Counting The Cost

November 27, 2017 Timothy Prickett Morgan

We are strong believers in being thorough with both the technical and economic analysis of platforms. In the absence of a lot of performance and pricing information on Power Systems iron, we are always looking for ways to help IBM i shops try to figure out what to do when they are thinking about upgrading a machine or just tossing out the old one and buying a new one.

IBM isn’t shipping Power9-based machines that can support IBM i as yet, and it is not expected to do so until early next year. But in the meantime, Big Blue wants customers who might otherwise wait to buy now, using their 2017 budgets. As we reported several weeks ago, IBM has a deal that is offering discounted compute on entry Power8 machines, which it claims to offer Power8 compute at Power9 price/performance. It is hard to say if that is true without seeing Power9 pricing, but as we have shown, the discounts are not all that deep for modest machines with a few cores when the rest of the system components, including system software, are added in.

Still, customers have to do something and make the best deals that they can. To help customers, its reseller partners, and its own sales reps make purchasing systems on Power Systems iron decisions, IBM has fired up a set of total cost of ownership calculators to reckon the relative cost of Power5, Power6, and Power7 iron against Power8 iron for a wide variety of IBM systems software stacks as well as ERP software from SAP, Oracle (JD Edwards), and Infor. There is another TCO calculator that compares X86 and Power iron supporting various open source relational databases and NoSQL data stores. (You can see the Power8 cost savings estimators at this link.)

The TCO calculators allows the comparison of the Power8 iron bought new to those earlier generations of machines, and it looks like they are bought used or reckoned as being already installed. The TCO span can be three, four, or five years, and it is really focused on looking at how the savings in hardware maintenance, software maintenance, labor, and facilities costs. You can mix multiple partitions or have bare metal setups. Just for fun we looked at running JD Edwards workloads with various numbers of users, just to see the assumptions IBM is making and if these configurators are useful.

I think that any case that can be made that helps IBM i shops get up-to-date systems and plan for a fruitful future on the platform is a good thing, but this new TCO configurator needs to spit out some detailed information about the assumptions it is making. Take the very first comparison I did as an example, which is a Power5-based iSeries 520 supporting 50 JDE users. First of all, I have no idea how many cores, what speed, how much memory, storage, networking, and other stuff is in the iron, and what software is being assumed, so I am immediately nervous. And I similarly have no idea what the configuration of the Power S814 machine is that this TCO configurator recommends. What this TCO calculator does do is kick out pretty pictures that break down the costs in the following areas: hardware purchase, hardware maintenance, server migration, OS software, application software, electricity, and space. Here is what it looks like for these two machines stacking up the cost categories:

And here is what the charts look like just for the straight line costs over three years:

These are very pretty charts, mind you, and while that should not be so persuasive to human beings, it clearly is. But we gotta shake the pretty off and look at the data.

My first criticism of these results is that I don’t think there is any company on earth that has ever or will ever pay over $800,000 in hardware maintenance on an iSeries 520 machine. And that is the dominating factor in why the TCO comparison here looks attractive. Also, the comparison includes the application software licenses, which implies that this is a new installation, which is not the case for most customers. They already own the software, and they just want to move it. Perhaps there will an incremental licensing fee for applications because of software tier changes, but nothing like this TCO calculator is implying. Personally, I would like to have seen a TCO calculator that showed how to move existing software with already paid for application software licenses to be moved over.

The results just for the JD Edwards scenarios that I did are all over the map, but generally, the newer the iron, the lower the TCO, and this is, of course, absolutely expected. Take a look:

The TCO calculator does not actually spit out real numbers – this would be very, very useful – for the costs, but just draws charts. I have eyeballed the numbers as best I can in the 12 scenarios I plotted out in the table above. What I found interesting is that IBM did not allow TCO comparisons within generations – say, comparing two Power7+ machines – and also did not allow for the current Power8 machines to be compared to Power7+ iron with the exception of the Power 760+ server, which is not really relevant to most IBM i shops.

In general, I think all of these TCO numbers are pretty high compared to what I think of as reality. It is hard to say for sure without seeing all of the numbers, but the accumulated costs for the older JD Edwards systems seem to be padded very highly. And I sure hope the Power8 system costs are not as high as shown, too.

If you want to see all of the 24 charts for the dozen scenarios I ran, they are in this Word document as screen shots.

Again, I don’t mean to be overly critical. I just want the TCO calculators to reveal more of their assumptions and to allow us to change some of those assumptions to fit real-world scenarios. Or at least what we call real world. I guess, in the end, this just reinforces what we already know: we need to do our own TCO analysis to get some numbers that we trust. But it never hurts to get ideas from the outside and improve upon them.

Have fun playing, and have fun buying.

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