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IDC: Users find big benefits to server consolidation

A new IDC report says that users can realize ROI within a year when consolidating their Wintel servers onto an iSeries box.

IBM's been preaching for years now that consolidating servers can save you money.

As it turns out, Big Blue was right, at least according to a new report from Framingham, Mass.-based International Data Corp. (IDC).

After interviewing several iSeries customers, researchers at IDC found that small and medium-sized businesses can achieve significant cost savings by consolidating workloads onto the iSeries from industry-standard Intel servers that were running Microsoft Windows and Linux workloads.

The report, which was sponsored by IBM, notes that savings also came from reducing system administration head count and avoiding operational costs associated with server downtime.

According to Craig Johnson, product marketing manger for Linux iSeries, customers most likely to consolidate servers are small and medium-sized businesses using Windows and Linux technology in addition to iSeries servers. They're using integrated Windows solutions, he said; they're not getting rid of Windows.

"With IBM's integrated Windows servers, they're still running Windows, but getting rid of a box," he said.

Brendan Carlton, a system administrator with De Soto, Kan.-based packaging company Huhtamaki Americas, could be IBM's poster boy for its consolidation platform. Carlton said his department at Huhtamaki Americas, which is one of the companies IDC describes in its report, has quickly recouped its initial outlay of cash to consolidate. But the real cost savings has come in being able to do more with less manpower.

"The real benefit to us is in the man-hours," Carlton said. "We've saved at least two full-time personnel. We had lost one person that we didn't need to replace, and there was a time when we could have added an additional person, but we didn't have to."

Carlton consolidated approximately 40 Windows servers using iSeries' Integrated xSeries Adapter card, which linked to free-standing IBM xSeries systems. Huhtamaki Americas estimates it reduced IT-related costs by some $350,000 per year.

The companies described in the IDC report were able to forgo the purchase of, on average, five Intel-based servers for each iSeries that was deployed, reducing their staffing, maintenance and training expenses. In fact, according to the study, an investment in the iSeries had an average payback period of just under nine months.

Companies participating in the study reduced their costs by an average of more than $180,000 annually, the report said.

According to Jean S. Bozman, a research vice president at IDC and one of the authors of the report, the iSeries is generally viewed as being a more expensive server to buy, compared with Wintel servers. But, she said, the study found that even when you factor in the acquisition costs of the iSeries, companies that consolidated onto an iSeries were not only able to recoup their costs within a year but were able to cut costs significantly in the long term.

"Consolidating onto an iSeries really showed a significant, ongoing benefit to the companies that we studied -- and their bottom line," Bozman said.

Shops consider up-front costs

But consolidating isn't cheap. Depending on the size of the shop, consolidating servers can cost more than $140,000, said Craig Johnson, product marketing manger for Linux iSeries.

And while iSeries users pretty much agree that the benefits of consolidation are great, many can't justify the up-front costs. In fact, in an exclusive poll, 32% of respondents said they were all for consolidating but found it cost-prohibitive.

Still, Johnson said that this report proves that customers are able to see the benefits of their investments within a year. "Yes, these customers needed to spend the money to consolidate, but the return on investment is realized pretty quickly," he said.

Carlton said that, because his company leased its AS/400 and iSeries servers, his company didn't have to make much of an investment. While there were naturally some costs, he said, they were able to take money they were already applying to one lease and reapply it to another.

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