JDE EnterpriseOne Costs Less on i OS Than Windows or Linux, ITG Says

Updated: December 11, 2010

by Alex Woodie

Companies can save millions of dollars while protecting themselves from application downtime by installing and running the Oracle EnterpriseOne ERP application on IBM i OS-based Power Systems servers instead of commodity X64 servers running either Windows and SQL Server or Linux and the Oracle database, according to a report issued this summer by International Technology Group, and posted to the IBM i Web site.

In its June 2009 status report, titled Value Proposition for IBM Power Servers and i: Comparing Costs for EnterpriseOne Deployments, ITG tallies up how much it would cost to configure and run EnterpriseOne on each of the platforms at four hypothetical manufacturers and distributors. In each of the scenarios, the Power Systems setup turned out to be significantly less expensive across nearly all units of measurement, while the Oracle/Linux combination on X64 iron turned out to be the most expensive.

The ITG report on EnterpriseOne mirrored the findings of a similar ITG study of SAP ERP implementations that IBM put out earlier this year. You can access the new report (in PDF format) at this link.

ITG's exercise involved sizing the appropriate hardware, software, and personnel for four companies, including a $250 million industrial distributor with 350 total employees and 250 application users; a $750 million food and beverage manufacturer with 2,000 employees and 500 users; a $600 million electronics manufacturer with 3,500 employees and 750 users; and a $1.2 billion paper products manufacturer with 4,000 employees and 1,000 users.

The analyst group took into account a variety of costs, including hardware and maintenance coverage; license and support for operating systems, databases, management tools and other software; personnel for system and database administration; and facilities and energy overhead. These costs were based on real-world data from 14 companies, which ITG extrapolated to its hypothetical environments for the purpose of its hypothetical study.

The report found that the average of the four i OS-based setups was $520,000 per year, over a three year period. That was $267,000 per year less, or 34 percent lower, than the combination of Dell servers running Windows Server and SQL Server operating system and database components, and $537,000 per year less, or 51 percent, than the same EnterpriseOne setup running on Dell servers equipped with the Linux OS and the Oracle database, ITG found.

The cost of personnel was by far the biggest factor contributing to a Power Systems victory, which should come as no surprise to IT pros that are familiar with the platform. However, the lack of X64 virtualization in ITG's hypothetical setups may have contributed to the higher level on hands-on management needed for the Windows and Oracle/Linux environments.

According to ITG's report, the smallest EnterpriseOne configuration required a staffing level of just 0.45 full time equivalent (FTE) employee for Power Systems, compared to 1 FTE for both the Windows and Linux/Oracle setups. In the largest configuration, only 1 FTE was required to manage the i OS environment for a $1.2 billion manufacturer, whereas the Windows environment required 2.75 FTEs, and the Linux/Oracle setup required nearly 3 FTEs.

While ITG factored in the costs of VMware hypervisors for the X64 development and test environments, it required separate Dell servers for each of the production components, including application servers, database servers, and related components. "Experience has shown," ITG says, "that use of VMware and equivalents results in unacceptable performance degradation for production systems." That is not entirely true, as many companies use virtualization in production systems. While IBM still may posses a lead with its logical partitions, managed by the PowerVM hypervisor, that lead is diminishing. ITG could have done a better job reflecting that in this study.

ITG also didn't account for hidden personnel and software costs that may impact Power Systems shops. There is really no disputing that i OS environments require less care and feeding. However, the notion of the "pure AS/400" shop has become an anachronism, and, for better or for worse, the vast majority of AS/400 shops are also big Windows users. Integrating applications running on i OS, Windows, and other platforms can require specialized skills and software products that aren't directly obvious from the 30,000-foot level.

One major cost center that nobody will dispute (except maybe Larry Ellison) is the high cost of Oracle software and Oracle DBAs. ITG points out that while IBM and Microsoft include most of the management tools needed to maintain a DB2 for i or SQL Server database with the cost of a license, most Oracle shops will need to buy additional managements tools, or Oracle Enterprise Edition, which is costly.

And Oracle DBAs, with an average salary of more than $93,000, are notoriously expensive. The typical Power Systems environment does not employ a DBA, relying instead on jack-of-all-trades administrators, who earn an average of about $87,000 per year on the Power Systems platform, according to ITG. SQL Server admins cost about $86,000 per year, while Linux and Windows admins each earn around $73,000 to $74,000. For each FTE, ITG increased the cost by 50 percent to account for real world costs, such as benefits, training, and taxes.

The Power Systems EnterpriseOne setup handily beat the X64 environments in the "cost of downtime" category, which is another hidden cost that will not affect everybody the same way. According to ITG, the cost of downtime affecting Power Systems companies averaged 81 percent less than for Windows servers, and 85 percent less than for Linux/Oracle environments.

That System i reliability advantage translates into some serious monetary savings, according to ITG. Over a three-year period, it equates to $2 million for the small distributor, $3.5 to $4.5 million for the electronics manufacturer, $5.5 million to $7.5 million for the food and beverage manufacturer, and about $7.75 million to $10 million for the big paper products manufacturer.

While there may be some nits and picks with the ITG study, the results largely fit with the real-world experience reported by hundreds of AS/400 shops over the years. Whether it convinces any company to move from X64 gear to the Power Systems platform remains to be seen. But it certainly helps to reiterate the idea that Power Systems shops made a sound decision in choosing their platform for EnterpriseOne.

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