WHITE P APER

Business-Critical Workloads: Supporting Business-Critical

Computing with an Integrated Server Platform
Sponsored by: Microsoft Corporation

Al Gillen Jean S. Bozman

April 2010

EXECUTIVE SUMMARY
Microsoft has deepened its commitment to support demanding workloads on Windows
Server in recent years, with continual improvements coming in each new release.
Microsoft has improved the built-in availability features, and it continues to exploit the
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reliability, availability, and serviceability capabilities that are integral in today's server
hardware platforms.

Over the same period, a new generation of x86 server hardware, based on multicore
x86 processors, has emerged providing deeper support for virtualization and improved
management capabilities. Not only are Windows Servers getting more capable and
scalable, but they are inherently providing more usable protection against unplanned
downtime, which would otherwise affect a large segment of a business' user population.

All of these improvements have resulted in more x86 Windows Servers today that are
outfitted with more memory and I/O, designed for and used for business-critical
workloads. Examples of this important class of applications include line-of-business
(LOB) applications, such as enterprise resource planning (ERP) and customer
relationship management (CRM), and larger databases. This situation is very different
from the Windows systems of the late 1990s or early 2000s.

Microsoft and its server OEM partners have invested heavily in improving both the
hardware and the software environment for business-critical workloads. Microsoft
Windows Server 2008 R2, the newest release of the Windows operating system,
increases the absolute scale of Windows Servers to 64 physical sockets on the server,
and to a total of 256 logical processors running on the very largest server designs. In
addition, Microsoft's layered servers also continue to scale, demonstrated by the
improved scalability of the Microsoft SQL Server 2008 R2 database to support larger
single-system images (SSIs), ranging from 1TB to 10TB, or more. The evolution of the
hardware platform running Windows Server has changed too, altering the mix of
workloads running on Windows systems.

For customers, this means that there are more deployment options than there were just
five years ago — and more use-case scenarios for Windows deployments. For
workloads that have been running on datacenter midrange and high-end servers, there
are now additional options for deployment, either on virtualized or non-virtualized
systems with 4, 8, or 16+ sockets.

Customers are responding to the increased business readiness of Windows Server

2008 and SQL Server 2008, such as Kimball International — profiled in a customer
snapshot in this IDC White Paper. Kimball moved its business-critical SAP
applications on an Oracle database from a Unix/RISC infrastructure to a Windows
environment and the Microsoft SQL Server database — and did so with great
success. Today, the company finds that its Windows Infrastructure has proven itself
with virtually no unplanned downtime in the past year — running on an infrastructure
that saves the company hundreds of thousands of dollars per year.

IDC sees 2010 as an inflection point — a time when many datacenters are being
upgraded or changed. Many IT projects that were deferred or delayed in 2009 due to
the economic downturn will likely be put back into rollout mode, with new server
hardware and new software releases on order. For projects involving workload
consolidation, many customers are embracing virtualized server deployments,
ensuring isolation of applications and improved availability.

SITUATION OVERVIEW
Business processing (BP) workloads are among the most demanding workloads in
the enterprise: they include transactional workloads reflecting the "engine" of a
business' orders and sales, ERP workloads for managing workflows, and CRM for
managing customer relationships and decision management solutions. These
workloads need to be available to end users, end customers, and business partners.
To achieve that goal, they are typically supported by a combination of hardware
characteristics, such as built-in reliability and scalability features, and software
characteristics, such as system management and support for high availability.

Historically, the most scalable systems in enterprise datacenters, including

mainframes and large host systems, took on the most demanding business-critical
workloads. But IDC research indicates that in recent years, customer behavior is
shifting to move an increasing share of their business-oriented workloads to x86
servers (servers based on Intel or AMD x86 processors) — and that an increasing
percentage of these x86 server workloads are running on Windows.

Figure 1 shows the mix of customer deployments of business-oriented workloads

(business processing including ERP, CRM, and online transaction processing [OLTP],
as well as decision support including business intelligence [BI] and business
analytics) aboard Windows platforms, as well as alternative server operating
environments. According to Figure 1, in 2008 22% of new Windows Server
deployments were business oriented. By comparison, Linux customers deployed 18%
of new Linux servers for business-oriented applications. Unix, as a more mature
operating system with a long history of use for business purposes, saw 44% of new
customer deployments in 2008 focused on business-oriented uses, while IBM's z/OS
for the mainframe shows that it is possible to have a workload mix that includes 70%
of business-oriented solutions.

