Smarter Computing with System z

®

Steve MillsSenior VP and Group ExecutiveIBM Software and Systems

March 23, 2011

Smarter Computingwith IBM System z

2© 2011 International Business Machines Corporation

Smarter Computing: System z Analyst Summit

Smarter Planet Solutions Increase Demands on IT

but IT budgets are growing less than 0.8% per year

1.2 zettabytes (1.2 trillion GB)exist in the “digital universe

50% YTY growth25% of data is unique; 75% is a copy

Data centers have doubledtheir energy use in the past five years

Internet connected devices growing 42% per year

85% idle computer capacity15% of servers run 24/7 without being actively used on a daily basis

Between 2000 and 2010 …servers grew 6xstorage grew 69x

Virtual machines growing42% per year

18% increase in data center energy costs projected

32.6M servers worldwide



IT Operating Costs are Out of Control

Worldwide IT Spending on Servers, Power, Cooling and Management Administration

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$0

$50

$100

$150

$200

$250

Source: IDC

35

0

5

10

15

20

25

30

40

45

50

SpendingUS$ (B)

Power and cooling costsServer mgmt and admin costsNew Server spending

Physical Server Installed Base

(Millions)



Resulting Sprawl Drives Unsustainable Costs

Cost to Manage Growth of Inventory Consumes

IT Budget



Strategies to Reduce Costs and Improve Value

ApplAppl ApplAppl

Consolidate Hardware Infrastructure

Eliminate Redundant Software and Data

Improve Service Delivery

Optimize the Overall IT Environment

CompressDeduplicateIntegrateArchive

ApplAppl ApplAppl ApplAppl ApplApplSOA

Cloud Computing

Integrated Service Management

Visibility AutomationControl



Meeting These Challenges

Smarter Computing

Leading clients are already addressing this IT conundrum through:

Strategies to transform IT to deliver breakthrough economics and valueStrategies to transform IT to deliver breakthrough economics and value



IBM Internal IT Infrastructure Evolution

Sprawl Consolidated

VV

VV

VV

VV Private Cloud

Public Cloud

Integration

Smarter Computing

Service Pooling

VV

VVVV

VVVV

ServicesServices

IT Simplification

Comprehensive virtualizationEnsembles and scalable serversConverged networks

Service Oriented ArchitectureEnd-to-end service managementCloud computing services

Key Technologies



IBM IT Transformation = Cost Savings

Consolidated and virtualized over 3,900 server images onto 30 System z mainframes

80% less energy used

85% less floor space …a 16,500 sq. ft. reduction

Cumulative benefit yield of $ 4.1B over the last 5 yrs

1997 TodayHost Data Centers 155 7

Web Hosting Centers

80 5

Network 31 1Applications 15,000 4,700



Optimize Server Utilization

Reduce Server Sprawl

Reduce # of Data CentersConsolidate ServersServer VirtualizationAsset Management

Manage Workloads

Workload Optimized Systems – Best Fit

Automate Processes

Automation ProvisioningWorkload Scheduling

Optimize Service Delivery

Integrated Service Management (ISM)

Self-provisioned Cloud Services

zEnterpriseHybrid workload

consolidation

Delivers the lowest cost per workload for the widest variety of

workloads

Example of IBM Solution



zEnterprise

Centralized management of heterogeneous resources for simplification and resiliencyUnifies management of resources, extending IBM System z qualities of service end-to-end across workloads

The Next generation of mainframe technology, more performance, more scale, more efficientOptimized to host large scale database, transaction, and mission critical applications

Integrated IBM POWER7 blades and IBM x86 BladesHigh performance optimizers and appliances to accelerate time to insight and reduce cost

IBM zEnterprise 196 (z196)IBM zEnterprise 196 (z196) zEnterprise Unified Resource ManagerzEnterprise Unified Resource Manager

zEnterprise BladeCenter Extension (zBX)

zEnterprise BladeCenter Extension (zBX)



IBM zEnterprise Provides a New Dimension in Cloud Computing

Rapid ElasticityA new dimension of Scale. Most efficient platform for Large-scale Linux consolidation

Broad Network AccessVery large number of end user access from multiple sources including mobile devices

