virtualization: changing the economics of it

© 2011 IBM Corporation

Inna KuznetsovaVice President, IBM Systems Software

Virtualization: Changing the Economics of IT


Smarter Systems for a Smarter Planet

Today’s IT Infrastructures are under pressure

10xdigital data is projected to

grow tenfold from 2007 to 2011

70%of companies in the global 1,000 will have to modify their data centers to meet increased

power and cooling requirements

80%of digital data growth will be “unstructured” and requiring

significant effort to “understand” and analyze

1012

devices will be connected to the Internet by 2011

6 terabytesof information is exchanged

over the Internet every second

69% of all server workloads will

be virtualized by 2013



Yet, IT organizations are expected to do more with fewer resources.

Challenges

Many 2010 IT budgets at 2005 levels

Increased service level requirements

Few resources for innovation and new projects

*Source: Forrester, Base 695 NA IT organizations

66% of IT budgets allocated to

maintenance

Most firms have lower operating and capital IT budgets*

OpEx Budget CapEx Budget

- 36%- 32%

+ 9% + 7%

-40%

-30%

-20%

-10%

0%

10% INCREASE IN

BUDGET

DECREASE IN

BUDGET



IBM solutions deliver additional business value beyond basic virtualization offerings

Consolidate Resources• Improved efficiency and utilization of

IT resources

Manage Workloads• Improved IT staff productivity with

integrated systems management dashboard

Automate Processes• Consistent and repeatable processes

based on best practices, business priorities and service level agreements

Optimize Delivery• Self provisioned by users based on

business imperatives, unconstrained by physical barriers or location.

ManageWorkloads

AutomateProcesses

Optimize Delivery

Consolidate Resources

NetworkStorage

Server

Increased Agility



IBM virtualization solutions improve business agility and staff productivity

BEFORE VIRTUALIZATION

CONSOLIDATE RESOURCES

MANAGE WORKLOADS

AUTOMATE PROCESSES

OPTIMIZE DELIVERY

BEFORE VIRTUALIZATION


MANAGE WORKLOADS

AUTOMATE PROCESSES

OPTIMIZE DELIVERY

15:1 50:1100:1

300:1

1200:1

SOURCE: IBM Client Engagements. Number of server images per IT staff

SOURCE: IBM Client Engagements. Response time to delivery of business value

Virtualization with Integrated Service Management to improve business agility

Virtualization can increase IT staff productivity

Improved staff productivity with increased

“Server : System Admin” coverage ratio

Accelerated response time with close IT alignment to business priorities

6 MONTHS

2 MONTHS

2 HOURS 2 MINUTESINSTANT

Improved Productivity

Accelerated Responsiveness



Basic virtualization on x86 delivers immediate benefits

Benefits• Improved IT efficiency and utilization thru basic virtualization• Reduced number of physical servers (eg file, print, web, email services)• Reduced energy costs

8:1 server footprint consolidation

$600 average energy savings per server

- 10% reduction in electricity costs per workload over 3 years

SOURCE @ http://download3.vmware.com/vi3/VMware-Infrastructure-Guide-to-Bottom-Line-Benefits.pdf




Virtualizing on IBM System x can greatly extend the benefits from consolidation

Benefits• Improved IT efficiency and utilization• Reduced complexity by reducing the number of physical servers, storage,

and network devices• Improved resource utilization that helps reduce energy costs• Reduced floor space requirements

+ 78%more Virtual Machines on eX5 for the

same license cost

- 50% less VMware license cost on eX5 for same

number of virtual machines

- 96% reduced energy costs with new HS22/V blade servers


Improved business agility



Fit for purpose, workload optimized systems provide customer choice to meet their requirements

Benefits• Improved IT efficiency and utilization• Reduced complexity by reducing the number of physical servers, storage,

and network devices• Improved resource utilization that helps reduce energy costs• Reduced floor space requirements

32 X more virtual CPUs with PowerVM over

basic VMware

3 X more LIVE VMs per server with PowerVM

over basic VMware

+ 65% PowerVM outperforms basic VMware

running the same Linux workloads



SVC



IBM Systems Director improves productivity and service management with a “single pane of glass” across IBM platforms (virtual and physical)