2 #222653 ©2010 IDC

FIGURE 1

Business Processing and Decision Support Workloads

Compared with Other Workloads by Platform, 2008

z/OS

Unix

Windows

Linux

0 20 40 60 80 100
(%)

Bus Proc/Dec Sup Other Workloads

Source: IDC, 2010

IDC's workloads research shows that the share of business processing and decision
support workloads deployed by customers on x86 servers has risen steadily since the
mid-2000s, although it is clear that many critical workloads still remain on traditional
datacenter scalable systems. With more options for deployment in place, customers
tend to deploy workloads based on the application itself, as well as user requirements
— and then evaluate which operating systems are suitable for the underlying
platform.

The takeaway is that customers facing decisions about how to move from their
currently installed applications aboard aging server platforms to a next-generation
solution should not overlook x86 servers for even their most business-critical
application requirements.

Evolution and Growth of Business-Critical

Workloads

IDC's ongoing workloads research has captured patterns in workload hosting, and the
way in which they have changed, for most of this decade. IDC's workloads data is
based on an annual survey of more than 1,000 customer sites, capturing the server
architectures, operating environments, and workload types that are deployed at each
site. The patterns of deployment have changed in the past 10 years, with an
increasing percentage of those workloads shifting to new platforms over time.

©2010 IDC #222653 3

Figure 2 introduces the workload mix aboard Windows-based servers as a share of
the total workloads aboard Windows. When viewed as a share of total unit volume,
business-oriented workloads including business processing and decision support
expanded from 11.2% of the worldwide total for Windows Server deployments in 2000
to 22.2% in 2008. The majority of this share shift came from application development,
industrial R&D, and the "other" workload segments. Database workloads are not
broken out in this view but are incorporated as part of most business processing and
decision support installations.

FIGURE 2

Worldwide Windows Workloads Shipment Share, 2000–2008

100

80

60
(%)

40

20

0
2000 2002 2004 2006 2008

Business Processing Decision Support

Collaborative Application Development

IT Infrastructure Web Infrastructure

Industrial R&D Other

Source: IDC, 2010

IDC notes that business processing workloads include ERP and CRM workloads as
well as online transaction processing workloads, while decision support workloads
include database analysis, business intelligence, and business analytics;
collaborative workloads include email and groupware; Web infrastructure workloads
include Web-serving, proxy and caching; and IT infrastructure workloads include
file/print and support for network protocols. Further, application development
workloads are those associated with programming/development of software; and

4 #222653 ©2010 IDC

industrial R&D workloads are associated with scientific/technical/engineering
workloads. All of these workload types are defined within IDC's workloads taxonomy
for the annual IDC workloads demand-side, customer-based research.

This shift shows but one dimension of the story for workload growth on the Windows
platform. The other dimension is much more readily exposed when unit volumes are
overlaid on top of the workload splits.

Figure 3 constructs this view and highlights how the compounding of the workload
share growth for business-oriented workloads combines with the overall unit volume
of customer deployments for the Windows Server operating environment platform.

FIGURE 3

Worldwide Windows New Shipments and Deployments by

Workload, 2000–2008

7,000

6,000

5,000
(Thousands)

4,000

3,000

2,000

1,000

0
2000 2002 2004 2006 2008
Business Processing Decision Support
Collaborative Application Development
IT Infrastructure Web Infrastructure
Industrial R&D Other

Source: IDC, 2010

From 2000 to 2008, shipments and deployments of Windows Server operating

environments to customers grew from 2.5 million units to 6 million units, more than
doubling the overall volume total. The combination of unit volume and share shift

©2010 IDC #222653 5

ensures that Windows business-oriented workloads are accounting for the largest
overall volume of any platform in the industry.