On Demand Self-ServiceAutomate provisioning and service requests reducing provisioning cycles from weeks to minutes

Unified management for a smarter system:IBM zEnterprise

Unified Resource Manager (zManager)

The world’s fastest and most scalable system:

IBM zEnterprise™ 196 (z196)

Scale out to a trillion instructions per second:

IBM zEnterprise BladeCenter®

Extension (zBX)

Measured ServiceMeter, monitor, and track workloads for chargebacks and capacity expectations

Resource Pooling1000s of virtualized systems across a heterogeneous resource pool



Syst

em z

Har

dwar

e M

anag

emen

t Con

sole

(HM

C)

with

Uni

fied

Res

ourc

e M

anag

er

zBX

Select IBM Blades

Blade HW Resources

Optimizers

IBM

Sm

art A

naly

tics

Opt

imiz

er

z HW Resources

z/OS

z/TPFz/VSETM

Linux onSystem z

Support Element

Linuxon

System z

z/VM

Private High Speed Data Network IEDNPrivate Management Network INMNUnified Resource

Manager

Private data network (IEDN)

1 All statements regarding IBM future direction and intent are subject to change or withdrawal without notice, and represents goals and objectives only.

Customer Network Customer Network

System z Host

Linux on System x 1

AIX on POWER7

Dat

aPow

er1

Futu

re O

fferin

g

Futu

re O

fferin

g

Blade Virtualization Blade Virtualization

System z PR/SM™

A Look Inside the zEnterprise System



IBM zEnterprise Lowering TCO of Distributed Workloads Through Optimal Platform Selection

Optimize distributed work on zEnterprise with Linux on System z, POWER7 blades and Intel blades with Unified Resource Manager

Current data center:

Distributed workloads on a variety of Intel servers, connected to a System z

• Based on IBM analysis of a large Financial Services company Datacenter. See details on ibm.com/systems/zenterprise/• Deployment configurations based on IBM studies and will vary based on workload characteristics. Price calculations based on publicly available US list prices, prices will vary by country.

Lower cost of acquisition by up to 56%*

Reduce cost of ownership by up to 55%*



The Cost of Duplicating a 2TB Database

EnterpriseWAN

Duplicated Data

$2,826System z CPU cost ETL$1.38/GB x 2048 GB

$9System z ETL Labor$9.33/job

$1,188System z CPU cost FTP $0.58/GB x 2048 GB

$12,042System z Storage Admin$5.88/GB/yr x 2048 GB

$6System z FTP Labor$5.88/job

$25,252Cost of storage for send file$12.33/GB x 2048 GB

$53,207Distributed Storage Admin$12.99/GB/yr x 2048 GB x 2 copies

$14Distributed ETL Labor$14.00/job

$96Distributed CPU cost FTP $0.05/GB x 2048 GB

$799Distributed CPU cost ETL$0.39/GB x 2048 GB

$61,112Cost of storage for receive file and data mart$14.92/GB x 2048 GB x 2 copies

$1,188Off Premises Network$0.29/GB x 2048 GB x 2 hops

$20On Premises Network $0.0024/GB x 2048 GB x 4 hops

Annual Additional Infrastructure Costs

$151,613

Cost per Transfer

$6,146

2TB 2TB



Annual Costs of Duplicating 3 Data Marts Off Platform

Original Data Duplicated Data

Duplicate once per day

Cost of Duplication(3 marts, once per day, 1 year)

$12,042Storage admin z

$1,406,085Off premise network

$3,969,331CPU cost ETL z and Dist

$550,011Additional Dist Storage

$1,322,213On premise network

$159,621Storage admin Dist

$1,046,378Labor ETL

$263,725Labor FTP

$8,754,659TOTAL

$25,252Additional z Storage

$37,294TOTAL

Original System z Storage Costs (1 year)

