Increasingly, IT executives are turning their attention to the total cost of ownership (TCO) of both their existing infrastructure and future investments. Originally conceived by Gartner Group in the mid 1990s, TCO is a calculation designed to help IT managers assess the costs and benefits, both direct

and indirect, related to the purchase of any IT component. The goal is to determine a final figure that reflects the real cost of a purchase, all things considered.

While TCO is typically associated with desktop computers, it can be used to determine the total cost of any aspect of a business’s IT infrastructure, including networks and enterprise servers. IT decision makers need to understand the TCO of these purchases prior to deciding to replace outdated equipment with new hardware or agreeing to support new applications.

The purpose of this paper is to 1) examine the different types of costs that contribute to TCO for servers, 2) compare the TCO of the HP Integrity Superdome line of servers with that of comparable IBM and Sun products, and 3) illustrate how the HP Integrity Superdome is the logical choice from a total cost of ownership perspective.

Purchase price versus cost of ownership

Given the current economic environment, budgets and headcounts are shrinking–and IT departments need to find innovative ways to do more with less. For these reasons, IT executives are turning their attention to the total cost of ownership (TCO) of both their existing infrastructure and future investments. Originally conceived by Gartner Group in the mid 1990s, TCO is a calculation designed to help IT managers assess the costs and benefits, both direct and indirect, related to the purchase of any IT component. The goal is to determine a final figure that reflects the real cost of a purchase, all things considered. TCO can then be weighed against to the total benefits of ownership (TBO) in order to determine the viability of a purchase.

For an IT executive with a tight or shrinking budget, knowing the total cost of a new IT investment is critical for strategic planning. The fact is, owning hardware and software costs a great deal more than the purchase price.

While TCO is typically associated with desktop computers, it can be used to determine the total cost of any aspect of a business’s IT infrastructure, including networks and enterprise servers. IT decision makers need to understand the TCO of these purchases prior to deciding to replace outdated equipment with new hardware, or agreeing to support new applications.

The Superdome

The HP Integrity Superdome leverages the power of the new Intel Itanium processor, which was co-developed by HP and Intel. The revolutionary Intel Itanium Processor Family architecture reduces platform costs, enables higher performance and scalability, and offers the flexibility businesses need to build an adaptive enterprise. Itanium 2—based systems easily outpace the performance of IA-32 and classic RISC-based systems, and they provide more power, more applications, additional features, and a broader range of solutions than is possible with any other server on the market.

Key features of the HP Integrity Superdome include the following:

• Intel Itanium 2 processor power. With Intel Itanium 2 processor power, the new HP Integrity Superdome provides industry-leading performance for a high-end server.

• Simultaneous support for multiple operating systems. The HP Integrity Superdome is the industry’s only high-end server that can simultaneously run HP-UX in one partition, Microsoft Windows Server 2003 in another partition, and Linux in another partition–a capability that is especially useful for heterogeneous server consolidation.

• In-box upgrades for industry-leading investment protection. The HP Integrity Superdome is also the only high-end server that provides this unique, simultaneous multiple OS support capability via an in-box upgrade to an existing, installed server. The enhanced investment protection provided by the in-box upgrade capability enables users to easily move from the current PA-RISC—based HP 9000 Superdome to an Itanium-based HP Integrity Superdome.

• Exceptionally large memory. The HP Integrity Superdome offers 512 GB of memory capacity for running extremely large, enterprise-wide implementations (such as SAP) as well as high-performance technical computing applications that demand a large memory. This server also offers cell local memory for faster memory access and higher performance.

• New HP Super-scalable Chipset sx1000. The combination of an industry-standard Intel Itanium 2 processor with HP’s sx1000 chipset enables HP to offer higher performance and a lower cost of ownership. This HP sx1000 chipset is invented by HP and supports the next-generation Itanium 2 processor (code-named Madison) as well as the next-generation PA-RISC processor, the PA-8800. (By offering a common chipset in HP’s next generation of high-end and mid-range servers, HP enables customers to choose when to transition from PA-RISC to Itanium 2 processing, thus maintaining in-box upgradability and investment protection.)

• The lowest price/performance point. The HP Integrity Superdome offers the lowest price/performance point in the industry because CPUs and memory can be added almost instantly, allowing IT resources to be aligned with utilization requirements and business needs.

• High availability and scalability. The HP Integrity Superdome provides unprecedented single system availability with features such as error checking and correcting (ECC) on CPU cache, parity protection, redundant components, comprehensive diagnostics, electrical isolation, and clusters in-a-box.

In addition, the HP Integrity Superdome can be combined in clusters or metro-clusters for greater availability and disaster recovery capabilities. From a scalability standpoint, the server can scale to 64 processors with a simple addition of cell boards. As faster processors come along, the HP Integrity Superdome can take advantage of the latest technologies with simple in-box upgrades.

• Instant Capacity On Demand. The HP Integrity Superdome enables cell board iCOD (Instant Capacity On Demand), which adds memory iCOD to CPU iCOD so that memory can be made available instantaneously. (Note that availability of this functionality depends on the operating system being deployed.)

Components of total cost of ownership for servers

When comparing products, it is very easy to evaluate the “cost” of various products by simply looking at the price tags of the equipment. Direct costs associated with server purchases include the following:

• Hardware acquisition costs

• Software licensing costs

• Multi-year support

While this short list of direct costs provides buyers with a good idea of the upfront costs associated with a server purchase, it tells less than half the TCO story. Server-related studies indicate that indirect costs exceed the direct costs for a server over a three- to five-year period. Indirect costs are considered to be expenses that are related to the support of the server. These types of costs include the following:

• Staffing costs to maintain and support the server

• Facility costs, such as power, cooling, and floor space

• Application development and implementation costs

Adding up both direct and indirect costs over the life of a server provides a clearer view of the total cost of ownership–but not a complete view, because it does not take into consideration the cost of necessary upgrades. Over the life of a server, a manufacturer typically comes out with new features

on a yearly basis, and faster processors become available regularly. In order to take advantage of the added power and new functionalities, customers need to upgrade to the latest technology.

Upgrade costs may include the following:

• The costs of the upgrades (such as the cost of purchasing new processors)

• The opportunity costs of investing in the upgrade (what was forgone in order to invest in the upgrade)

• The costs of downtime during upgrades (while the server is down so that the upgrade can be implemented). Servers may or may not include any of a wide range of investment protection features that make upgrades less costly and easier to perform; these features can vary widely from product to product and should be carefully considered prior to purchasing a server. All too often, businesses overlook the importance of investment protection features–or they accompany each upgrade with a new total cost analysis, rather than making it a part of an ongoing analysis of a single investment. As a result, hundreds of thousands or even millions of dollars may not be factored into the original purchase decision.

As this discussion indicates, buyers who are evaluating server products need to compare all three aspects of TCO–direct costs, indirect costs, and upgrade costs–in order to understand the true total cost of ownership of a particular purchase.

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