IDC finds that BP workloads are progressively shifting from mainframes and host
servers based upon RISC and EPIC (Itanium-based) architectures to x86 servers.
This shift in business processing deployments is taking place in parallel with a
broader industry shift to favor x86 servers as the volume platform solution. Business
processing workloads include the following: transactional workloads including OLTP
and LOB applications (ERP and CRM), BI, database, and collaborative workloads.

The compound effect of the growth of Windows Server operating environment

shipments versus a flat or declining growth rate of large system and Unix servers,
mapped against the shifting mix of Windows deployments to increasingly favor
business-critical deployments, means that on an industrywide basis, there is a trend
for business workloads to move to x86 servers, most often on a Windows platform.

In the IT infrastructure and collaborative workload spaces, the x86 platform,

particularly when paired with the Windows Server operating environment, has
become the leading platform of choice, and today heavily dominates new
deployments of these workload types. For new collaborative workload deployments,
Windows captures four out of every five deployments industrywide. For IT
infrastructure deployments, Windows captures three out of every four new
deployments.

Improvements in the hardware and software technologies for x86 servers in recent
years have allowed business processing workloads to become more strongly
established on x86 servers. The x86 servers that support BP workloads are typically
outfitted with more memory and I/O and more reliability, accessibility, and
serviceability features and high availability (HA) characteristics than was the case 5 to
10 years ago.

The advent of multicore processors, combined with higher socket counts in x86
servers — and support for 64-bit workloads — make x86 servers much more capable
than they were in the mid-2000s. Today, quad-core processors have taken their place
beside dual-core processors — and system vendors have had to increase the
memory allocated for these highly capable servers to balance the increase in onboard
processing power.

There are a number of factors that will drive more business processing workloads
aboard the Windows platform. In particular, IDC expects a continued trend where unit
volume growth will mainly be centered around x86 servers, while competitive
platforms running on other architectures will see less unit volume growth due to a
number of factors, including acquisition costs and the availability of IT skill sets
associated with traditional datacenter technologies. When combined with the
increasing maturity of server operating environments shipping for the x86 platform,
the attraction of installing business-critical workloads on Windows will continue to
grow.

6 #222653 ©2010 IDC

Leveraging Windows Skills for BP Workloads

IT sites that have already made substantial investments in Windows software

environments are applying the IT skill sets, including programming and system
administration, to business processing workloads. By doing so, they are leveraging
people and financial resources — and applying them to a broader range of tasks.
Following are some of the key drivers for this approach:

` Reliability, availability, serviceability. Long considered table stakes for

business-critical computing, these are the features in the server hardware which
provide redundant components, additional memory, and multiple paths for I/O
and are key to ensuring availability for applications and business continuity for
important workloads. The system software must be able to work with, and
support, these hardware-based reliability features for a total server-based
solution supporting high availability.

` Scalability. Windows Server 2008 R2 now scales up to 256 logical processors or

up to 64 sockets at the high end of the server market. In a system built on quad-
core processors (e.g., Intel Xeon or AMD Opteron), this translates to a 64-
processor system, which would be at the very high end of all server form factors.
However, with 6-core processors being shipped now, and 8-core (octo-core) and
12-core processors on the horizon — to be shipped within three years — this
type of capability and scalability will support a broader range of server
configurations for Windows deployments, including midrange servers (servers
priced from $25,000 to $250,000).

` Security. Windows support for the Internet security standard IPV4, and now
IPV6, means that Windows is current with the latest security standards for
Internet networking protocols. This is another factor allowing Windows to
compete more heavily with other datacenter systems that also support IPV6.
Microsoft's continued effort to offer out-of-the-box deployments that are locked
down by default, with services installed in a default-off condition, along with
greater granularity for administrative and directory delegation, ensures that
Windows Servers can be deployed more securely, and can remain that way
through their life cycles.

` Support for virtualization. The most scalable datacenter systems are, typically,
virtualized (e.g., mainframes, Unix servers). This is done for several reasons,
including workload consolidation on a single frame, workload isolation to avoid
resource contention, and improved and more granular system management.
Windows Server 2008 R2's Hyper-V update can now be deployed on scalable
servers, supporting a virtualized computing environment on scalable datacenter
servers with 4 or more sockets. Microsoft's solution set offers the ability to
provision, patch, and life cycle manage virtual guests the same way Microsoft's
management tools can address physical Windows instances. In addition, the
integration of availability features in Hyper-V, such as live-migration across
different CPU versions and the ability to park underutilized cores, offers more
sophisticated capabilities that extend the value proposition of Hyper-V.