$12,042Storage administration

$25,252Cost of original storage

EnterpriseWAN

2TB

2TB

2TB2TB



Deploy on Intel Best Fit on z Enterprise25 heavy workloads

240 heavy I/O Workloads

235 light workloads

664 total network parts$0.2M TCA

Additional network parts16

switches340

cables308

adapters

21 total network parts$0.03M TCA

Additional network parts1

switch10

cables10

adapters

Network configuration is based on IBM internal studies. Prices are in US currency, prices will vary by country

zEnterprise Reduces Network Cost and Complexity



SAP Applications Cost 20% Less on zEnterprise

z196zBX

z196T3-1B

Upgrade to new

SPARC T3

$1.2M3yr TCA HW+SW

POWER Blades in

zBX

$0.97M3yr TCA HW+SW

20% Less20% Less20

SPARC T544032 core servers

538,120 total SAPs

640 cores total

$3.4M

z196

38 SPARC T3-1B Blades in SUN Rack608 cores total

23 POWER7 Blades in zBX

184 cores total

20 front-end SAP applications on older SPARC T2+ servers

20 Workloads20 Workloads



Running Web Front End Workloads Cost 58% Less

z196zBX

POWER Blades in

zBX

$4.9M3yr TCA HW+SW

58% Less58% Less

z196 WebSphere Application Server

28 POWER7 Blades2 DataPower X150z

in zBX224 cores total

Competitive Application Server57 SPARC T3-1B

Blades in SUN Racks2 HP DL380 Servers

(for ESB)936 cores total

z196T3-1B

Upgrade to new

SPARC T3

$11.7M3yr TCA HW+SW

28SPARC T5440

32 core servers2 HP DL380 Servers

(for ESB)

$23.7M

DL380

28 Workloads each driving

1,975 tps

28 Workloads each driving

1,975 tps

28 front-end applications on older SPARC T2+ servers



Linux on z196 is the Most Efficient Platform for Large-scale Consolidation

Lower acquisition costs of hardware and software vs. distributedservers – 74% less than Nehalem*Less than $335 per year per virtual server (TCA)*Reduce floor space by up to 90% compared to distributed servers*Reduce labor costs by up to 70% compared to distributed servers

Distributed server comparison is based on IBM cost modeling of Linux on zEnterprise vs. alternative distributed servers. Given there are multiple factors in this analysis such as utilization rates, application type, local pricing, etc., savings may vary by user.

*

Consolidate 40 Oracle server cores onto 2 Linux cores on zEnterprise Consolidation on System z

$0.0

$0.5

$1.0

$1.5

$2.0

New X86 z10 z196

US$

Mill

ions

Hardware MaintenanceHardwareSoftware Service & Support Software OTC

39% less than Nehalem

74% less thanNehalem



zEnterpriseBroadest Architectural Support for Private Clouds

Linux on System x Blades*

AIX on Power Blades

Appliance Blades

Linux on System z

z/OS

z/OSz/OS z/VMz/VM AIXAIX

WorkloadWorkload WorkloadWorkload WorkloadWorkload WorkloadWorkload WorkloadWorkload

LinuxLinux

zEnterprise z196 zEnterprise BladeCenter Extension (xBX)

Fit-for-Purpose Strategy

Achieves overall lowest cost per

workload

Integrated Service Management

Assign workloads to the environment that best satisfies requirements

VisibilityControlAutomation

Linux Image



Public versus Private CloudWhich Option Costs Less for Delivering Mixed Workloads?

Public Cloud

Private Cloud

400 Workloads

400 Workloads

408 Workloads

408 Workloads

42 Workloads

42 Workloads

Light workloads with heavy I/O

Light Intel workloads

Heavy Unix workloads

850 workloadszEnterprise



Compare Server Cost of Acquisition

400 Workloads

400 Workloads

408 Workloads

408 Workloads

42 Workloads

42 Workloads

Public Cloud

Private Cloud

Deployed on Public Cloud Best Fit on zEnterprise

zEnterprise32 IFL’s,

7 Intel Blades, 13 POWER Blades192 cores

$7.5M TCA (3years)

850 Compute Instances

$48.5M TCA (3years)

Server configurations are based on consolidation ratios derived from IBM internal studies. Prices are in US currency, prices will vary by country

