Information technology organizations should abandon their traditional “roll your own” practices in favor of converged and hyperconverged systems from a handful of providers for transaction-intensive workloads.

That’s the conclusion of a new cost-of-ownership report and detailed analysis by Wikibon, a sister company of SiliconANGLE. Wikibon analyst David Floyer conducted rigorous financial analysis to compare the total costs of ownership and business impact of systems constructed from components such as white-box X86 servers and off-the-shelf software with integrated systems that combine compute power, storage, networking and a full software stack — so-called converged and hyperconverged systems.

His findings: Not only are the integrated systems cheaper to use in the long run, but they also have significant benefits to the business. Floyer’s analysis flies in the face of conventional thinking that building servers from scratch using low-cost components and open-source software is intrinsically cheaper than buying bundled systems from a single vendor. That’s true in the short term, but when factors such as labor costs are folded into the equation, roll-your-own solutions quickly become considerably more expensive.

Hidden costs

The analyst compared the three-year costs of a converged Exadata appliance by Oracle Corp. to a comparably configured white-box server and concluded that the no-name option costs 50 percent more over time. What’s more, he concludes, “the business benefits of improved time-to-value gained from the Oracle database appliance are over five times greater than the IT operational cost benefits.” (Oracle didn’t sponsor the research.)

In hard-dollar terms, the hyperconverged approach had a nearly $9 million advantage over the homegrown solution. More than 85 percent of that was in the form of what the analyst calls “above-the-line” savings, which include business value derived from faster implementation times and faster updates. For example, Floyer estimates that the labor costs associated with installing and configuring a homegrown server average more than $50,000, compared with about $10,000 for a preconfigured Exadata appliance.

Although hardware maintenance costs are lower for the white-box system, those savings are dwarfed by the human costs of database administration that are automated in the appliance. Similarly, the human-intensive operational support costs of the white-box approach total $316,000 over a three-year period, compared with just $46,000 for the highly automated Oracle appliance.

Software surprise

Wikibon’s David Floyer (Photo: SiliconANGLE)

What might surprise IT managers most, however, is the lower cost of database licensing and maintenance in the hyperconverged approach. Oracle, which is licensed based upon the number of processor cores running the software, operates less efficiently on off-the-shelf platforms than on its own integrated appliance. That means organizations need to buy more Oracle licenses on a white-box system to achieve the same performance and throughput levels they would get on the integrated appliance. Over the course of three years, the additional license fees add more than $1 million to the cost of the roll-your-own approach.

“As Oracle matures its engineered systems approach, it becomes more challenging for ‘roll-your-own’ to keep up for Oracle-only workloads – especially for tier-one systems of record,” Floyer writes.

The ongoing costs of software maintenance are also considerably lower because the pretested quarterly updates that hyperconverged vendors distribute are quicker to install than one-off patches, which often require rigorous manual testing.

And in some cases those savings are almost incalculable. “It is worth noting that the credit bureau Equifax Inc. failed to update its system with a patch issued in March 2017. As a result, the sensitive data of 143 million Americans was hacked,” Floyer notes dryly.

Misplaced priorities

The analyst doesn’t claim that his figures can be projected to every situation. His bigger point is that IT organizations focus too much on hardware costs and license fees in making server decisions while overlooking the much greater expense associated with labor and foregone business opportunity. “Executive management needs to focus on eliminating undifferentiated IT manual labor and develop strategies to improve the contribution of IT to the business,” Floyer asserts.

A bigger long-term issue is the inappropriateness of homegrown systems for what Wikibon has termed “true private cloud,” in which a single vendor provides an integrated platform that works across an assortment of data center and cloud platforms. Oracle and others are circling in on hyperconverged systems as reference architectures for both their cloud and data center offerings, leaving white-box alternatives out in the cold.

Although lock-in is a risk, businesses are better served by simplifying their IT environment rather than fretting over a few dollars in hardware savings. Mission-critical Oracle applications “should be aggressively moved to full-stack systems, with a single throat to choke for the total system from hardware through database,” Floyer recommends.

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