REDMOND, Wash., Sept. 25, 2006 – In order to remain competitive, companies are increasingly weighing the cost advantages of migrating their existing UNIX server infrastructure to Microsoft Windows Server.
According to research firm IDC, Windows has captured 45 percent of UNIX migrations, making it the leading platform for UNIX migration overall (“Understanding UNIX Migration: A Demand-Side View,” January 2006, IDC). This was a factor contributing to the recent announcement from IDC that in 2005 worldwide revenues for Windows servers surpassed UNIX server revenues for the first time ever (IDC Press Release, “Worldwide Server Market Slows in 4th Quarter but Grows to $51.3 Billion in 2005, Highest Revenue in 5 Years, According to IDC,” February 22, 2006).
Now a new study by Mercer Management Consulting sheds light on what is driving this trend. Titled “Driving Lower TCO and Rapid ROI through UNIX Migrations,” the Microsoft-sponsored study finds that IT organizations are choosing Windows over Linux and other flavors of UNIX when migrating from UNIX servers as part of an effort to improve key business processes.
For more insight into the study and its findings, PressPass spoke with 12-year Mercer veteran John Wenstrup, a high-tech strategy consultant to the computing, storage, networking and IT services industries.
PressPass: Could you please provide some background on UNIX migration. What have been the industry trends in that space?
John Wenstrup, Mercer Management Consulting
Wenstrup: In the mid-1990s, UNIX grew to become the dominant server operating system for business computing. It led in both market share and server revenue. The UNIX market still has a huge footprint today with more than 3.5 million servers installed and in use by customers worldwide. However, other platforms have been chipping away at that number pretty consistently. In fact, most estimates concur that as many as 40 percent of those UNIX installations will be moved to new platforms over the next two or three years. IT executives and industry pundits tend to converge on four main drivers of this transition:
Cost vs. Performance. Competing platforms have made remarkable strides in performance against UNIX, such that many believe platforms such as Windows Server have essentially caught up with UNIX performance. Given the fact that UNIX is still much more expensive than competing platforms to purchase and manage over time, UNIX appears to offer a poor trade-off of cost versus performance for most application implementations in the marketplace today.
UNIX End of Life/End of Support. Many UNIX vendors are ending support for older, legacy UNIX platforms, which has spurred organizations to consider a wider range of options in the marketplace. As one executive commented, “since the vendor essentially forced me to re-platform anyway, I took the opportunity to look broadly and chose Windows instead.”
Intel-Based Server Success. UNIX vendors who have been pushing RISC-based UNIX servers for a long time have begun to support Intel platforms, particularly given the promise of robust 64-bit computing. As a result, IT executives have become even more convinced of the potential of competing platforms on Intel architecture.
Improved Tools to Ease Migration Process. Conventional wisdom used to say that migrating away from UNIX would be time-consuming, complex, and costly. In fact, most companies report that migrations have gone far more smoothly over the past three years than in the past, due to better migration tools and processes. The result has been faster and cheaper migrations.
For these reasons, UNIX migration continues unabated and looks like it may even be accelerating in some areas.
PressPass: Could you give us an overview of the research?
Wenstrup: The objectives were to understand why organizations choose to migrate away from UNIX, how alternative platforms are selected and what value companies have generated by migrating from UNIX. To answer those questions we conducted in-depth conversations and case studies with 30 global companies selected and recruited by Mercer. We talked to IT decision makers who had managed large-scale migrations from UNIX to another platform – either from UNIX to UNIX or from UNIX to Windows or Linux. Microsoft sponsored the survey and Mercer ran it independently during the spring of 2006.
We set out to examine and test the popular perceptions or conventional wisdom existing in the marketplace with regard to UNIX Migration. The study was designed to bring the experienced customer’s voice into the dialogue and shed light on their experiences in UNIX migration. In essence, we asked these very senior IT decision makers why they made the decision to migrate and what their experience has been thus far.
PressPass: Please describe the main findings of the study.
Wenstrup: In addition to the finding that IT executives continue to seek opportunities to migrate servers from UNIX, we found that Windows is the preferred choice when IT organizations migrate servers as part of a focused effort to improve business processes, deploy critical applications or restructure the IT architecture – what we call “transformational migrations.” Another key finding is that Linux appears to have gained a significant portion of its traction in smaller, more tactical UNIX migration decisions, many of which are based on less financially rigorous analysis. We also discovered at least three items that we believe are common misperceptions about the UNIX environments and UNIX migration, as follows:
Misconception #1: UNIX migration is hard. Our study showed very clearly that UNIX migration is not as difficult as many IT professionals expected. Robust tools, the knowledge and capabilities of today’s IT staff, and the way that many applications are architected make the migration much easier than many executives anticipate.
Misconception #2: Platform costs drive the economics of a migration decision. When some companies are considering migration, they assume that the costs of the hardware and software platforms are the overriding cost elements. In fact, what we found is that most of the cost of migration – around 80-85 percent – is composed of the labor of executing the migration and the ongoing labor associated with managing the environment. The total cost of the entire hardware and software platform – including maintenance costs – tends to only be 15 to 20 percent of total migration costs. Even more interestingly, the upfront acquisition cost of the software platform – e.g. the operating system – is only about 2 percent of the total migration costs, and even with ongoing software maintenance cost, is only around 5 percent of total cost. Obviously, this has implications for a company like Microsoft that competes in a world where competitors such as Linux are perceived as providing lower costs.
