The Business Value of Engineered Systems
If I had to formulate in one sentence what my job and that of my teammates is, I'd say something like:
"To show our customers the business value of Oracle's Engineered Systems"
Because at the end of the day, customers pay real money only if there's some real value they see in a solution.
And that is the problem most people in IT struggle with: How is what you do in IT related to your company's total value chain?
Most of the time, people, both those working in IT and those selling and supporting into IT departments are consumed with functions and features, tech specs, standards and other tech stuff. Worse yet: Some people look at Oracle's Engineered Systems like Exadata and Exalogic and they only see a bunch of servers in a rack, because all they know is components, servers, tech stuff.
This is dangerous terrain: Because if you can't show the business value of your IT to your company, you're going to be put on the list of cost centers to be squeezed, and budget cuts are never a good motivator for your job.
So what is the value of IT to the business? Or more specifically, what is the value of Engineered Systems for our customers' businesses?
Two Kinds of Value
Essentially, there are two kinds of business values to look for when considering Engineered Systems: Saving money and making more money.
Saving money is what most people look for in IT departments. That is a historic, almost Pavlowian reaction to the question of business value, because IT budgets have been reduced for so many times due to dot com, economic or other crises.
The truth is that hardware and software are only a small fraction of total IT budget (somewhere in the 25% range depending on who you ask), while the bulk of IT spending is in implementing IT and operating it. The good news is that Engineered Systems are exactly all about helping you cut costs at exactly these biggest two factors of IT spending: Implementation and Operation.
However, IT budgets are limited and being able to save N% of them is even more limited. Therefore, the next category is much more interesting:
The other source of creating business value out of Engineered Systems is by making more money. By leveraging the breakthrough performance and other innovations of Engineered Systems, new things become possible that enable new business possibilities or provide a competitive edge that others simply don't have. Business opportunities are only limited by your market size, so this is a much more fruitful way of looking at the business value of your Engineered System.
Save money with Engineered Systems
Let's get the easy part out of the way first. Oracle's Engineered Systems are the ultimate standardized IT building block. Everything is integrated into a single system: Storage, servers, networking, virtualization, OS, database, middleware, applications. One building block, one point of management, one vendor, one throat to choke, one vision (insert song here).
This results in a number of cost savings opportunities, with varying amounts of potential depending on how your particular IT shop is set up:
- Time to market savings: Since everything is pre-engineered, pre-tested, pre-assembled, and delivered in one go, there's a lot of project time to be saved with an Engineered System. No more testing, validation, evaluation, integration or other painful work to be done. How much is it worth to you if you could complete your IT project 3 months earlier?
- TCO savings: We see a lot of consolidation projects where customers consolidate databases onto Exadata or SuperCluster and middleware and apps onto Exalogic or SuperCluster. Here's your laundry list of savings opportunities that this approach creates:
- Power, cooling, space: Put together all of your existing database/middleware servers, then calculate their total power consumption. Multiply by a factor of 2 for cooling and HVAC, then add any costs related to space that you pay inside your datacenter. Now compare with the equivalent database/middleware power sitting in Exadata, Exalogic and/or SuperCluster. This is where raw performance of Engineered Systems translate into savings for you: More database/middleware power with less machinery, every month, every year.
- Less cores means less licenses: The other good news of consolidation is that if you use more powerful hardware, you'll end up using less cores for what you have to do. This directly translates into license cost savings, which can be as high or higher than any cost you save on pure hardware.
- Less stuff to save: By using Oracle's Advanced Compression option in the database, or (in a more data warehouse related setting) Exadata's Hybrid Columnar Compression or the ZFS Storage Appliance's Compression/Deduplication features, you can save a lot of Terabytes in raw disk space. And every Terabyte saved on the database side means one extra Terabyte saved on the backup side, and one Terabyte less to recover in a DR scenario!
- Less stuff to administer: Count the number of administrators devoted to keeping your lights on in the datacenter. Subtract two. Multiply by 100k per year. That's the cost you'll save as a result of only needing two administrators to keep your hardware and OS running on Exadata, Exalogic or SuperCluster. Because everything on the infrastructure side is fully automated using Oracle Enterprise Manager Ops Center and Oracle Enterprise Manager Grid Control.
Why two administrators? So one can go on vacation.
Before you cry out something about killing IT jobs, let me remind you that it's no real fun to be the guy who's just sitting there, trying to keep stuff running between multiple vendors, endless hardware swaps, firmware incompatibilities, or installing an OS for the umpteenth time. You've always felt that this is just grunt-work that should be automated because you're meant to do something more interesting. Now it is! Go and learn about how you can leverage Infiniband for faster backups to a ZFS Storage Appliance, how Hybrid Columnar Compression can help your data warehouse environment or how you can introduce automation at a higher level into your datacenter.
- Less stuff to test/QA/patch: Even Exadata, Exalogic, SuperCluster and other Engineered Systems have to be patched and upgraded from time to time. The good news is that there's only one patch to apply to the whole system, and it has been already tested, quality-assured and certified for you. This means: Less work, less people and less time to test, QA and certify patches. Because this time, you don't need to check whether the database patch works with the OS, whether the OS patch works with the FC driver, whether the SAP patch works with the database and so on. Even SAP bundle patches now come together with the Exadata patch for single patch bliss. Again, this approach not only saves you time and headaches and personell, it also reduces the risk that results out of having to qualify many components from multiple vendors together.
