Challenges and Solutions

The challenges faced by midsize businesses remain daunting. Yet as signs of economic recovery emerge, IT
spending by these businesses is increasing. Technology continues to offer the potential for greater
competitiveness, improved efficiency and higher productivity.

The technology value equation is, however, becoming broader. In most industries, organizations continue to
upgrade core business systems and expand in e-commerce, while seeking to exploit new waves of analytics,
mobile, cloud and social media technology.

Adoption of next-generation technologies has been driven by fundamental business trends. More complex
business environments have led to unprecedented growth in analytics. Demand from customers, partners and inhouse
staff has made use of mobile devices routine. Growth in social media has obliged businesses to follow their
customers into new channels. Cloud computing offers new opportunities to reduce IT costs, accelerate solution
delivery and increase flexibility of deployment.

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IT Costs

In representative installations in midsize manufacturing, distribution and retail companies, three-year IT costs for
use of IBM i 7.2 and Power Systems average 45 percent less than for use of Microsoft Windows Server 2012 and
SQL Server 2014, and 51 percent less than for x86 Linux servers and Oracle databases.

Figure 1 summarizes these results.

Figure 1: Overall Three-year Costs by Platform – Averages for All Installations

Costs included hardware acquisition and maintenance; license and support costs for operating systems, databases
and other systems software; personnel costs for system and database administration; and facilities (primarily
energy) costs. Hardware, maintenance and software license and support costs are based on discounted prices
reported by users.

Installations are composites based on input from 42 midsize businesses employing IBM i on Power Systems,
Windows servers or x86 Linux servers in manufacturing, distribution and retail companies. Companies ranged
from $300 million to $1.65 billion in revenues, and employed 500 to more than 5,000 people.

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Risk Exposure

Costs of Downtime

IT costs are only part of the picture. The ability to maintain high levels of availability and security also has major
bottom-line implications.

It is a truism that downtime costs money. In world of globalization, Internet and mobile commerce, and social
media interaction, 24/7 availability has become the norm for a growing number of systems.

The impact not only of unplanned (i.e., accidental) outages, but also of repeated planned outages for tasks such as
software updates and scheduled maintenance may be substantial. Operations may be disrupted, orders and
shipments delayed, and a wide range of other activities affected. Customers may be alienated and business lost.

Costs of downtime have been widely documented for core business as well as e-commerce systems. In some
industries, they are clearly increasing. Among businesses that operate tightly integrated, lean supply chains, for
example, there is growing evidence that disruptions at any point may cascade rapidly through the entire supply
chain. The effects may continue to be felt long after service has been restored.

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