Benefits• Cross platform hypervisor support and systems management• Improved IT staff productivity with single, integrated systems dashboard• Ability to manage physical and virtual resources• Policy-based energy management

- 34% reduction in server management cost

using IBM Systems Director

29:1 reduction of storage administration points

- 38% reduction in labor hours required to

manage storage

• VMcontrol• Storage Control• Network Control• Active Energy Management

• Tivoli Management Framework• Tivoli NetView• HP OpenView• Microsoft SMS• Microsoft Operations Manager• CA Unicenter NSM• BMC Patrol


MANAGE WORKLOADS


SVC

Firmware updates(eg BIOS, UEFI)



Tivoli further improves staff productivity with better service management across IBM and non-IBM platforms

- 40% reduced storage cost thru

improved utilization with Tivoli

- 40% reduced labor costs thru

increased server to admin ratio

- 34% average IT cost for PowerVM solution than

comparable VMware workloads Benefits• Cross platform hypervisor support and systems management• Improved IT staff productivity with single, integrated systems dashboard• Ability to manage physical and virtual resources• Reduced complexity from physical and virtual resources sprawl


MANAGE WORKLOADS

+


SVC



IBM improves business agility with automated processes across your entire IT infrastructure

32 X more virtual CPUs over basic VMware

- 70% reduced cost using XIV as Tier 1 storage with self-healing / self-tuning virtualization

+ 65% PowerVM outperforms basic VMware

running the same Linux workloadsBenefits• Deploy IT services faster to meet business needs• Reduce software license costs based on actual software usage• Provide audit trails with traceable processes and approval routings• Integrate with process governance


MANAGE WORKLOADS

AUTOMATE PROCESSES


+SVC



IBM turn-key virtualized cloud solutions empower your business with new levels of agility using elastic scalability


MANAGE WORKLOADS

AUTOMATE PROCESSES

OPTIMIZE DELIVERY

2000 + Virtual machines per rack

- 30% reduced systems administration costs

- 30% reduced provisioning costs

7 X more storage scalability

CloudBurst

+SONAS

+IBM

Service Delivery Manager


Benefits• Leverage cloud computing as a new business and delivery model where a

‘virtual enterprise’ is unconstrained by physical barriers and location• Self provision as required

+SVC



IBM delivers end-to-end solutions through out your virtualization journey to increase your business agility on your cloud computing transformation


MANAGE WORKLOADS

AUTOMATE PROCESSES

OPTIMIZE DELIVERY

CloudBurst

+SONAS

+IBM

Service Delivery Manager


+SVC

• VMcontrol• Storage Control• Network Control• Active Energy Management

• Tivoli Management Framework• Tivoli NetView• HP OpenView• Microsoft SMS• Microsoft Operations Manager• CA Unicenter NSM• BMC Patrol

Firmware updates(eg BIOS, UEFI)



EURONICS Deutschland eG (Germany) Extending virtualization into the storage infrastructure

14

The combination of the XIV Storage System and SAN Volume Controller gives us a smarter way to manage our storage. If we need to add a new application, whether in the AIX or VMware environment, we can provision the storage quickly and easily without worrying about the technical side of things. That’s really the ‘wow factor’ for us in this solution.

Uli MüllerIT Director, EURONICS Deutschland eG

Benefits:Able to manage entire storage environment with two IT staffBusiness continuity: SVC stretched cluster enables rapid, automatic and seamless failover to a different node SAN architecture simplification

Solution:IBM Power 570, XIV IBM System Storage SAN Volume Controller

Europe’s largest buying group for consumer electronics

• 29 European countries

• 6,400 independent electrical retailers

• More than 11,000 stores

Objectives• End-to-end virtualized IT platform for SAP• Increase high availability & ease-of-use for

storage systems • Use automatic load-balancing • Zero-disruption maintenance.