84% Less84% Less



Public Cloud

Compare Labor Cost for Three Years

400 Workloads

400 Workloads

408 Workloads

408 Workloads

42 Workloads

42 Workloads

Private Cloud

Deployed on Public Cloud Best Fit on zEnterprise

18,115 labor hours / year8.71 administrators

$4.17M3 years@ $160K per year

18% Less18% Less

11,806 labor hours / year5.67 administrators

$3.44M*3 years@ $160K per year

Configuration based on IBM internal studies. Labor model based on customer provided data from IBM studies. Labor rates will vary by country*Includes acquisition costs for zManager and Tivoli



Fit-for-Purpose Private Cloud on zEnterpriseDramatic Reduction in Costs

Three Year Cost per Workload / Image

(US$)

Light Intel Workloads

$44.6K

$9.2K

Heavy UNIX Workloads

$242K

$72.4K

Workloads with Heavy I/O

$79.4K

$15.3K

Public cloud

Private cloud with zEnterprise

Source: IBM internal study. zEnterprise configurations needed to support the three workload types were derived from IBM benchmarks. Public cloud sizing needed to support the three workload types was calculated based on compute capacity of public cloud services. 3 yr TCO for public cloud calculated using web-based calculator made available by the service provider. 3 yr TCO for zEnterprise includes hardware acquisition, maintenance, software acquisition, S&S and labor. US pricing, prices will vary by country.

79% lower overall TCO79% lower overall TCO



Accurate Cost Allocations Show a True Picture of Costs and Aid Investment Decisions - an example:

Typical Allocation –Management Estimates

Best Practice Allocation –Actual Costs

Distributed % Mainframe % Distributed % Mainframe %Power Cost 0 0 $15,084 100 $11,917 79 $3,167 21

Labor Cost 0 0 $350,000 100 $210,000 60 $140,000 40

Floor space 0 0 $11,620 100 $6,300 54 $5,320 46

Software OTC depreciation $120,240 60 $102,472 40 $216,194 97 $6518 3

Software S&S and MLC $168,783 50 $168,783 50 $181,242 54 $156,325 46

Hardware OTC depreciation $103,691 25 $311,074 75 $184,435 44 $230,330 56

Hardware Maintenance $20,276 25 $60,829 75 $37,151 46 $43,953 54

Network 0 0 $4,758 100 $ 4,758 100 $0 0

Total $412,990 29 $1,024,620 71 $851,997 60 $585,613 40

Best practice allocation should use actual distributed and mainframe costsIn this example, the mainframe allocation decreased from 71% to 40%

Total $1,437,610 Total $1,437,610Based on IBM analysis of customer data. Individual customer results will vary.



Consolidated 140 HP Intel-architecture servers to a single IBM System z with six Integrated Facility for Linux (IFL) engines

Key applications run in SUSE Linux Enterprise servers, while IBM DB2 databases run on z/OS on the same physical machine

Lead time for server provisioning reduced by 99%

New Linux Virtual Servers deployed for test and development within 20 minutes

BlueCross BlueShield of Minnesota

“Even without factoring in the maintenance and support costs - which would be considerable for a large estate of physical servers - we found that running a virtualized Linux environment on System z would be somewhere between 30 and 50 percent less expensive than a distributed architecture.”

- Ted Mansk, IT Director, BCBSM



By consolidating workloads onto its System z mainframes’virtualized infrastructure, Nationwide replaced hundreds of stand-alone servers running several different operating systems

$ 15M cost savingsover three years

85% – 90% server utilization

80% reduction in environmental costs

Nationwide Insurance



Consolidated 200 Sun servers down to 1 IBM System z10 running Red Hat Enterprise Linux

Reduced data center footprint by 30%, heat output by 33%, and power consumption by close to 40%

Only one administrator needed per 200 virtual servers

New environments are deployed in minutes, not days

Bank of New Zealand



When Baldor acquired a major competitor, it needed to integrate hundreds of servers into its existing infrastructure

Baldor consolidated to SAP Business Suite applications, hosted on 70 virtual machines running Linux on an IBM z10 EC server and migrated data to an IBM System Storage DS8100 platform

Eliminated hundreds of servers

Cut energy costs by 60%

Cut IT costs by 50%

Baldor Electric Company



Smarter Computing …..

Use of hardware and software technologies to increase operational efficiencies and

optimize workload performance while reducing Total Cost of Ownership

Doing More for LessDoing More for Less

Education

Smarter Computing with System z