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ROI CASE STUDY
NEON zPrime™—Get Better Value out of Mainframes: A Case Study
HIGHLIGHTS:
Goal: Avoid capacity upgrades
Industry: Financial Services
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2-Year ROI: 199%
2-Year Benefit: $705,8 00
Break-Even Point: 150 days
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Business Challenge
A small mainframe shop is facing capacity upgrades needed to handle normal business growth. They have a tight IT budget and need to minimize the cost of the upgrade. NEON zPrime can give them an upgrade alternative that results in a 199% return on investment and cost savings of $705,000 over a 2-year period.
Mainframe Environment
This small mainframe shop has an IBM System z9 with 3 central processors and one zIIP processor for an installed capacity of 202 MSUs on CPs and 66 MSUs on their zIIP. They run a large number of batch jobs to support their normal business applications.
Business growth and growing internal demand combine to create a steady 12% growth rate in mainframe workloads. This growth rate means that a capacity upgrade will be needed within about 7 months.
Financial Benefits
An initial ROI analysis for this organization shows that they have ample available specialty processor capacity to handle a bit less than one-third of their workload. As a small shop, most of their software usage is billed at much higher rates per MSU than a large shop would pay, which contributes to the accelerated pay-back period and the higher ROI that zPrime can generate for the organization.
The company is most interested in using zPrime to avoid capacity upgrade events. These require significant cash expenditures for hardware, plus they result in simultaneous jumps in software costs. The company is looking at zPrime as an alternative to periodic cost spikes.
As expected, the ROI analysis forecasts a sharp ROI jump at the point in time when a capacity upgrade is cancelled, in this case, 7 months after zPrime rollout. Just one cancelled upgrade would produce a positive ROI for zPrime, though this customer expects to achieve benefits from lowered monthly software costs as well. Combining the avoided upgrades with reduced monthly software costs results in the company’s phenomenal 199% expected 2-year ROI for zPrime.
The MSU Projections chart shows how the demand for mainframe capacity, in MSUs, is growing. The light blue line shows how increasing demand would normally be met through expanded capacity, while the red line shows how zPrime lowers initial MSU consumption, and keeps the workload well below capacity.
Summary
NEON zPrime can deliver cost savings for this organization and help it avoid a capacity upgrade event this year that it would normally need to support normal business growth. With zPrime, they can save $705,800 over the next two years, which for a small company with a small IT organization, is a significant cost savings (as their 199% ROI indicates).
Beyond the initial 2-year period of this ROI scenario, the workload is projected to remain below installed capacity for several months and the company could purchase an additional zIIP or zAAP processor to avoid additional capacity upgrade events for the next 4 to 5 years.
About This Case Study
NEON Enterprise Software uses a sophisticated ROI model that can accurately forecast zPrime project costs and savings. NEON analysts have worked with more than 100 companies to prepare detailed projections based on accurate site-specific data.
 Request an ROI consultation.
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