CUSTOMER VIDEO @ http://www.youtube.com/watch?v=si3gQtubVM0

”

“



Bryant University (US) Gaining new levels of visibility, control, automation

15

Business need:

• Reduce the University’s carbon footprint

• Support future energy compliance opportunities, including smart grids and carbon emission reporting

The maturity of our converged campus network and IBM’s energy management solution are the mediating technology that allow our IT and facilities teams to work together monitoring energy consumption and reducing operational costs.

Art GlosterVice President & CIO Bryant University

”“

Benefits:15% reduction in data center energy consumption21% reduction in OPEX; 26% in CAPEX30% time savings in operational overhead, with 15% improvement in service delivery

Solution:IBM BladeCenter H & EIBM Systems Director AEMIBM Tivoli Monitoring for Energy Management

• Green education beyond the classroom: IT and facilities teams partnership

• Consolidated 4 server rooms to one data center in 2007

• Developed baseline of power consumption

CUSTOMER VIDEO @ http://www.youtube.com/watch?v=H0N8p-VC3D8



16

Business need:

• Seize greater market share

• Reduce time to market for new products & services

• Address high cost of floor space & power

China Telecom Jiangxi BranchReducing complexity and operational costs with private cloud computing

Benefits:Time to market for new business applications reduced from 3-4 months to 2-3 daysImproved hardware utilization and cut hardware costs by over 50 %Cut energy consumption and CO2 emissions

Solution:IBM PowerVM™IBM Systems Director VMControl™IBM System Storage® SVC

China Telecom:

• 74M mobile subscribers

• 77% mobile revenue growth (1H 2010/ yty)

• 58M broadband subscribers

• 180M access lines

Our primary estimate is that the IBM solution has improved hardware utilization by over 50 percent, although this may in fact be higher. Sharing resources through the internal cloud has allowed us to consolidate hardware, translating into 50 percent cost savings in terms of CPU and storage.

Mr. Xu QiSupervisor of IT, Design & Support Center

JX CT, China Telecom

”“

CUSTOMER STORY @ http://www-01.ibm.com/software/success/cssdb.nsf/CS/STRD-8B9KWQ?OpenDocument&Site=default&cty=en_us



© Copyright IBM Corporation 2011. All rights reserved.U.S. Government Users Restricted Rights - Use, duplication or disclosure restricted by GSA ADP Schedule Contract with IBM Corp.

THE INFORMATION CONTAINED IN THIS PRESENTATION IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY. WHILE EFFORTS WERE MADE TO VERIFY THE COMPLETENESS AND ACCURACY OF THE INFORMATION CONTAINED IN THIS PRESENTATION, IT IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED. IN ADDITION, THIS INFORMATION IS BASED ON IBM’S CURRENT PRODUCT PLANS AND STRATEGY, WHICH ARE SUBJECT TO CHANGE BY IBM WITHOUT NOTICE. IBM SHALL NOT BE RESPONSIBLE FOR ANY DAMAGES ARISING OUT OF THE USE OF, OR OTHERWISE RELATED TO, THIS PRESENTATION OR ANY OTHER DOCUMENTATION. NOTHING CONTAINED IN THIS PRESENTATION IS INTENDED TO, NOR SHALL HAVE THE EFFECT OF, CREATING ANY WARRANTIES OR REPRESENTATIONS FROM IBM (OR ITS SUPPLIERS OR LICENSORS), OR ALTERING THE TERMS AND CONDITIONS OF ANY AGREEMENT OR LICENSE GOVERNING THE USE OF IBM PRODUCTS AND/OR SOFTWARE.

The following terms are trademarks of International Business Machines Corporation in the United States, other countries, or both:IBM, IBM Logo, on demand business logo, Enterprise Storage Server, xSeries, BladeCenter, eServer, ServeRAID andFlashCopy, System Storage, Tivoli, Easy TierThe following are trademarks or registered trademarks of other companies.Intel is a trademark of the Intel Corporation in the United States and other countries.Java and all Java-related trademarks and logos are trademarks or registered trademarks of Sun Microsystems, Inc., in the United States and other countries.Lotus, Notes, and Domino are trademarks or registered trademarks of Lotus Development Corporation.Linux is a registered trademark of Linus Torvalds.Microsoft, Windows and Windows NT are registered trademarks of Microsoft Corporation.SET and Secure Electronic Transaction are trademarks owned by SET Secure Electronic Transaction LLC.UNIX is a registered trademark of The Open Group in the United States and other countries.Storwize is a trademark of Storwize Inc., an IBM company, and used under license by IBM.