©2010 IDC #222653 7

` User familiarity with the Windows operating system. Over time, a greater
percentage of the overall programmer and system administrator population on IT
staffs are trained on, and familiar with, the Windows operating system and its
functionality. This is an enabling factor for future deployments on Windows
Servers, allowing Windows skill sets to be applied to a broader range of server
systems in the datacenter — and helping to address the challenge of finding IT
staff to work on midrange and high-end systems.

` Presence of LOB application software in the marketplace. More LOB "titles"

have been ported to Microsoft Windows in recent years, providing customers with
the option to deploy these applications, including the widely used SAP and
Oracle ERP programs, on Windows Servers. Many of these applications
originated on mainframes, minicomputers, or Unix servers, and they have since
become available for use on the Windows platform.

` Power and cooling. Energy efficiency is a top-of-mind concern for IT managers

in the datacenter. Microsoft's work with system vendors to address energy
efficiency and power management will be leveraged in scalable server products
supporting business-critical workloads running on Microsoft Windows–based
servers. The ability to consolidate workloads onto fewer server "footprints" also
contributes to power and cooling savings, reducing operational costs.

x86 Hardware Trends Enabling Business-

Critical Deployments

A new generation of x86 servers, based on Intel Xeon 7500 and Xeon 5600 and AMD
Opteron processors, is being designed and shipped by server vendors worldwide.
The new systems, introduced in 2009 — with many more announcements in 2010 —
combine higher socket counts (4-socket and 8-socket systems) with higher core
counts (using quad-core processors, 6-core processors, and 8-core processors).
These "dense" computing systems are generally outfitted with more memory and
more I/O capacity than 1-socket or 2-socket servers, and they generally support
higher numbers of virtual machines (VMs) per physical server

Besides the greater density for the computing platform itself, many of these new
servers include more built-in business-critical features, such as redundant hardware
components (in case any one of them fails), hot-swappable components for quick
replacement, more efficient power and cooling (avoiding overheating conditions), and
alternate pathing for I/O (which provides an alternate path for data transfer) to reduce
system contention for I/O resources and to avoid I/O bottlenecks. These are the kinds
of features that routinely were built into scalable datacenter servers — and they are
now finding their way into x86 server designs.

In addition, some server vendors are adding special circuits to control system
management; these electronics can isolate problems or help to reallocate resources
in case some hardware components fail. Again, these kinds of innovations in x86
server technology build on years of experience in datacenter server engineering. As
such, they will enable x86 servers to take on a greater range of business-critical
workloads. And, in the event that any physical server fails, or in the event of an

8 #222653 ©2010 IDC

outage (e.g., power outage, network outage), the server workloads can be shifted to
alternative servers for continued processing.

By way of background, the population of x86 servers worldwide has become far more
important to IT shops, and to the businesses they support, than ever before. Sales of
x86 servers accelerated in 2000–2001 during the previous economic downturn, and
now x86 servers account for more than 90% of all server units shipped annually —
and for more than 50% of all server revenue worldwide. Microsoft Windows accounts
for the largest market share of all operating environments running on x86 servers,
both by unit shipments and by revenue — but it is important to note that the Hyper-V
hypervisor supported by Windows also supports Linux guests running Novell SUSE
and Red Hat Enterprise Linux.

Further, a combination of third-party software and Microsoft software also supports

virtualized guests for Sun Solaris for x86 servers. Customers can benefit by having
these operating systems running on the same hardware platforms because the
provisioning of workloads to alternate servers, across the IT infrastructure, provides
greater IT flexibility and greater business agility than in non-virtualized x86
infrastructures.

Windows Server 2008 R2 Support for

BP Workloads

Microsoft is moving forward with a number of initiatives to ensure that its competitive
position remains strong, with significant investments continuing to go into the
virtualization infrastructure — including the Microsoft Hyper-V hypervisor, System
Center Virtual Machine Manager (VMM) and, more recently, interoperability initiatives
designed to enable Microsoft to compete more directly with VMware.

