You Can Save Money And Get More Performance At The Same Time
November 2, 2020 Timothy Prickett Morgan
A few weeks ago, we had a chat with John Richards, vice president of Global Asset Recovery Services, the part of IBM that sells certified pre-owned Power Systems, IBM Z and data storage, as well as parts and features, for these devices and is arguably the largest supplier of such equipment in the market. We talked very generally about the differences between the used (sometimes called second-hand) and certified pre-owned (often abbreviated to CPO) markets for Power Systems, and how this market has changed over time, but still can provide significant value to customers – and at a much lower capital outlay than is possible buying new equipment, even at a reasonable discount level. In this article we will take a closer look at the total cost of ownership advantages of CPO through an example of POWER8.
Historically, when IBM sold a new machine to a Power Systems shop, the older machine was either used as a secondary backup machine for disaster recovery or high availability, or perhaps is given over to the programmers for test/development. The latter scenario was the typical case in years gone by, but with the advent of logical partitioning more than two decades ago, more times than not companies don’t have a secondary or tertiary machine for the programmers to play with, but rather just set up a logical partition with a modest amount of compute and memory. This is easier operationally – moving data is lightning fast over a memory bus that is emulating a virtual LAN, as is the case with partitions running atop the PowerVM server virtualization hypervisor, and you only have to support one machine rather than two. And this feeds back into lower operational costs because two systems do not have to be maintained and supported.
Because companies don’t keep older machines around for other uses thanks to partitioning, there is a healthy pool of POWER8 machinery that is available at very aggressive prices and that make very good sense as upgrades to customers with older POWER7 or POWER7+ systems, or even older vintage systems with POWER6 and POWER6+ processors in the cases where customers are that far back. If this were two decades ago, the pool would not be as large relative to the installed base.
Moreover, for customers on the POWER7 and POWER7+ machinery, the POWER8 core gives a very substantial upgrade in raw performance per core and across the system, as gauged by IBM’s Relative Performance (rPerf, for AIX and Linux workloads) and Commercial Performance Workload (CPW, for IBM i workloads) benchmark tests.
There is an interplay of core performance (driven by architecture and clock speed) and socket scalability and throughput (driven by the number of cores that IBM puts into each Power processor in a given generation), so shoppers have to be cognizant that all cores are not the same. In fact, this plays into their favor, as we will explain in a moment. In general, normalizing as best we can for a 4 GHz performance level, the POWER6 chip had about 3,500 CPWs per core and could scale to two cores in a socket, and the POWER6+ had about 3,900 CPWs per core. With POWER7, IBM made huge architectural leaps and nearly doubled the per-core performance to around 7,300 CPWs and goosed it a little to around 7,500 CPWs with the POWER7+ chip; both POWER7 and POWER7+ had a dozen cores per socket, so the combination of more cores and faster cores was immense for the Power5/5+ and POWER6/6+ customers who made the leap to POWER7/7+. With POWER8, the normalized 4 GHz performance per core was around 11,750 CPWs, give or take, a 60 percent increase from POWER7+, and with POWER9 it went up by about 50 percent again to around 17,500 CPWs.
That per core performance is critical, particularly for customers who are on older POWER7 and POWER7+ systems who are running out of gas on their machines and are thinking about moving up to POWER8 or POWER9. And that is because software is often priced on IBM i and AIX platforms based on the cores activated, not at the system level. That is certainly true of IBM i with its integrated relational database or AIX plus either Db2 or Oracle.
“We have good availability of inventory in POWER8, which is really the sweet spot for Global Asset Recovery Services,” explains Richards. “Clients are making distinctions between POWER8 and POWER9, but what we know for sure is that POWER8 is better than POWER7 and POWER7+ in terms of security for IBM i and Linux, which can make use of the cryptography acceleration on the POWER8 chip. The POWER7 machines have been in the field more than ten years, and POWER7+ for more than eight years, and they have long since been withdrawn from marketing and standard IBM maintenance has been discontinued. And the limited end of life maintenance on these older systems is inherently unpredictable because it is subject to parts availability and it can also be costly. Moving up to POWER8, the machines offer better operating system support, lower software licensing and maintenance, and lower power consumption per unit of compute.”