- Less risk: Never underestimate the monetary effect of having less risk. A colleague of mine knows about a partner who deployed an Oracle database stack on a standard Red Hat Linux machine on some standard hardware. There was a case of driver/OS/database patch mismatch that brought them down for a long time and later on they calculated that this incident cost them more than 40k Euros. Just because some storage driver didn't work with the OS and the database very well. This is exactly the stuff that is taken out of the equation at the engineering level, so the machine leaves the factory without this kind of problem. I'm not saying here that Engineered Systems are perfect, 'cause nothing is. But a huge chunk of potential failures has already been eliminated before your machine hits production. And that is sometimes, as some credit card company likes to say: Priceless.
- Remove Bottlenecks: Many times, the value of Engineered Systems at our clients revolves around fixing bottlenecks in their IT. Such bottlenecks can quickly become business bottlenecks and that is never fun to deal with. Case in point: Huge telco company, recently merged with another one. Overloaded the call center. Batch jobs that were designed to run overnight couldn't complete. And as a result, call center operators didn't have any upsell opportunities prepared for their customers (= Less inceremental business) and customers started to cancel contracts due to declining service quality. Ouch. In this case, all that was needed was an Exadata environment for the data warehouse that reduced the database size by a factor of 8x and that accelerated the batch run tremendously so that all the bottlenecks could be removed. Now the call centers can work again much more efficiently and customer satisfaction plus new business due to upselling goes up.
Make Money Fast with Engineered Systems!
(sorry for the "fast" part, I just couldn't resist...)
On to the more interesting aspects of Engineered Systems: How to help your business make more money!
Oracle likes to highlight the breakthrough performance of Engineered Systems in our advertising. Just visit any airport and you'll see what I mean. For tech people, this is indeed impressive: 10x faster here, 20x faster there, and so on.
But how does a statement like "10x" faster translate into more business? The key is in finding things that were impossible before, but that you can now do as a result of using Engineered Systems:
- Data Warehousing: In a typical data warehouse, batch runs often take a long time. By using Exadata, you can often shrink batch run times by an order of magnitude. How would your business decision process change, if you got your analysis daily, instead of weekly?
- Business Intelligence: The new Exalytics In-Memory Machine comes with one Terabyte of RAM and it supports Hybrid Columnar Compression. This means you can now analyze Multi-Terabyte datasets in seconds that used to take days to analyze before. How would that kind of BI power change your day to day business decisions?
- High Frequency Trading: Oracle Coherence is an in-memory, distributed Java database that is designed to scale across many nodes for very large, in-memory datasets. It's quite popular in the Financial trading scene because there, you try to analyze the risk of an investment in real-time so you can reach trading decisions very quickly. Like, milliseconds-quickly. In fact, each millisecond you can shave off of your risk analysis can be worth millions of Euros/Dollars/Yens as it enables you to reach an investment decision a bit earlier than your competition. Thanks to the Infiniband interconnect in Oracle Exalogic, that extra millisecond (or more) is now easier to get!
- Moving into a Cloud Model: Cloud Computing is all about massive standardization, self-service and metering/billing. Engineered Systems are solving the standardization part, self-service, metering and billing are solved through Oracle's Middleware and management solutions. Now, you can turn your infrastructure into a Database-as-a-Service (DBaaS), PaaS and SaaS environment. Why is this not just consolidation but a new business generator? Because for the first time in IT history (actually, the second, if you count the mainframe), you can show the value of your IT services to your departments in Dollars and Pennies! And through self-service APIs, you can enable your departments to reduce their time to market, try out new stuff faster and generate better business models. This creates a nice upward spiral: The next time your company celebrates a business success, you'll be able to show exactly how your IT contributed to it, and how more IT helped close that business faster, better and with less risk. That will help you justify a bigger IT budget and so on.
- New Business Insights and Opportunities through Big Data: Like I said in this article, Big Data is coming! The combination of Oracle's Big Data products like the Big Data Appliance, Exadata, Exalytics and a suite of useful software on top will enable you to make sense out of social media mentions, mobile sensor networks, real-time sales data and other very large sources of information with gold nuggets waiting for you to discover.
Now these are just a few examples of how Engineered Systems can help create new business opportunities or optimize existing ones. The rest is up to you, because you know better what your company is doing: What would you like to do from a business perspective, if you had enough IT power at your disposal?
Bonus: Fun Big Data Movies to Watch!
I guess we earned ourselves a fun video to watch now, right? Oracle has recently produced a series of advertising videos around big data that I think are quite good. Here's the first one:
See how our heroes' BigData story unfolds, including unusual renditions of their new "Big Data" colleague in this Oracle Big Data Video Playlist with 4 more videos waiting for you!
Your Business Experience with Engineered Systems
How have Engineered Systems helped you either save money, or create new business?
What is your biggest pain point in IT where more capacity or performance would help?
What is the biggest opportunity your business is facing that you would like to grab if you just had enough IT power?
Leave a comment below and share your experience!