POWER OF VIRTUALIZATION
Additional costs savings can be realized by using
virtualization in conjunction with consolidation.
Virtualization simplifies the deployment and administration
of applications running on a server.
And it helps make more efficient use of compute
resources so that more applications may share a
single server without conflicts or contention for
system resources.
Here again, Sun servers based on the Intel Xeon
processor 5500 series offer much higher raw performance
compared to previous-generation servers7.
This allows more virtual machines to run on a single
server, thus compounding the cost savings benefits
of pure consolidation.
Further, Sun servers include features that
complement Intel’s new processor technologies
and enhance system performance in other ways.
For example, Sun servers are optimized for the
Intel Xeon processor 5500 series, and can greatly
leverage their performance-enhancing and
energy-saving capabilities.
And since most companies have different compute
requirements, Sun Microsystems offers a variety
of servers based on the Intel Xeon processor 5500
series from entry-level rack systems to high-density
blade systems (see chart on page 4). This gives
companies the flexibility to support a wide range of
business needs, from web and application services
to high-performance computing.
COST SAVINGS ABOUND
Sun servers bring ease-of-use benefits that help
cut expenses. In particular, the biggest expense associated
with IT equipment is personnel costs. That
includes salaries, training, and the cost to find and
hire qualified applicants.

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Standards-based Sun servers powered by the
Intel Xeon processor 5500 series enables efficient
consolidation, thus reducing staffing demands. And
the skills needed to manage the systems are quite
common, thus potentially lowering recruitment and
training costs.
To illustrate, consider that the average salary range
for IT administrators in 2009 is between $52,750
and $82,500, according to an annual salary survey
conducted by Janco Associates8. To be conservative,
let’s assume the IT staff is being compensated at the
low end of that salary range, and that a modest 5:1
server consolidation is performed.
That means for every five people presently dedicated
to IT server management, only one would be
required to manage the new Sun servers. This is the
equivalent of gaining four new employees without
increasing the IT organization’s budget. A company
thus could allocate these employees to work on other
IT projects that may have stalled due to lack of staff,
or position them in support of new business development
ventures that will help grow the bottom line.
Even more significant consolidation ratios can often
be achieved as well. If, instead of a 5:1 ratio, a company
can consolidate nine servers onto one, it would
essentially cut in half the resource requirements.
Finally, because Sun servers are standards-based,
they can be managed with common IT skill sets.
This makes it easier to find, hire, and train workers
to manage them.
BENEFITS OF A SYNERGISTIC RELATIONSHIP
Sun and Intel technologies separately offer improved
performance, energy savings, and easier
manageability.
Sun Microsystems has a long tradition of meeting
the compute needs of businesses of all sizes. Its
systems expertise ensures optimized performance
for database, Web, and streaming media applications
– the applications that companies rely on to
remain competitive and grow their businesses.
Intel offers the confidence that applications can be
easily migrated from one generation’s systems to
another. Moreover, the performance-boosting characteristics
of its processors ensure that applications
will run optimally.
But to improve on these areas, Sun and Intel have
worked together to optimize the systems for virtualization
and Java technologies. Companies using
Intel processor-based Sun servers thus get honed
performance that allows the servers to support
more simultaneous users, virtual machines, or Java
sessions. In this way, companies can reduce the
number of servers they need to meet certain levels
of service delivery.
Another synergistic benefit includes leveraging Sun’s
power management and energy savings solutions.
For example, Sun servers include Advanced Thermal
Management (ATM), which relies on specially designed
doors and backplane panels that channel air
more effectively. ATM can reduce cooling costs and
cut down on carbon emissions as well. The energy
> SUN SERVERS BASED ON THE INTEL XEON PROCESSOR 5500 SERIES
SERVER MODEL SERVER TYPE
PROCESSORS
SLOTS / CORES MEMORY
Sun Fire X2270 1RU Rack 2 / 4 or 8 Up to 96 GB
Sun Fire X4170 1 RU Rack 2 / 4 or 8 Up to 144 GB
Sun Fire X4270 2 RU Rack 2 / 4 or 8 Up to 144 GB
Sun Fire X4275 2 RU Rack 2 / 4 or 8 Up to 144 GB
Sun Blade X6270
server module
Blade 2 / 4 or 8 Up to 144 GB
Sun Blade X6275
server module
Blade 4 / 8 or 16 Up to 192 GB
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savings can be compounded by leveraging Intel®
Turbo Boost Technology that lets IT managers automatically
turn off individual cores and Intel® Dynamic
Power Management Technology that optimizes the
power use of the processor, chipset, and memory
based on application and business requirements.
To deliver a complete solution to meet the computing
needs of companies today, the server hardware
is complemented by Sun’s networking and
storage technologies. By combining Sun and Intel
technologies into a single solution, Sun servers
enable IT organizations to reconsider what type
of applications can be run, substantially increase
the number of virtual machines that can be supported
on a single server, and enable dramatic
consolidation in the number of servers that need
to be managed.
In addition, Sun offers services and support to
help IT organizations with server deployments and
management.
The end result is that Sun servers based on Intel
Xeon processor 5500 series are soundly backed with
both companies’ commitment to making their products
work optimally for your business. < > STAFFING IMPLICATIONS IN A SERVER CONSOLIDATION
NUMBER
OF SERVERS
STAFF REQUIRED TO
MANAGE SERVERS
STAFFING
IMPLICATIONS
BEFORE A CONSOLIDATION 100 10
AFTER A 5:1 CONSOLIDATION 20 2 Equivalent of gaining
8 new employees
AFTER A 9:1 CONSOLIDATION ~10 1 Equivalent of gaining
9 new employees