Ways to Lower IT Costs

With the end of NEON’s zPrime, mainframe users lost an effective way to lower costs. And make no mistake about it; zPrime was effective in lowering costs. A data center manager in France told BottomlineIT that zPrime saved his company almost 1 billion Euros each year.

There was no magic to how zPrime achieved these savings. Mainframe software licensing costs and various other charges are reduced when the processing is handled by a special CPU that is treated differently when calculating licensing costs than if it was the general processor. The zPrime trick simply expanded the range of workloads that could be run on special processors far beyond what IBM approved. No surprise that IBM shut it down.

Every IT shop wants to reduce costs, especially these days. There are a number of ways to do so. Again, no magic. They involve reviving well known practices that many organizations have gotten away from in recent years.

Start by negotiating better software licensing deals. Many IT managers believe they already negotiate the best prices from software vendors. Repeated studies by Minneapolis-based ISAM, however, show that not to be the case.  When looking at the software tactics of best-in-class IT shops ISAM found considerable variation in software vendor pricing, and many shops simply don’t get the best deals.

When shopping for best software pricing, make sure to consider open source options too. Open source software, even with the various fees involved, costs less than conventional software licensing.

While you’re at it, check out the Software-as-a-Service (SaaS) options. Particularly for small and midsize organizations, SaaS may offer substantial savings over on-premise software licensing. The savings come from the economies of scale and from being a shared service.

Another option for reducing software costs is application performance management (APM). Where software is licensed based on the processor, anything that minimizes CPU consumption can save money. For these situations, APM revolves around proven best practices to minimize CPU resource consumption, especially during peak times. It involves both rescheduling when applications run and optimizing the code to run more efficiently.

“APM starts with profiling and understanding the way your applications use mainframe resources as they run—especially CPU. It helps determine whether they really need all the resources they are using and with this information you can then make focused tuning efforts in specific areas of software code within the applications and especially the database calls, which tend to use a lot of resources. It can reduce the CPU requirements to run your applications by an enormous percentage,” explains Philip Mann, a principal consultant at Macro 4, an APM consulting firm and tool provider.

Using the Macro 4 approach and tools, British retailer Tesco was able to reduce MIPS consumption 10-15% in one project, which allowed it to avoid purchasing extra CPU capacity. The Macro 4 tool enabled Tesco to identify opportunities where changes to databases, systems software, and applications could generate CPU savings.

Finally, organizations are trying to reduce IT costs through consolidation based on server virtualization. Some recent studies, however, suggest that many organizations are not getting the savings they expected from virtualization.  Although the potential for serious savings is still there it just may take a little more effort to realize them.

A recent survey by CA Technologies on the state of IT automation shows that 60% of managers at midsize and large enterprises are disappointed in virtualization’s ability to deliver savings. The survey quotes one respondent: “Virtualization is a bean counter’s dream, but it can be an operational nightmare.” The respondent, a senior IT manager, continued: “Change management is a huge overhead, as any changes need to be accepted by all applications and users sharing the same virtualization kit. While many organizations are seeing benefits from virtualization, such as reduced hardware spending and improved server utilization, these benefits often get overshadowed by the lack of productivity improvements in data center staffing and operations.”

The key to achieving virtualization savings is automation. The CA survey shows a direct correlation between IT service automation in a virtualized environment and cost-savings. For example, 44% of survey respondents who said most of their server provisioning processes are automated report they have significantly reduced costs through virtualization. Conversely, 48% of those who said the complexities of virtualization have introduced new costs also said, not surprisingly, most of their server provisioning processes still are manual.

OK, none of these techniques, except maybe the virtualization/automation combination, will likely save you $1 billion a year. But, when budgets are tight any savings will help.


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