For customers with multiple POWER7 and POWER7+ systems, the POWER8 iron offers the ability to consolidate multiple machines down to one, too. And the POWER8 machinery is a better bridge to more current releases for POWER7 and POWER7+ customers because they don’t necessarily have to move all the way up to IBM i 7.4 or AIX 7.2 to run in native mode, as this chart below shows:
For IBM i shops, the POWER8 iron can run IBM i 7.1 in native mode and all the way up to IBM i 7.4 as customers deem necessary. POWER9 does not support the legacy IBM i 7.1 release, which many customers still require, which is why IBM has just offered a further extended maintenance for this release, adding another two years out to April 30, 2023. The support for AIX is a bit trickier in that older releases are supported in a mode that emulates older hardware, but as you can see, POWER9 processors only support AIX 7.2 in native mode, while POWER8 processors can run AIX 7.1 or AIX 7.2 in native mode.
The upgrade matrix from any given Power processor generation with a specific processor feature – meaning its core count and clock speed – to any other more recent Power processor generation is quite large. There are literally thousands of possible combinations. But the good news is that thanks to the many customers who have traded in machines as they bought new iron, there is a large inventory of earlier generation machines that end up in the hands of IBM Global Asset Recovery Services.
Here is just one example, which shows moving from a Power 770 (9117-MMB), based on POWER7 chips, and a Power 770+ (9117-MMC), based on POWER7+ chips, to a Power S8814 (8286-41A), a Power S824 (8286-42A), a Power E850 (8408-E8E), or a Power E850C (8408-44E). Take a look:
As you can see, it takes fewer cores at the same level of simultaneous multithreading (SMT4 in this case) to get roughly the same performance, and with SMT8 threading the performance can be pushed a little further. And with the cores kept constant and the clock speeds boosted a bit, the performance is almost 2X. (Just because IBM talks about Power processor performance normalized for 4 GHz does not mean that clock speeds are always the same. This is a way to show the effect of architectural changes on performance separate from clock speed.) Here is a good way to think about the options that customers with a Power 770 or Power 770+ has when looking at POWER8 iron.
The effect of being able to have slightly more or significantly more performance while having fewer cores is a big deal because of the per-core software licensing fees and support costs that a lot of software has. And for machines that have software licenses based on tiers, these are generally the same or lower tiers, and there is a process to get certified on a lower tier with many third parties, which also saves money. All of this takes effort, of course, but as you will see in a moment, the savings are huge.
Now, let’s take a specific example of a POWER7 to POWER8 comparison, moving from a single-node Power 770 machine to a Power S824:
In this case, the goal was to get machines with the same performance to illustrate the cost savings in hardware, operating system, database software, maintenance, and power and cooling. The Compute Performance Metric (CPM) is a Precision IT Tool transaction processing benchmark that is used to gauge the relative performance of machines, like rPerf and CPW. In this case, there is a Power 770 with a half dozen six-core POWER7 processors being pit against a two-socket Power S824 with 12-core POWER8 processors running at nearly the same clock speed.
Now, let’s look at the costs:
The POWER7 machine at this hypothetical customer site is running AIX and an Oracle database, but the same principles apply to the IBM i platform on the same iron. There is no hardware cost since it is paid for, but there is a fair amount of maintenance over three years and a fair amount of AIX subscriptions over those three years, and a tiny sliver of power and cooling. But the Oracle database licensing and support costs across the 36 cores in that Power 770 system are huge: about $1.15 million. For an investment of $31,200 in a certified pre-owned Power S824 with only 24 cores, the maintenance costs are nearly invisible, the power and cooling is less but barely visible, the AIX costs go down significantly, but the Oracle database costs are cut dramatically, thus shaving $473,9000 off the cost of supporting the same Oracle workload over three years – about a 35 percent savings. In general, says Richards, customers who acquire an POWER8 machine that delivers equivalent performance to a POWER7 machine as in the comparison above will see a 40 percent to 50 percent TCO savings. And of course they can either just take the savings if their workloads are not growing or they can plow some of that savings into buying a more powerful POWER8 machine if their workloads are growing.
Part of the reason these TCO comparisons work out is due to the performance of the POWER8 cores compared to the POWER7 and POWER7+ cores, but the other part is that POWER8 machinery is selling for something around 20 percent of their original list price, according to Richards, and it is nowhere near the end of its technical life. You can check out the IBM Certified Pre-Owned Marketplace yourself and see if the prices are great, and if you do, IBM is offering a limited time 15 percent off your first online purchase.
“We have very flexible financing options, and we can do that because our inventory is already purchased, it is already a sunk cost,” says Richards. “We are not managing the inventory like a financing company, which has to buy the machines and then give credit to the customer who uses it and pays down a lease. We can be very generous with our financing terms.”
And in uncertain economic times, this could be the critical factor.
This content is sponsored by IBM.