At the same time, Microsoft is broadening the range of the workloads it supports —
having added a high-performance computing (HPC) clustering software product
several years ago. To the extent that Microsoft is successful in the virtualization
space, it will drag more Windows Server operating system instances into use at
customer sites. However, virtualization is also altering Microsoft's product mix to
increasingly favor high-end versions that support deployment of replica copies under
a single perpetual license.

The launch of Windows Server 2008 R2 in October 2009 brought important new
capabilities to the platform. The enhancements in Windows Server 2008 R2 include
greater high-end scalability (with support for up to 256 logical processors), additional
core deployment roles, and updated releases of the integrated Internet Information
Services (IIS) and a new release of the integrated Hyper-V hypervisor.

In addition, Windows Server 2008 R2 brings a consolidation of its support for client
virtualization through the newly named Remote Desktop Services (which replaces the
formerly labeled Terminal Services portfolio). The improvements in Windows Server
2008 R2 extend the capabilities of the Windows platform for large applications that
support hundreds of thousands of end users.

©2010 IDC #222653 9

IDC notes that it is common to see Windows used as a foundation for supporting ERP
or CRM workloads for LOB operations. But equally important, the availability for
business-critical workloads is being enhanced through the use of availability and
clustering software (ACS), including Microsoft Cluster Server software, which ships
with the Enterprise and Datacenter SKUs of Windows Server 2008 R2.

Microsoft SQL Server 2008 R2 Support for

BP Workloads

Microsoft SQL Server 2008 R2 has the potential of leveraging the SQL Server
database in business-critical workloads that need strong scalability to support more
computing resources, larger single-system images — and large numbers of end
users.

Because so many business-critical workloads rely upon production databases, the

combination of a scalable database with these critical workloads is an expectation on
the part of enterprise customers — as a "given" for business-critical computing. As
Windows Server workloads that are deployed with Microsoft SQL Server scale up in
size, so must the scalability of the SQL Server database supporting those Windows
Server workloads. Windows Server, when running on midrange servers (priced
$25,000 to $250,000) and high-end scalable servers (priced at $250,000 or more),
needs to be paired with a scalable SQL Server image.

Scalability
The current version of Microsoft SQL Server can scale up to 256 logical threads
within one single system image — and up to 64 physical processor cores on 4-socket
and 8-socket servers (and up to 128 processor cores on systems with 16 or more
sockets). That, combined with improved performance found in modern x86 hardware
architectures, brings a new dimension of scalability to high-end deployments of SQL
Server. All of this is good news for longtime SQL Server customers that have had to
run smaller images — or have run out of capacity in their current x86 servers.

Now, the "node" itself is being expanded to a large server — and to more capacity in
terms of memory and I/O than ever before. This becomes even more important in
view of the new-generation x86 processors from Intel and AMD which support 4, 8, or
more individual x86 processor cores. These new multicore processors will allow
system OEMs to build more scalable x86 servers — and to add more reliability,
accessibility, and serviceability hardware features in those servers to support
midrange server and high-end server workloads.

The improved scalability — and the ability to support as much as 1TB of physical
memory in the server — and multiple terabytes of stored data (e.g., in a SAN) of
memory will support workload consolidation projects that bring together data that was
originally hosted on multiple, smaller images of SQL Server running on volume
servers (servers priced less than $25,000), many of which are aging in place. By
consolidating these images on fewer, more scalable, physical servers, customers can
realize operational savings in the areas of improved management, reduced IT staff
requirements, and reduced power and cooling costs compared with the earlier
deployments.

10 #222653 ©2010 IDC

Business Continuity
Business-critical applications depend on high-availability features in both the
hardware and the software to ensure business continuity — that is, the ability to
support business processes, even if an unplanned event (e.g., network outage, power
failure) occurs that causes processing to stop, even momentarily. In this case,
Microsoft's Windows Failover Cluster (WFC) software shipped with Microsoft
Windows Server 2008 R2 (Enterprise and Datacenter Editions) SQL Server failover
clustering built on top of WFC handles the failover of the SQL Server workload in
cases of unplanned downtime. Failover Clusters can now support up to 16 individual
server nodes, although single SQL Server images must be run within a single,
scalable node rather than spread across the cluster. This makes the increased
scalability of SQL Server images even more important for business-critical workloads.

