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ROI CASE STUDY
zPrime™—Reduces Software License Charge
HIGHLIGHTS:
Goal: Lower software costs
Industry: Healthcare |
2-Year ROI: 300%
2-Year Benefit: $19.2 million
Break-Even Point: 65 days
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Business Challenge
A mid-size company needs to balance its budget in the near term. Every part of the organization is expected to justify costs and find savings opportunities.
The IT department has already consolidated applications, downsized its staff and realized some cost savings through energy conservation initiatives. They are not planning to add hardware and have no major software rollouts on the calendar. The largest budget line item and most visible target for cost reduction is the monthly mainframe software license charges.
Mainframe Environment
The company has a mainframe platform with a capacity of 4,221 MSUs on their central processors and 1,604 MSU on zIIP and zAAP specialty processor. An initial ROI analysis shows that zPrime could achieve higher financial benefits if more specialty processors were available, so additional zIIP and zAAP processors will be purchased at the beginning of the ROI period.
They are heavy CICS users with core business applications relying on DB2 databases. This IT organization is running comfortably within their current mainframe capacity and is experiencing steady growth, so capacity upgrade events were scheduled in months 10 and 18 of the ROI evaluation period.
Financial Benefits
An initial ROI analysis projects a $19.2 million total cost savings over a 2-year period with $6.7 million of that coming from lowered software workload license charges over the 2-year period. The company projects an overall 300% return on investment. Of the total cost savings, 28% comes from reductions in monthly software usage charges (at an average savings of $280,000 per month).
Only part of the company's financial benefit comes from lowered software costs. The remainder comes from eliminating three capacity upgrades over a 2-year period (with a savings of $13.9 million in hardware costs and $6.3 million in add-on costs).
Summary
NEON zPrime can deliver the cost savings that this organization needs in its current economic environment. With zPrime, they can lower software costs by $6.7 million and save over $19.2 million total cost savings over a 2-year period in total mainframe costs with no reduction in head count and no reduction in computing capacity or quality of service.
Beyond the initial 2-year period, a capacity upgrade will be needed, and additional zIIP and zAAP processors would be part of each future upgrade to ensure zPrime’s continuing added value.
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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