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ROI CASE STUDY
zPrime™—Reduce Overall Mainframe Costs
HIGHLIGHTS:
Goal: Reduce overall mainframe costs
Industry: Retail |
2-Year ROI: 398%
2-Year Benefit: $3.3 million
Break-Even Point: 150 days
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Business Challenge
A North American retail company with over 2,000 stores wants to lower their mainframe costs to better align their mainframe budget with the mainframe’s value to the business. Their focus is on high mainframe costs. They are concerned about high software licensing costs for both IBM and ISV software. They are also concerned about the high costs of periodic capacity upgrades.
Mainframe Environment
This typically sized mainframe shop has two IBM System z9 mainframes with 14 central processors and four zIIP specialty processors for an installed capacity of 958 MSUs on CPs and about 210 MSUs on their zIIPs. They have enough installed specialty processors to handle 22% of their normal workload. Their normal business applications include CICS and DB2 and their normal workload mix includes batch jobs and online transaction applications.
Their workloads have been increasing at an an annual average growth rate of 7%. This growth rate means that a capacity upgrade will be needed within the first half of this next year with another upgrade forecast one year later.
Financial Benefits
An initial ROI analysis for this organization shows that they have ample specialty processor capacity to handle about a quarter of their normal business workload. If just 20% of their workload could be shifted, the company would see savings from lowered software license costs plus savings from two cancelled capacity upgrades.
A planned capacity upgrade event at this company costs almost $1.5 million (a bit over $1 million for hardware and a bit under $500K for add-on costs, such as increased capacity charges on licensed software). Cancelling two of these capacity upgrade events saves the company more than $3 million.
Cancelled upgrades represent the largest share of projected savings for this company, but the savings from lowered monthly software costs are also significant. By enabling at least 20% of the normal business application workload to run on low-cost zIIP specialty processors, the company expects monthly software costs to drop by more than $20,000 adding up to savings of an additional $1 million over the next 2 years.
Summary
NEON zPrime can deliver cost savings for this organization by helping it avoid two capacity upgrades normally needed to support normal business growth, and by lowering monthly software costs. With zPrime, they expect to save almost $3.3 million over the next two years and achieve an ROI of 398% on their zPrime investment.
Beyond the initial 2-year period of this ROI scenario, the the company could purchase several more zIIP and zAAP processors, enabling them to continue avoiding capacity upgrades for 4 or more years.
About This Case Study
NEON Enterprise Software uses a sophisticated ROI model that can accurately forecast zPrime project costs and savings. NEON analysts have worked with more than 100 companies to prepare detailed projections based on accurate site-specific data.
 Request an ROI consultation.
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