Identifying and Reducing IT Transition Costs
Mark TellezManager, Business Development Servers
Advanced Micro Devices
9th September, 2003
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Enterprise Spending Patterns Are Shifting …
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01
IT
Hardware
Profits
With less money to spend, corporations are taking a much more disciplined look at how and how much to spend on IT.
Global Corporate Profits and IT Spending Growth
Source: IDC, “After Iraq: IT Spending 2004-2007” 1Q03
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… As Are Enterprise Priorities
Purchase Criteria:
Financial metrics such as TCO are displacing product performance metrics.
0% 5% 10% 15% 20% 25% 30%
Scalability
Performance
Ability toIntegrate
Total Cost ofOwnership
Reliability
2003
2002
Source: Evans Data; “Luxury models face cost-conscious buyers”; CNET News.com May 13, 2003
Survey of Database Customers
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What Is Going On?
Past Future Focus
Automation Replacement IT Strategy
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What Is Going On?
Past Future Focus
Automation Replacement
Return Investment ROI
IT Strategy IT Strategy
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What Is Going On?
Past Future
Automation Replacement
Return Investment
System Transition Cost
ROI
IT Strategy IT Strategy
Focus
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Many Of Today’s Transition Costs Are Unnecessary
Does upgrading to the next generation of technology require you to…
… hire on additional staff or consultants?
… upgrade additional components?
… retrain the user base?
… retool software?
… throw away existing infrastructure?
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Disruption costs are unnecessary transition penalties in the form of costs and/or time to either IT staff or end-users
Unnecessary Transition Costs = Disruption Costs
These excessive transition penalties we call disruption costs demand more attention in today’s IT environment.
Does upgrading to the next generation of technology require you to…
… hire on additional staff or consultants?… upgrade additional components?… retrain the user base?… retool software?… throw away existing infrastructure?
Does upgrading to the next generation of technology require you to…
… hire on additional staff or consultants?
… upgrade additional components?
… retrain the user base?
… retool software?
… throw away existing infrastructure?
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Origins of Disruption Costs
Technology for technology’s sakeRace for fastest and best, ie: Moore’s law
Vendor–centric innovationSecure and control
Lack of competitionAllows inefficiencies to continue
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Understanding the “Migration Penalty”
• Significant investment:
– New Hardware, Software certification, training, services
– New instruction set requires steep learning curve
– Optimization can require intimate compiler knowledge
• Legacy applications must either migrate or perform poorly in emulation mode
• Downtime during migration
• Cost to rewrite and implement new administration policies
• “Y2K revisited” – research shows that the average migration project involves 100,000 lines of code, a four- to six-month time frame, and costs $821,000 for little perceived benefit.
(Aberdeen Group – “Strategically Attacking Software Sclerosis” An Executive White Paper February 2001)
Who pays for all of this? … one way or another YOU DO !!!
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Effects of Disruption Costs
Higher Disruption Costs…
Result in lower…
- Service levels
- Productivity
- IT job satisfaction
- Discretionary budget
-More expensive software
-More expensive hardware
-More expensive services
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Start measuring “disruption costs”
Implications for IT decision-makers
Ask for guarantees
Engage consultants for customization, not base level integration
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Implications for IT vendors
Future success in the IT industry will go to those companies that focus on lowering disruption costs.
Start with customer needs
1.
Drive innovation within standards2.
Collaborate with partnersOS, SW, motherboard manufacturers, system builders, OEMS, etc.
3.
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x86 32-bit – Content Delivery Servers
Proprietary UNIX 64-bit Large Business-Critical
Databases
Mainframe
x86 32-bit –Messaging Server
Proprietary UNIX 64-bit Server – Compute Farm
x86 32-bit File/Print Serversx86-64
32-bit File/Print ServersHandle more users
x86-64 64-bit Transaction
ServersReduce wait time
Mainframe
x86-64 64-bit Databases
ServersDeliver data faster
x86-6432-bit Content Delivery
Servers Reduce wait time
x86-6432-bit Messaging
ServerHandle more users
x86-64 64-bit Compute Farm Calculate data faster
Example: x86-based 64-bit Architecture
AMD64 has the potential to provide a single platform for the complex needs of the data center – reducing the costs by as much as 25 %. (Giga Information Group– Total Economic Impact Study, 2003
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X86 based 64bit technology: A Low Disruption Cost Future
One Enterprise, One Platform
By lowering disruption costs with an x86-based 64-bit architecture, we envision a day when a single processor platform will efficiently fulfill the needs of an enterprise IT architecture.
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x86-based 64-bit technology in action
88 Systems
6 Systems
256 Systems490 Systems 35 Systems
1058 Systems20 Systems
20 Systems
256 Systems
1400 Systems
10,136 Systems
24 Systems
152 Systems
20 Systems
1250 Systems
>500 Systems
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AMD, the AMD Arrow logo, AMD Opteron, and combinations thereof are trademarks of Advanced Micro Devices, Inc. Other product and company names used in this presentation are for identification purposes only and may be trademarks of their respective companies.
Trademark Attribution