January 2004      

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	IN THIS ISSUE: FEATURE STORY: ROI for the Automated Enterprise» Disaster Recovery Spending - How much is enough?» Participate in a brief survey and discover how today's businesses are benefiting from ROI measurement»
	Quote of the Month "It is in the cold glare of today's wary and skeptical decision-makers that technology vendors now stand. Their prospective clients now want evidence. Proof points. References. They want real numbers: ROI, TCO, Payback Periods. They expect vendors to deliver a clear and credible value proposition -- one that will enable them to present a defensible business case to their bosses and boards. Clients are validating their successes with rigorous ROI analysis."  - Britton Manasco, Peppers & Rogers Group
	SEND TO A FRIEND Email this Newsletter to:   ^ Email Address   About Alinean Today’s rapidly changing economic climate supports the renewed need for information technology cost-justification. Alinean aligns IT and business performance through research methodologies and customized software tools, which measure and quantify the value of technology investments. For more information on Alinean and its tools for both vendors, consultants and CIOs, call 407.382.0005 or visit www.alinean.com.

ROI for the Automated Enterprise

Major systems management vendors are presenting a new vision of the future data center, and success-minded CIOs should begin constructing a roadmap to the automated data center, with moderate steps that ensure ROI.

Automated data centers self-configure, self-heal, self-optimize and self-protect. The underlying solutions combine intelligent management software and resilient hardware to deliver better asset utilization, make data center operations less expensive, increase flexibility to meet changing business demands and proactively provide more resilience.

Best practice features include:

• User and Resource Provisioning - adding, moving, and modifying resources or configurations to enable or enhance the performance of mission-critical applications, customers, partners or employees on a priority and demand basis

• Infrastructure Availability - ensuring consistent and readily available access to key business resources by managing availability, loss prevention and recovery

• Security Management - establishing identities and managing security of key business resources

Even modest improvements can deliver significant savings. Some key opportunities and benefits follow. 

IT Operations and Administration

Typically, 30 to 40 percent of IT spending is allocated to operations and administration – an average of $4,400 per employee in an average U.S. enterprise.  Of this spending, 65 percent is dedicated to ongoing maintenance and asset management, 25 percent for migrations and upgrades, and only 10 percent for innovation. To improve the value of IT, it’s important to decrease the ongoing maintenance and asset management through task avoidance and productivity enhancements, while increasing the resources that can be spent on innovation.

 Organizations should target the three biggest areas of gain:

1. Reduce the number of tasks an administrator performs
2. Reduce the steps and cycle-time for each task
3. Reduce the skills required

Data centers deploying consolidation and self-optimization handle their workload with 30 to 40 percent fewer assets; this saves 20 percent on overall administration. Self-healing and other best practices yield another 5 to 10 percent in labor savings. This can amount to an annual savings of $1,320 per employee for a typical enterprise.

Security

More than 85 percent of companies experienced security breaches within the last 12 months, and more than 60 percent of companies acknowledged financial losses as a result.

When a security incident occurs, IT organizations scramble to meet the challenge. Even if harm is prevented, many tangible and intangible costs are incurred:

·        Repair and Mitigation – the time and cost of finding the problem, repairing damage, recovering data and ensuring that the vulnerability is addressed to prevent future harm

·        Downtime – lost productivity, revenue and profit while the systems or applications are unavailable

·        Competitive Impact –loss of customers and market share because of system unavailability or customer dissatisfaction

Estimated security impacts per incident for various internal and external
security issues – Source: Alinean – 2003

The automated data center’s self-protecting features proactively reduce vulnerabilities, automatically distribute patches and reconfigure systems as needed, reducing security risks and saving companies 20 percent per year on security management and business impact costs.  

Virtualization and Provisioning

Automated data centers’ virtualization and provisioning features are estimated to save companies 30 to 40 percent on hardware and software, by avoiding establishing the systems for peek load. The automated data center automatically allocates assets where needed, supporting changing business priorities and meeting routine and peak performance requirements. 

Net savings can easily top $1,000 per year, per employee, based on a typical enterprise, which spends $1,633 per employee, per year for data center hardware and software, and an additional $1,496 per employee, per year on purchased software.  

High Availability

It’s difficult for organizations to quantify the cost of downtime.

How long downtime lasts is crucial. A workgroup losing just a few minutes can easily make up the time, but hours of downtime can mean invalid transactions or a permanent loss of clients. 

 Estimated downtime impact per minute for various business
applications – Source: Alinean – 2003

Downtime for a typical computing infrastructure is estimated at $42,000 per hour. At this rate, a 1 percent improvement in availability can lead to millions in reduced risk and productivity losses. 

The automated data center promises to be more resilient to downtime issues, helping companies achieve best-in-class or ‘good’ availability – typically a 50 percent reduction in downtime. For most organizations, this can mean saving millions of dollars annually.

Conclusion

The technology will continue to advance throughout the next three years and IT management will have to augment its own skills and processes to profit from the promised benefits.

All companies are different, but for those needing a resilient high performance infrastructure for business process improvement and e-business mission critical applications, the automated enterprise will deliver a solid ROI.