Managing Monthly License ChargesConnecticut CMG

Andrew JepealApril 2015

Dr. Howard Rubin

• commodity server heavy organizations showed 30% higher infrastructure costs vs. mainframe heavy peers.

• Mainframe-centric organizations also demonstrated lower cost per IT goods.

• Larger businesses show more dramatic results, but similar effects can also be found in smaller sized businesses.

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PLATFORM ECONOMICS: A NEW METRICIN ALL BUT 1 OF 19 SECTORS STUDIED, MAINFRAME HEAVY ORGANIZATIONS SUPPORTED MORE INCOME PER DOLLAR OF INFRASTRUCTURE EXPENSE THAN PEERS THAT WERE COMMODITY SERVER HEAVY.

Income Supported Per $ of Infrastructure Expense Mainframe HeavyCommodity Server

HeavyBanking & Financial Services $5.54 $3.88Chemicals $13.34 $10.67Construction, Materials, and Natural Resources $40.63 $30.47Consumer Products $8.00 $5.76Education $2.38 $2.26Energy $46.53 $36.29Food & Beverage Processing $29.56 $23.35Healthcare Providers $2.33 $1.75Industrial Electronics and Electrical Equipment $13.24 $9.54Industrial Manufacturing $5.92 $4.14Insurance $1.63 $1.24Media and Entertainment $9.97 $9.07Pharmaceuticals, Life Sciences, and Medical Products $11.13 $7.90Professional Services $6.62 $4.64Retail and Wholesale $22.77 $17.76Software Publishing and Internet Services $0.27 $0.33Telecommunications $5.71 $4.00Transportation $13.15 $10.26Utilities $13.97 $11.45Full Database $13.35 $10.55 3

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Compuware The Surprising Economics of Mainframe Technology

IBM Software Bill

• ~ 25% - 30% of mainframe spending is IBM software

• Usually the biggest piece of the pie

• When we tune, we always go after the biggest things first, Yes?

• “I can count on one hand the number of customers that truly understand their IBM ELA” – Retired Industry Analyst dealing with ELAs

What’s In a Name?

• MULC – Measured Usage License Charges• WLC – Workload License Charges• VWLC – Variable Workload License Charges • EWLC – Entry Workload License Charges• AWLC – Advanced Workload License Charges• AEWLC – Advanced Entry Workload License Charges• Sub-Capacity pricing option

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That Which We Call….

• While each is a little different, they all use a rolling 4-hour average

• Misconception - Pricing is not based on the usage of the licensed product

• Pricing us based on the LPAR’s utilization where the product is running.

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The Challenge

“What’s my bill going to be this month?”

“Why is the bill so high?”

“We have to reduce the monthly spend.”

Strategies for Managing

1. Do nothing2. Capping3. Utilize Specialty Processors4. Explain Abnormal Peak5. Quantify mobile workload6. Manage the Workloads

Strategy 1 – Do nothing• A lot of companies do this, but ….

“What’s my bill going to be this month?”

“Why is the bill so high?”

“We have to reduce the monthly spend”

Strategy 2 – Capping (Hard or Soft)• Fixes the problem of “What is my bill going to be this month?” but

not necessarily “We have to reduce the monthly spend”

• Important workloads can be seriously impacted by less important workloads

• Consider tools that automatically manage soft cap Defined Capacity

Strategy 3 - Specialty Processors

• CPU to Specialty Processors do not count against R4HA

• Limited to specific types of work

• May require major application changes to fully utilize (convert to JAVA, DB2 Native Stored Procedures, etc.)

• Check with Vendors, you may have to “enable”

Strategy 4 – Explain Abnormal Peak • If valid reason for peak, let IBM know

– “Maintenance to CICS caused 20 extra MSUs during R4HA Peak”

• Need data to understand and explain peak

• Compare last month to this month

• Identify what caused peak

Mobile Is the New Driver of Technology

• 2004 – Less than 1 mobile transaction per day per mobile user

• 2014 – This has grown to 37 transactions / user per day

• 2025 – Projected 5X increase over the next 10 years– 200 per user per day X 2 billion users = 400 billion per day = 150

trillion per year

Strategy 5- Quantify mobile workload• Mobile devices are increasingly driving mainframe workloads

• April 2014: Mobile Workload Pricing

– 60% reduction in mobile workload CPU to R4HA peak

• MUST be from mobile device

• MUST show connection to mobile device

– Mobile Safari = good

– Desktop Safari = not good

• Not all organizations can identify mobile workload in an IBM approved way.

Strategy 6 - Manage the Workloads

"To measure is to know.“ Lord Kelvin

Compare Peak R4HA Month to Month

What day in that month was peak?

What 4 hour average was peak?

How does current MSU compare to 4 hour?

What is Consuming CPU at that time?

Manage the high CPU consumers• Can it be moved?

– To a different time (valley)– To a different LPAR– To a different platform

• No, can we reduce the CPU consumption?

As a Colleague at BMC says

“ Beware the whack-a-mole” effect

The Mainframe

• IS NOT the cash cow kept in the basement• IS reliable• IS secure• Thanks to Dr. Rubin we have the numbers to show

it gives a financial advantage to YOUR company• And we can help widen the gap by intelligently

managing costs

End the Debate, We Have Work To Do