The Truth Behind
the IBM
Great Server Heist

ConsultingTimes Does the Math

by Stephen E. Harris, Publisher, ConsultingTimes

This 60 second spot is a work of pure, evil genius, with more subliminal messages than a can of Pringles. But ... is it true? I mean, you don't simply call up and put a zSeries mainframe on your credit card, and there still are licensing, maintenance, and who knows what other costs. Did the techie really save a bundle by dumping the servers?

To answer this all-important question, ConsultingTimes spoke to Jimmy Lee, Director of Professional Services for Equant, a global network service provider which runs the world's largest IP data communication network. (We'll have more on Equant in a subsequent article.) Equant was among the first organizations to implement Linux on the S/390 and z-Series mainframes, and migrate its customers to open standards, so Jimmy is one person who could fill in the Big Blue ad with real world numbers.

The numbers Jimmy provided blew us away.

Before we do the numbers, just what is Linux for S/390? As Jimmy explains:

• It is the deployment of Linux on the mainframe
• It exploits the power of the S/390 and zSeries 900 hardware
• It runs in both 32 bit or 64 bit modes of operation
• 99% of the code is pure Linux
• 1% of the code is IBM modification for platform support
• It runs natively or co-exists with other S/390 operating systems
• It substantially increases the S/390 application portfolio

Last but not least, mainframe Linux is IBM’s long term strategy and commitment. The fact that IBM needed only 72,000 lines of code to implement the strategy, compared to millions of lines in the original operating system, is testimony to the robustness of both the Linux kernel and the mainframe systems architecture.

Now the numbers. Jimmy put together a Total Cost of Ownership (TCO) case study, that compares PC vs. mainframe solutions for a moderately sized enterprise with 5,000 seats. The products in question were Microsoft Exchange Servers under Windows and a comparable groupware solution under Linux. For the sake of simplicity, certain items such as depreciation and management overhead were excluded from the comparisons.

The configuration for Microsoft Exchange entailed:

• Dual Intel 900 Mhz PCs, with 512 Mb memory and 18 Gb storage
• 500 mailboxes per server
• 5,000 mailboxes, requiring 11 servers in all (10 operational, 1 failover)
• 10 Mb per mailbox (10 Mb X 500 mailboxes = 5 Gb)
• Communications racks and networking gear
• 104 sq. feet of data center floor space
• $0.85 per day per server of electricity (350 watts @10 cents per kwh)
• Support 7x24 (four technical support personnel)

Jimmy went out of his way to be fair to the Exchange/PC solution, since the industry average is 350 mailboxes per server, and the single support person per shift must be literate in PCs, networks, Cisco, Windows NT, and Microsoft Exchange.

The three-year TCO profile for the Exchange/Intel solution, based on actual Equant invoices, came to:

Divide the TCO by 5,000 users and 36 months, and the Microsoft Exchange solution comes out at $8.65 per user per month. A reasonable sum? Perhaps.

Next, Jimmy went to IBM, without telling them that he was doing a study, and said, "give me a proposal." He asked for all the hidden costs up front: maintenance, support, tape drives, storage ... everything. Here are the resulting figures for the mainframe groupware solution:

• IBM G6 Linux Only Package with external disk 9672-X27 (8 Gig memory, 104 Escon channels, 2 OSA’s) z/VM 4.1
• Enterprise Storage Server (ESS) with 840 Gig of disk 
• Three years S/390 hardware and software support
• 5,000 mailboxes on one virtual server
• 10 meg per mailbox (10 Meg X 5000 mailboxes = 50 Gig)
• Communications rack and networking gear
• 400 square feet of data center floor space
• $32 per day of electricity (13.4kw @ 10 cents per kwh)
• Support 7X24 (one VM programmer and three operators)

The three-year TCO for this dedicated mainframe server comes to:

Divide the TCO by 5,000 users and 36 months, and the mainframe groupware solution comes out to $16.73 per user per month -- almost double the cost of the PC solution!

Conclusion: the IBM ad is a fraud!

Or is it? The first thing we should note is that the mainframe in our example contains vastly more horsepower than is required for 5,000 users. The machine Jimmy "ordered" had enough storage to serve 50,000 users and he maxed out costs such as electrical power on the first 5,000 users. Now watch how the costs scale up as you add licenses to serve multiples of 5,000 users:

Note how the systems ramp up in an entirely different manner. The PC-based solution requires that you keep adding hardware in step with the number of users, filling up that data center shown in the commercial. The mainframe solution requires only minor changes to that refrigerator-sized box. The crossover point in terms of costs is around 25,000 mailboxes in our example. By the time you reach 50,000 seats, the TCO per user per month is $3.02 for Microsoft Exchange vs. $1.85 for the Linux groupware.

In all fairness to the mainframe, you can run 5,000 mailboxes on a much smaller, and cheaper, piece of IBM hardware than the one in our example. 

So now the ad producers are (somewhat) redeemed, though a little prone to hyperbole.

End of story? Far from it!

Ever hear of the IFL? It stands for Integrated Facilities for Linux, and you'll be hearing a lot more of this little acronym in the months ahead. The IFL is an optional facility, dedicated exclusively to Linux, available on IBM's G5, G6 and zSeries servers. It runs on the same hardware as the existing mainframe applications, on the other side of a virtual barrier -- sort of a "free" world within the existing proprietary machine. This means that you can run Linux applications to your heart's delight, without incurring a dime's worth of software charges for OS/390, VM, VSE or TPF operating systems/applications.

Now lets do the math for 5,000 mailboxes, comparing the Exchange/Intel solution with the Linux groupware/IFL one:

Now look what happens to the costs. The Exchange/Intel solution, again, is $ 8.65 per user per month. The Linux groupware solution now comes out to a mere $ 2.02 (compared to the original estimate of $16.73). Pretty compelling math! The IFL solution can be fully justified wherever you have comparable PC vs. mainframe applications. Simply substitute your software costs for the "E-mail licenses" above, and voilà!

So any shop with existing IBM mainframes should look for solutions that can be moved to Linux, and then sit down and do the math. Even if you transfer some of those fixed hardware and support costs over to the IFL, your total savings are the same.

Perhaps the techie in the IBM ad was motivated by the idealism of open source, and the flexibility of open standards, or maybe he was simply looking for a robust, scalable solution. In any case, it's more than likely that he did "save us a bundle".