Section 7.3. Business Case and Technical Requirements

7.3. Business Case and Technical Requirements

The business and technical requirements need to be defined and documented for the project. This data is not only necessary for subsequent phases to define the objectives and motivations for the project but to assist in identifying the technology components that will be incorporated into your architecture or design phase. In addition, you may need to develop the business case to attain approval and funding for the project. In other cases, the server consolidation initiative may be a subproject in an overall technology refresh project. In all of these cases, by understanding the business, technical, and operational objectives, the project team has a much better opportunity to influence cost savings, create automation, and more specifically meet your organizational objectives. Callisma utilizes Figure 7.1 to illustrate and map back the benefits of our project to executives and customer project sponsors.

Figure 7-1. The CIO's Agenda

Utilizing the "CIO Agenda" graphic in Figure 7.1, let's walk through and explore potential areas that can address some of the things on the minds of CIOs today.

7.3.1. Technology Strategy: Technology Refresh and Aging Infrastructure

One of the best opportunities for leveraging server consolidation or virtualization is when a large percentage of the server hardware infrastructure is aging and a potential technology refresh project is necessary. The equipment may be coming off a lease, and your company may want to use this as an opportunity to reduce the number of hardware platforms in the environment. Other times, our server consolidation and virtualization projects are tied closely to other initiatives such as a technology refresh. A very common example of this is when we're assisting our clients with Active Directory or Exchange 2003 design and deployment projects. Quite frequently a subproject includes server consolidation and virtualization. In other cases, we see virtualization projects as good follow-on projects to clean up the remaining legacy servers that housed applications that possibly did not support the latest operating system or where the business was unwilling to perform remediation on the application.

7.3.2. Cost Performance

The key issues related to cost performance are merger and acquisition (M&A) activities, consolidation, automation, and shared services. We'll now briefly discuss the impact that each of these issues has on your efforts to justify your project.

The proliferation of servers and data centers as a result of mergers and acquisitions is one of the most common motivating forces that assist in the justification of your project. Rarely is IT or the systems community given enough time to integrate applications and consolidate between organizations. Acquisition of data centers contributes not only to excessive hardware capital costs but excessive facilities costs, which can provide excellent hard costs savings to include in your business case. Many organizations that have gone through mergers and acquisitions have found that there are just too many servers and too many facilities to have to operate and manage. So, consolidation and virtualization provide for excellent corporate initiatives to move the organization toward utility computing that provides a more scalable, more reliable, and more flexible infrastructure solution.

Reducing hardware platforms can lower an organization's total cost of ownership. Reducing the number of hardware platforms within the environment results in a reduction of physical facilities space, direct attached storage, and direct attached tape drives, which can contribute to your business case around reduced operational, maintenance, and capital costs associated with managing this hardware. This results in improved performance and the utilization of both storage and server hardware within the environment.

Coupling technologies such as VirtualCenter and VMotion provide benefits in the area of maintenance and recovery of your servers and help ensure that improved service levels are met. These technologies can also provide your customers or business partners with speed-to-market for new applications and services.

Technologies such as SANs have taken the direct attached storage devices and created a generally available and shared utility. A greater amount of storage becomes available in a shared environment, making it easier and more cost-effective to manage. Server virtualization is now enabling the server hardware as the same generally available and shared utility. Many of the benefits of SANs also apply to server virtualization software in that it allows you to better and more effectively manage the server resources within your environment.

7.3.3. Service Agility

In today's fast-paced, competitive market, the ability to rapidly introduce new services and applications into production can make a significant difference in a business's ability to gain an advantage over its rivals. Speed-to-market and agility may become the key business drivers for your virtualization project. Just imagine the current process today with many lines of business identifying the need for a new application or group of applications to support their needs. Previously, this would have resulted in days or weeks of effort to order the servers, wait for them to arrive, and finally install them. In the new virtualized environment, within just a matter of minutes you have provisioned new VMs in your new virtualized environment. This process is provided through automation or is done by simply copying the appropriate VMs into the environment. On top of this, you perform it all remotely. When was the last time you met the LOB's application requirements without visiting the physical site or data center?

7.3.4. Simplifying the Environment

Simplifying the environment means fewer hardware platforms and suppliers. In many customer cases, they may have completed significant projects in the area of server consolidation, but for various reasons, many legacy servers still exist. Many factors contributing to this legacy server environment may be present. Perhaps the application vendor is not supporting the latest version of the operating systems, or maybe there are registry/DLL conflicts, or the applications (for whatever reason) failed when trying to co-locate them on the same physical server. With virtualization, you can still achieve hardware reduction when applications can't co-exist or run on the same hardware platform by maintaining them in their own virtual machine.

