Lowering Cost and Improving Flexibility by Migrating to Open Systems

This paper examines two representative case studies to investigate the economic factors for migrating application work loads off of mainframe platforms in favor of open systems alternatives. The first case is based on a manufacturing company which retired its mainframe system by re-hosting an SAP implementation onto an Itanium based HP Integrity solution running Windows Server 2003. The second case examines the advantages of downsizing a mainframe installation by reviewing a financial services company, which moved several computationally intensive applications to a mixed environment of HP Integrity and HP ProLiant servers running Red Hat Linux.

Although both organizations carefully reviewed all costs associated with the alternative platforms, this paper only compares the hard dollar costs for IT operations. In both cases soft costs for availability were viewed as roughly equivalent, while the open systems solutions offered significantly improved time to market for new services. From an IT cost perspective the organizations were able to greatly reduce ongoing operating costs and achieve very rapid paybacks even while factoring in substantial investments of time and expense in the migration processes. The manufacturing company was able to reduce annual operating expenses by an impressive 71% saving $7,680,000 per year. The project paid for itself in 18 months with an initial investment of $6,136,000 and a migration time of 12 months and yielded a return on investment (ROI) of 305% over a four year period. The migration project for the financial services company was more involved, taking 18 months and requiring a total initial investment of $9,363,552. This case also yielded very strong results by lowering annual operating costs 46.4% and delivering an ROI of 117% over four years with a 30 month payback period.

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