Misconception #3: Linux is obvious choice since it is “free or close to free.” A few individuals in our study said that they had chosen Linux as a no-brainer “because it’s free or close to free – or at least it’s cheaper for tools and the operating system.” Many others claimed that “it’s easier to migrate from UNIX to Linux because of the API (application program interface) compatibility between UNIX and Linux” or because “we can take advantage of our in-house UNIX knowledge in the Linux environment.” However, and quite surprisingly to us, the vast majority of companies who performed even moderately rigorous TCO (total cost of ownership) analysis made it clear that the risk-adjusted returns for migrations suggested Windows was often essentially a wash with Linux – and sometimes even advantaged – on total costs. As one executive told us, “we were, frankly, surprised that Linux and Windows provided about the same TCO, so we could make a strategic decision based on application availability and access to resources in the market.”
To summarize, migrations really are easier than most people think, the platform acquisition and operating system costs are a tiny portion of the overall migration cost, and deeper TCO analyses disprove the conventional wisdom that Linux is the “obvious” best, easiest and cheapest option.
PressPass: Why are more UNIX customers turning to Windows? What conclusions does the study draw about this?
Wenstrup: Many of the companies considering transformational migrations, such as moving high-end workloads or strategic workloads for business applications, have found that when they conduct a risk-adjusted analysis, the Windows platform has a very attractive overall TCO compared with Linux. The study cites as typical the experience of a European telecom company undergoing a transformational migration for its ERP application. According to the company’s head of IT architecture, a risk-averse CIO wanted to lower IT costs by moving an SAP application from the back-end and integrating it into a front-end Web server. The CIO wanted to stick with UNIX, but the head of IT architecture convinced him to consider Windows. When they did an analysis, they realized that Windows was both the lowest total cost solution – even compared with Linux – and the lowest risk solution, and the migration to Windows was fully supported by SAP.
Of the 30 companies we talked to, many ended up moving to a Windows environment after doing rigorous analyses for risk-adjusted TCO, often to debunk conventional wisdom. Many companies not only did a TCO analysis and a performance analysis ahead of time but actually went back retrospectively and checked to see whether those numbers proved themselves. We did have a couple of companies that said they achieved all of the performance levels that they had anticipated, and they had either met or exceeded their cost numbers. Again, this has been borne out by companies in large-scale implementations today.
Our study participants also pointed out that the Windows platform is a lower-risk solution than Linux around a few dimensions. First, it offers access to skill sets and capabilities, both partner and internally hired. Second, it offers “future-proofing” around applications in particular, meaning it prevents companies from getting locked into a limited set of applications as their business changes. Lastly, the Windows platform offers robust tool availability for things like systems management and so forth.
PressPass: The study notes that Linux traction has tended to come from “more discrete, less financially screened” migrations. Can you elaborate?
Wenstrup: Sure. We found that many times when companies had chosen to migrate from UNIX to Linux, those decisions were made at a much lower level within the organization. In fact, it was often an IT administrator who was making the decisions, typically not using robust ROI (return on investment) or TCO analyses. These IT administrators often put together very rudimentary business cases driven more by personal beliefs and/or “back of envelope” comparisons that would only include something like the cost of the platform, which, as we mentioned earlier, is a fraction of the total cost of a migration.
In fact, we observed an interesting phenomenon: When IT executives conducted significant and robust TCO and ROI analysis, they were more likely to turn toward Windows, and, in instances where more junior resources were making tactical decisions without rigorous analysis, they often turned to Linux. In many cases, both approaches existed within the same company, so we saw transformational or strategic investments that had a high degree of scrutiny from senior executives moving toward Windows in one part of the company, and within the same organization (albeit, often deeper in the organization) other decisions often leaning toward Linux.
As I mentioned earlier, it was not uncommon to find IT administrators who said, often quite smugly, that making the choice between Linux and Windows was easy because Linux is cheap or free, and Windows is expensive. We encountered this relatively myopic view of costs – remember the software platform costs are only about 5 percent of total costs – more often than we would have anticipated, and we found it very surprising. Of course, this is not always the case. There are some workloads and applications where a migration from UNIX to Linux rather than UNIX to Windows may end up providing a cost advantage, for instance, if you’re talking about legacy or custom applications that are easier transitions to the APIs of Linux, but those application areas are fewer and far between, and increasingly so in a world of packaged applications.
PressPass: In terms of future trends in this space, are there any conclusions we can draw?
Wenstrup: Many experts and customers we spoke to in the study agreed that UNIX would continue to be replaced on a global basis at a relatively fast clip by Windows and Linux. Some pundits have suggested that the migration may even accelerate as, for instance, Windows performance – particularly on scalability and reliability – continues to improve vis-a-vis UNIX. The cost advantages of Windows and Linux versus UNIX make a pay-back period and an ROI quite quick for many companies today. We believe there will come a day when UNIX will only remain in its last bastions, focused within a small set of implementations of custom applications and highly scale-sensitive environments in which it serves its purpose well. By most experts’ counts, UNIX will be a much smaller portion of the computing world five or 10 years from now.
PressPass: Any other comments?
Wenstrup: As the study attests, it is to customers’ advantage to always undergo a thorough and robust ROI analyses. We heard a number of stories from IT executives who said they saw people making decisions on platforms all over the company without financial rigor and coming to different conclusions. As one CIO stated, “I used to fear that for every server decision that we made with strong financial business case, there were three decisions being made around the company under the radar screen – as a result, we have rolled out a robust financial business case process for all platform decisions, regardless of size.” Many IT leaders in our study recognized a need to instill the same amount of financial rigor in all platform-related decision making companywide, transformational or not. We would agree: CIOs would benefit from applying financial rigor to all portions of their environment to ensure they are making optimal platform decisions.