Premise

The rapid cadence of business innovation requires IT to minimize the time to value on new projects.  The premise of this research is that converged infrastructure is an imperative for projects where compressed implementation timescales are required to keep pace with business initiatives.  This Wikibon research illustrates how the careful combination of technology disruptions can facilitate time to value and ease of maintaining that value once deployed.

The Impact of Converged Infrastructure in the benefits of a case study based on previous research are shown in Figure 1 below.

Figure 1: Executive Summary: Impact of Converged Infrastructure on Financial Metrics of a 5-step All-flash Strategy Project
Source: © Wikibon 2015

Case Study: Impact of Converged Infrastructure on 5-step All-flash Strategy Project

In a recent study, Wikibon researched the value of an all-flash strategy using a shared-data implementation. The objective of this study is to illustrate the additional value that can be delivered by deploying an all-flash shared-data implementation project with the addition of using converged infrastructure.  Table 1 below includes the assumptions of the original research with the modifications of deploying it with converged infrastructure.

Table 1: Wikibon Standard Company: Financial Analysis of 5-Step All-flash Datacenter Strategy deployed on Converged Infrastructure
Source: © Wikibon 2015

The assumptions that changed between our original research on an All-Flash Data Center without converged infrastructure (which can be found in the Table 1 in the Research entitled “Driving Business Value for Oracle Environments with an All-flash Strategy“) and Table 1 above including converged infrastructure (shown in red) are:

  1. The time to implement the Flash and Processor Strategy was reduced from 6 months to 3 months.
  2. The time to implement the application development strategy was reduced from 10 months to 5 months.
  3. The time to implement the operation re-organization was reduced from 10 months to 5 months.
  4. The Budget savings from operations was increased from $1 million to $ 3 million. The additional programmer productivity was increased from 2 x to 2.5 x (because of the time to implement any required infrastructure changes was reduced by about 50%.)

These assumptions are based on a number of converged infrastructure research projects conducted by Wikibon, including”Duplicating Public Cloud Economics for Oracle Database Infrastructure“, “The Business Value of Converged Infrastructure Topologies“,  “Converged Infrastructure Takes the Market by Storm“, and others.

Financial Analysis of Case Study

Figure 2 below shows the financial impact of converged infrastructure on the All-flash project as a whole. The impact of converged infrastructure is faster time to value, increased productivity of application development due to the reduced time for infrastructure resources, and the reduction in operational costs for the deployment, maintaining and updating of the infrastructure.

The impact of converged infrastructure on cost and business value on an All-flash solution alone is significant:

  1. Total Benefits increased by $22.4 million, from 59$ million to $81.0 million
  2. Net Present Value (NPV) increased by $21.0 million from $53 million to $74.2 million
  3. Internal Rate of Return (IRR) increased by 175% from 254% to 429%
  4. Annual Return of Investment (Annual ROI) increased by 750% from 528% to 1278%
  5. Breakeven decreased by 5 months from 9 months to 4 months.
Figure 2: Impact of Converged Infrastructure on Cash Flow and Financial Metrics for a 5-step All-flash Strategy ProjectSource: © Wikibon 2015
Figure 2: Impact of Converged Infrastructure on Cash Flow and Financial Metrics for a 5-step All-flash Strategy Project
Source: © Wikibon 2015

An important additional benefit of converged infrastructure on all All-flash strategy is the reduction of complexity and number of people required to manage infrastructure (servers, storage and networking), and the reduction of friction in moving towards a Dev/Ops model.  Our conclusions were confirmed in our research of converged solutions for this project with senior IT executives who typically remarked along the lines of “It just removes infrastructure as a thing to worry about” and “Of course [we have a converged infrastructure strategy], is there any other viable strategy today?”

Conclusions & Recommendations

IT is under severe business pressure to deliver faster time to value.  This Wikibon research shows clearly that using converged infrastructure in a dynamic environment has a strong multiplier effect on project value, far greater than the impact on the IT budget. In the case study above, the total benefits were $22.4 million, of which only about $5 million were from IT savings.  Wikibon recommends that a converged infrastructure strategy is essential, especially in a responding to fast-moving projects from lines of business.

Action item

Wikibon strongly recommends IT implement a converged infrastructure strategy, and use it to accelerate application development. Wikibon strongly recommends that it be used to accelerate a move to a Dev/Ops driven organization. Wikibon recommends that solutions like EMC’s VCE be included on any RFP.