7.3.5. Compliance and Risk Reduction

Compliance is having a tremendous impact in the industry. According to AMR Research, companies will spend $15.5 billion on compliance-related activities in 2005. Projects related to the Sarbanes-Oxley (SOX) Act of 2002 and the Health Insurance Portability and Accountability Act (HIPAA), as well as the Basel II international banking accord, will be responsible for a large chunk of the spending for companies. These projects are driving significant corporate gains in the areas of automation and the review of process and procedures. Virtualization can be utilized in creative ways to help ensure appropriate security controls. Regulatory requirements are also pushing common IT processes toward automation. Virtualization can provide a high level of automation through the use of server provisioning, and likewise drive integrity and availability though its failover and backup capabilities. The business benefits for this automation drive operational support efficiencies through streamlined operations management processes and can ensure support staff are more efficient.

7.3.6. High-Level Requirements

During the business case or justification phase, many requirements have to be gathered in order to validate the need for a consolidation or virtualization project. The following high-level requirements are just some of the items gathered in this phase:

• Application requirements

• Geographical needs in terms of access and potential bandwidth impact

• Growth patterns and scalability

• Network performance, capacity, and reliability requirements

• Service level requirements

• Access mechanisms

• Business continuity requirements

• Operations management requirements

• Accounting management (including changes in the support/financial model)

• Fault management (including recovery from outages and proactive fault monitoring)

• Configuration management (including change management)

• Performance management (the responsiveness of applications and service elements, and proactive actions such as performance monitoring and capacity planning)

• Security management (including policies, procedures, access controls, and application security-related services such as firewalls, intrusion detection, and authentication authorization)

• Hardware depreciation

• Operational costs (server to administrator ratio)

• Software licensing and maintenance costs

7.3.7. Classification and Estimated Work Hours

When building your business case, an approximation of the resources and work-hour estimates needs to be identified. One of the key areas that Callisma assists our clients in is estimating potential work hours needed for the project. Application classification can be one method utilized for understanding work-hour estimates. Let's walk though a very simplified approach to determining this.

Application classification is a key step in understanding the varying levels of complexity with a business unit's application environment. The project team should define the criteria that will be utilized to classify each application. These criteria can then be used to determine the level of effort or complexity required to migrate various applications. The complexity should be based on the estimated effort required for preparing a particular application server for migration to the consolidated or virtualized environment.

By classifying the applications, the project team (which includes the business unit contacts) can assess whether servers are candidates for expedited deployment. In addition, classification of applications aids in developing schedules and assessing the workload burden.

Configuring & Implementing…
Workload Effort (Burden)

Yes, use of the word "burden" was intentional. Callisma understands that many of our customers rarely dedicate 100 percent of their internal resources to a project. So we sympathize with the internal staff who sometimes feel that extra projects translate into extra workload, in addition to their day-to-day operational tasks. This is why Callisma believes that many of the lessons learned, as well as the tools identified in the chapter, introduce overall efficiencies during the design and implementation phases of the project, effectively minimizing the burden to internal staff.

Servers with applications considered to be less complex may be good candidates to include as part of an accelerated server consolidation effort. Remaining servers may require minimal or considerable, effort to prepare for the migration.

Classifications can be based on the estimated hours required to migrate the servers. An example of this is depicted in Table 7.1.

Table 7-1. Server Migration Classifications^[1]

Classification
Function	1	2	3	4	5
Discovery	1	2	4	6	8
Documentation	2	4	6	16	24
Assessment	10	16	24	48	72
Remediation	15	20	38	60	110
Developer Testing	10	15	25	50	80
Software Distribution	5	15	25	40	72
Testing/Certification	15	20	30	60	110
Migration	2	4	10	15	25
Ops/Support	10	15	25	40	60

^[1] The numbers listed under each classification are hours per function.

Table 7.1 basically provides predetermined criteria to arrive at the estimated work hours needed to take an application server through the remediation process. Work-hour estimates would range from 1 to 5. A "1" classification would require the least effort (person hours) to migrate, while a "5" would require the most hours for remediation.

7.3.8. The Financial Model

Once you've collected all the data for your business case, you need to run a financial analysis against each scenario. Realistic cost estimates should be evaluated by the Finance department or the executive stake holder prior to the final analysis. Here are some factors to consider when developing your financial model:

• Amortization and capitalization cycles

• Net present value factors

• Staff growth factors and ratios

• Organizational staff cost factors

• Staff benefits and tax ratios

• Risk variables (for example, +/-10 to 15-percent deviation)

• Investment analysis cycle (two to five years)

• Financial presentation structure

The final step is to develop an executive briefing or stakeholder presentation to discuss the cost scenarios, benefits, business and technical objectives, and goals.