* All other products may be trademarks or registered trademarks of their respective companies.



Types of virtualized workloads

0

50

100

150

J F M A M J J A S O N D J F M A M J J A S O N D

Util

izat

ion

19

020406080

100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Util

izat

ion

PermanentMission critical workloads with foreseeable and steady growth

TemporaryCyclical utilization bursts (eg end of month or year)

UtilityUnpredictable short utilization bursts and require additional resources at a moment’s notice

0

50

100

150

J F M A M J J A S O N D J F M A M J J A S O N D

Util

izat

ion



Virtualization of consolidated resources can deliver cost savings

SERVER VIRTUALIZATIONUp to 30-70% TCO savings

Up to 33-50% floor space and facility costs33-70% hardware costs

Up to 50% maintenance costsUp to 33% support costs

STORAGE VIRTUALIZATIONUp to 25% less capacity needed

Up to $50,000 power savings per 1,000TBs of installed storageUp to 60% migration costs savingsUp to 300% increase in utilization

NETWORK VIRTUALIZATIONUp to 67% savings on space

Up to 18% CAPEX, 43% savings on powerUp to 35% savings on OPEX

50% fewer adaptersUp to 75% less cable clutter with virtual NICs

DESKTOP VIRTUALIZATIONUp to 40% overall TCO savings

Up to 45% power savingsUp to 90% deskside support

Up to 50% on helpdeskUp to 75% in security and user administration



Manage Workloads – Servers improves virtualized server management

+ 78% more Virtual Machines on eX5 for the same

license cost

Estimated costs based on IBM internal studies. Configurations are based on IBM internal studies. Prices are in US currency, prices will vary by countryVMware vSphere Enterprise Plus pricing @ $3,500 / processorTypical virtualized workloads are memory constrained before processors are fully utilized

IBM System x3690 X5

2 processors @ $7K32 DIMMs for 281 VMs

Current Environment

2 processors @ $7K16 DIMMs for 158 VMs

- 34% reduction in server management cost

+

10:1 (or greater) server

consolidation



Automate Processes – Servers intelligent virtualized workloads

- 97% reduced Time to clone

SAP database

- 67% less time to clone SAP

system

+RESTful

+- 98%

reduced time to add additional SAP application

server

+



Optimize Delivery – Servers IBM CloudBurst – the ultimate, “turn key” cloud solution

2000+ Virtual Machines

- 30% Provisioning costs

Additional details @ http://www-304.ibm.com/shop/americas/content/home/store_IBMPublicUSA/en_US/ibmcloudburst.html

+ - 30% Systems

Administration costs

CloudBurst



Estimated costs based on IBM internal studies. Storage configurations are based on IBM internal studies. The total cost of acquisition includes the cost of buying the hardware, three years of maintenance on the hardware, the cost of licensing the software and three years of annual charges on the software.

Current Environment

97TB HDD + SSD 4 DS4700 systems3 tape systems

$1.72M TCA (3 years)

IBM Storwize V7000 with Integrated SAN Volume Controller (SVC)

$1.18M TCA (3 years)

54.6TB HDD + SSD 2 Storwize V7000 systems1 tape system + 54.6TB backup - 32%

reduction in Total Cost of Acquisition

- 38% reduction in labor hours required to

manage

29:1 reduction of storage administration points +

SVC

Manage Workloads – Storage improves virtualized storage management

Storage Control



Automate Processes – Storage improves productivity and virtualized storage environments

