The beginning of the new year is a great time to take stock and think about setting new goals and plans, and IT decision makers are no exception. Most, if not all, organizations probably will have “save costs” and “improve IT efficiency” as their top resolutions. And as space comes at a premium, many organizations will look at modernizing their data centers. Increasing density can deliver savings in space, power, cooling, build-out, and port costs.
Moore’s Law — the doubling of the number of transistors in a dense circuit every 18 months — has enabled the debut of highly modular, highly dense server architectures, such as the Dell PowerEdge FX2 server. It is providing early adopters with big savings on capacity costs as well as space savings and management efficiencies. But will your organization realize similar benefits?
To answer this question, Dell commissioned Forrester Consulting to conduct an independent Total Economic Impact™ to study and examine the potential return on investment your organization may achieve by replacing conventional rack servers with FX2 servers. Forrester’s subsequent analysis found that a composite organization experienced a 58 percent return on investment (ROI), including $6.3 million in cost savings, 50 percent space savings and a 15 percent acquisition cost savings.
It’s worth noting here that although Dell commissioned the Forrester study and provided a list of customers that have deployed the FX2 solution, Forrester conducted its investigation independently. Notably, we also reviewed and provided feedback to the study’s draft, “but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.”
Total Economic Impact Methodology – Dell FX2 Architecture
Forrester interviewed three customers and, based on these, constructed a composite company with these characteristics: 230 employees and $57 million in annual revenue from sales of advertising software based on big data analytics. The fast-growing organization—10 percent year-over-year—was using 1U rack servers in four colocation providers, three of them remote. It had three goals for investing in the Dell PowerEdge FX2 architecture:
- Support performance and growth cost-effectively, while minimizing its colocation footprint and lessen overprovisioning.
- Simplify infrastructure management, but help accelerate time-to-market, boost uptime and speed up support.
- Gain flexibility and agility to help drive anticipated growth in business volumes.
The composite organization retained its legacy servers, but added and standardized on the FX2 architecture. Each year for three years, it bought and deployed 300 Dell PowerEdge FC630 servers in 75 FX2 chassis, plus 150 Dell PowerEdge M I/O Aggregators. Utilization runs at 100 percent.
FX2 Architecture Provides Capacity Cost Savings, Space Savings, and Management Efficiencies
As mentioned, Forrester’s study found that the hypothetical organization would realize an overall net present value return on investment of $6.3 million—a 58 percent return on an infrastructure investment in the FX2 solution of nearly $11 million. What’s more, compared to rack servers, the FX2 architecture provided an immediate 15 percent acquisition cost savings or, more accurately, cost avoidance. This would amount to about $12.7 million over three years.
Following is more detail on the study’s findings and sources of savings. (Note that space doesn’t allow a full accounting of the study’s total ROI. For that, please download the complete study.)
- Operational cost savings. With the FX2 solution deployed, the model organization would realize colocation cost savings of nearly $1.7 million over three years, thanks to the solution’s much greater density than traditional rack servers. These savings would come from a 50 percent reduction in space requirements, along with a commensurate reduction in power.
- Improved time-to-market. Although hard to quantify, the Forrester model assumes that previous rack servers required six weeks to acquire and deploy additional capacity, whereas the FX2 architecture would cut that time in half. This three-week savings would help to accelerate the realization of five projects annually, driving $1.2 million in incremental gross profit each year.
- Simplified IT management. The model organization would realize more than $500,000 in management time savings due to faster installation times; improved chassis management; previously unavailable remote systems management; and automated system provisioning via the integrated Dell Remote Access Controller (iDRAC) with Lifecycle Controller that is embedded in every Dell PowerEdge FC630 server.
The study also noted that the composite organization would potentially improve its business agility and flexibility, due to the ability to add capacity quickly, but declined to quantify the value of those capabilities.
What’s clear from the Forrester study is that companies can quickly recapture their investments in highly modular server architectures and then achieve ongoing returns on those investments. Further, the compelling business case that’s spelled out in the 20-page study shows why modular server architectures, such as the Dell PowerEdge FX2 platform, will be the future of data centers everywhere.
For your copy of “The Total Economic Impact of Dell FX2 Architecture” study, click here.
