The Frugal Networker

By a show of hands, how many of you need to know, or want to know, the total cost of ownership (TCO) of your technology investments? Fine. Now, how many of you need to calculate the return on your technology investments (ROI)? Chances are very good that if you raised your hand at either or both of those questions, you’re a company manager, a C-level executive, a project manager, or a marketing representative. You have a vested interest in knowing the numbers behind a technology investment. No one has enough power to make capital purchases without answering to someone for them.

Sure, there are some intangible returns reaped from using the best available technology but subjective value is difficult to put on a graph. It’s even more difficult to explain to shareholders. Perhaps the best way to gain an understanding of ROI, TCO, and value is to use a disinterested third party to give you an unemotional, objective assessment.

IBM understands the value of doing just that. That’s precisely why IBM has enlisted the services of Alinean, Inc. Alinean, Inc. (Alinean) is a company that develops “economic justification tools” for business-to-business (B2B) vendors. Alinean developed the IBM PureFlex System TCO Analysis Tool to compare the total cost of ownership for the IBM PureFlex System versus a traditional dedicated or virtualized IT infrastructure.

To use the IBM PureFlex System TCO Analysis Tool, you’ll need some assistance from your technical team leads. There are questions that refer to server groups, hypervisor type, databases, application servers, storage tiers, and virtual machine configurations that you’ll have to know to complete the Requirements section (tab).

Based on the information you provide in the Requirements section, the tool calculates the IBM PureFlex Systems equivalent hardware and software requirements and the total cost associated with the transition*.

The final page of the report compares your current solution to the IBM PureFlex equivalent. Given in the analysis are costs from capital outlay such as hardware, software, licensing, and storage. There’s a section outlining estimated operating costs from support contracts, support labor, and facilities. There are also sections that calculate employee productivity and revenue impacts.

The TCO Analysis page also summarizes your initial investment expenses, your five-year expenses, your total five-year benefits, your total ROI, and estimated payback time in months. The calculator also provides you with a graphical representation of the costs associated with your current solution versus the equivalent IBM PureFlex one. Finally, the report presents you with a graphical Break Even Analysis displaying your costs vs. benefits over a five year period.

As with any such automated analysis, there are factors that are specific to your circumstances that might alter your actual numbers and outcomes. This calculator provides you with a reasonable estimate based on your answers to the questions but can’t evaluate every scenario.

I challenge you to dedicate a few hours of research into your current solution and invest fifteen minutes into the TCO/ROI Tool to make the comparison. This PureFlex System comparison could save you a significant amount of money–a move that makes everyone happy–from managers to shareholders to customers. Take the IBM PureFlex Systems TCO challenge and post your savings numbers here as proof of the possibilities of moving to a PureFlex environment.

*As noted on the IBM PureFlex System Configuration page, the cost of training is not included in the price, since this number will vary depending on several factors.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.