+ 30% improved storage

utilization

2X administrator productivity,

with automated provisioning & unified

management

- 30% cost of creating storage pools

Productivity Center Automation

+IBM Storage

SAN Volume Controller

130+ storage systems from various vendors

supported

20+ various operating systems

supported

SVC



Consolidate Resources reduce server, network and storage complexity

+IBM zEnterprise

196

IBM zEnterprise BladeCenter Extension

+ 40% performance over

previous generation

10X improvement for

complex queries using workload optimizers

- 62% systems management

costs

IBM zEnterprise Unified Resource Manager +



Optimize Delivery – Storage IBM SONAS – the ultimate, storage cloud solution

7 X more storage scalability

- XX% <insert quantifiable proof point here>

- XX% <insert quantifiable proof point here>

Storage Manager

+

7,200 HDD

14.4 PB

GPFSSONAS



28

The NYSE highlighted their new x3850 X5 8-socket on stage at the SIFMA Technology Expo this week in NYC. NYSE showcased a number of market-critical financial applications running on the x3850 X5 8-socket system.“…check out this impressive piece of machinery running all the software you need for a low-latency trading solution.” - Feargal O'Sullivan

Deferred development a new datacenter, based on savings found during their initial testing of the x3850 X5 system. They realized a 35:1 consolidation reduction and 4x faster database processing. They expect to save 17k sq/ft of raised floor space and nearly 2/MW in power savings.“The IBM System x3850 X5 is a game changer. Our testing in the lab has shown 5x performance improvements running 64 virtual machines on a single x3850 X5 with 32 cores in only 4 sockets.” - David Guzman, Senior Vice President, Acxiom

General Dynamics is deploying x3850 X5 systems for a virtual desktop deployment for one of their U.S. Department of Defense customers. This will reduce costs, as well as provide greater functionality and reliability for the deployment of desktops within the Pentagon.

Click on image to go to NYSE Blog

Clients are embracing eX5 and maximizing value for their business.

http://exchanges.nyse.com/archives/2010/06/64core_goodness_live.php

http://www-01.ibm.com/software/success/cssdb.nsf/CS/DLAS-89WRGU?OpenDocument&Site=default&cty=en_us

Virtualizing @ LV 1871Alexander TriebsInfrastructure Project Manager, LV 1871

30

Medium Sized Business

Mutual insurer 8500 independent insurance brokers

Specialist for Life, Annuities &Disability Income Benefit (IncomeProtection)

Who is LV 1871 ?

31

514

486

446

415

315295

27575.07874.763

72.636

68.39967.618

65.018

62.387

2001 = 100

2002 2003 2004 2005 2006 2007

LV 1871Gesamtmarktin Mio. €

+ 20,3%

+ 87,1%seit 2001+ 5,6%

+ 9,2%

+ 7,4%

+ 32,0%

+ 6,7%+ 7,3%+ 0,4%+ 2,9%

+ 6,2%

+ 1,2%

2)

+ 4,0%+ 4,2%

Gross written premiums

LV 1871 Business Results

32

Insurance brokers‘ favourite

33

Requirements of Business Processes

98% of business processes are built on IT-processes

• Fast• Reliable• Flexible• Robust• Cost Effective• Efficient

34IBM Pulse 2011, Alexander Triebs, 03/1/2011

Requirements of IT-Infrastructure

• Fast• Reliable• Flexible• Robust• Cost Effective• Efficient

Surprised?

35

Former Platforms of LV 1871

IBM Host(classic inventory management system)

Solaris(SAP-FI,CO,...)

Windows (unit linked inventory management system)

Print Service Provider

EMC Storage System

(Symmetrix/Centera)

Windows (Backoffice)

IT-Systems

36IBM Pulse 2011, Alexander Triebs, 03/1/2011

The Seven-Year-IT-Strategy (Began in 2004)

• Migration of host system to AIX• Strategic system for actuarial inventory management is System p

(AIX)• Reduction of outsourcing• Reduction of IT cost ratio (important element of acquisition)

Many consolidation projects

37

What was the starting point in 2004?

Windows Server AIX Server(Power 4)

Data Center 01Data Center 02

Windows Server

EMC DMX

SCSI AttachedStorage

EMC Centera

Tape Libraries

Linux Server

AIX Server(Power 2/3)

SCSI AttachedStorage

Syst em St orage

JukeboxSyst em St orage

Veritas TSM

38

ESX Farm(Windows/Linux)

SVC (storage virtualization)

AIX Farm(Power 5)

Data Center 01Data Center 02

ESX Farm(Windows/Linux)

Backup

Backup

DS8100 DS4800

DR550

S y st e m St o ra g e

Library

AIX Farm(Power 7)

Step 2(Power 7)

Step 3

Synchronous Mirror

Step 1

DS5000

Where did the journey take us?

39

IBM Systems

8 System x (160 VMs: DMS, SQL-Server, Backoffice, DMZ)Model: x3650 M312 Intel Xeon 6C Processor Model X5680 3.33GHz/1333MHz/12MB72GB PC3-10600 CL9 ECC DDR3 1333MHz2 x 8Gb FC Single-port HBA6 Dual Port Ethernet

2 System p (4 VIOs, 11 AIX: SAP, Notes, Inventory Management, BO)Model: 9117-MMB p77016 Power 7 @ 3.1 GHz256GB DDR3 1066 MHz4 x 8Gb FC Dual-Port HBA4 Dual Port Ethernet

40

Advantages of IBM Systems

External Effectiveness = Customer satisfactionImproved performanceStability

Internal Efficiency = Money SavedFlexibility (changes need minutes, not weeks)Reduced cost (less storage space wasted and tiered storage)($ 20/GB Tier 1,$ 8/GB Tier 3, Capacity Ratio Tier 1/Tier 3=1:3)Vendor independence (price model change,upgrading)

41

Lessons Learned

SystemsImproved performanceStability and reliability

Costs move from Servers to StorageCreate AND delete VMsThink about deduplication on backup

SAN and LAN will become the essential backbones of virtualization100 % AvailabilityThink about redundant and splited fabrics and VLANs

SecurityDMZ and LAN are separated on different hardware

43

© Copyright IBM Corporation 2011. All rights reserved.U.S. Government Users Restricted Rights - Use, duplication or disclosure restricted by GSA ADP Schedule Contract with IBM Corp.

THE INFORMATION CONTAINED IN THIS PRESENTATION IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY. WHILE EFFORTS WERE MADE TO VERIFY THE COMPLETENESS AND ACCURACY OF THE INFORMATION CONTAINED IN THIS PRESENTATION, IT IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED. IN ADDITION, THIS INFORMATION IS BASED ON IBM’S CURRENT PRODUCT PLANS AND STRATEGY, WHICH ARE SUBJECT TO CHANGE BY IBM WITHOUT NOTICE. IBM SHALL NOT BE RESPONSIBLE FOR ANY DAMAGES ARISING OUT OF THE USE OF, OR OTHERWISE RELATED TO, THIS PRESENTATION OR ANY OTHER DOCUMENTATION. NOTHING CONTAINED IN THIS PRESENTATION IS INTENDED TO, NOR SHALL HAVE THE EFFECT OF, CREATING ANY WARRANTIES OR REPRESENTATIONS FROM IBM (OR ITS SUPPLIERS OR LICENSORS), OR ALTERING THE TERMS AND CONDITIONS OF ANY AGREEMENT OR LICENSE GOVERNING THE USE OF IBM PRODUCTS AND/OR SOFTWARE.

The following terms are trademarks of International Business Machines Corporation in the United States, other countries, or both:IBM, IBM Logo, on demand business logo, Enterprise Storage Server, xSeries, BladeCenter, eServer, ServeRAID andFlashCopy, System Storage, Tivoli, Easy TierThe following are trademarks or registered trademarks of other companies.Intel is a trademark of the Intel Corporation in the United States and other countries.Java and all Java-related trademarks and logos are trademarks or registered trademarks of Sun Microsystems, Inc., in the United States and other countries.Lotus, Notes, and Domino are trademarks or registered trademarks of Lotus Development Corporation.Linux is a registered trademark of Linus Torvalds.Microsoft, Windows and Windows NT are registered trademarks of Microsoft Corporation.SET and Secure Electronic Transaction are trademarks owned by SET Secure Electronic Transaction LLC.UNIX is a registered trademark of The Open Group in the United States and other countries.Storwize is a trademark of Storwize Inc., an IBM company, and used under license by IBM.

virtualization: changing the economics of it

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