Another important component of business continuity is the ability to support planned

downtime — that is, the ability to transfer an important workload to another physical
server to repair or to update the originating physical server. There may be a short
period of interruption as the workload is transferred — a time period that is being
shortened by the emergence of live migration capabilities such as those supported by
Microsoft Hyper-V hypervisor software for virtualized computing environments.
Further, live migration technology can be used to move workloads from one partition
to another within a scalable server — again, in the context of planning to move
workloads so that physical server repairs can be made, software updates can be
applied, or resources can be reallocated to give more to growing workloads. In the
physical world, rollover patching can be accomplished using SQL Server in
combination with the Windows Server failover cluster software.

Security
Security is an aspect of processing that is closely allied with availability. If security is
breached, an incident of downtime takes place — and end users are deprived of
accessing "critical" applications and data. That is why ensuring security is key to
protecting the availability of business-critical workloads. And yet, security is often
seen in isolation — as an attribute to be protected through software and best
practices — rather than as a component of overall business continuity and ongoing
support for business processes.

A more typical view is that security is the absence of computer threats, such as
hacking, or security breaches due to disgruntled employees, remote programmers, or
the use of malware. From that perspective, the best defenses involve the use of
security "perimeters," defined by firewalls or other kinds of software-defined
boundaries within a wider network of computers.

IDC believes that both perspectives are important — that much can be done to
protect a server "from the beginning" — from the time that the server is first installed.
The use of software conforming to the IPV6 security standard is also helpful — and
this is supported by SQL Server 2008 R2 as well. In turn, IPV6 provides support for
the IPSec standard for Internet computing, and for Kerberos-enforced authentication,
based on randomized key encryption and tested for many years by a wide variety of
standards bodies, by systems and software vendors, and by large enterprises.

©2010 IDC #222653 11

But customers must think beyond the installation process to protect and defend
server security from a 360-degree perspective. That is why planning, best practices,
and deep support for security standards must be combined to get the highest levels of
security to protect production databases and business applications.

CUSTOMER SNAPSHOTS
Following are encapsulations of the use-case scenarios experienced by two
customers that deployed business-critical workloads on Windows Servers.

Moving from Unix Skill Sets to Successful

Windows Deployments

A $1.2 billion manufacturing company with diverse operations ranging from

electronics to furniture to medical devices, Kimball International embarked on a
journey to reduce IT hardware, software, and support costs through a move from Unix
on RISC servers over to Windows on x86 servers to support the company's business-
critical SAP application portfolio.

With IT roots that date back to IBM mainframe usage in the 1980s and Unix servers in
the 1990s, Kimball International was facing a difficult decision as the clock was
running out on the usable life cycle for the company's Unix/RISC servers. After
retiring its last mainframe in 1997, the company initially used IBM System p servers
running the IBM AIX Unix operating system but later standardized on HP-UX Unix
running on the HP 9000 line of PA-RISC-based Unix servers, which carried the
company's operations for the next decade.

Finally, facing an increasingly urgent need to migrate a replacement for the HP PA-
RISC servers, Kimball's IT shop was looking at the HP Integrity product line, which is
built around the Intel Itanium processor family. Concerned over the acquisition and
support costs, the company took a daring turn and decided to make a move to
Windows on HP ProLiant x86 servers.

The initiative was first proposed in 2006, when Christopher Neu, IT Manager, ERP
Systems, and Ken Kemker, Director of Enterprise Architecture, were attending
SAPPHIRE, SAP's annual user conference. Neu and Kemker got the idea to seriously
evaluate the viability of moving their entire SAP infrastructure — and to move it over
to a Windows-on-x86 architecture. When they returned from the conference, the idea
was greeted with skepticism by the IT staff, many of whom had "grown up" in the Unix
environment. Like many Unix administrators, Kimball's Unix experts had little direct
knowledge of how to configure and use Windows for business-critical deployments
and had significant reservations that Windows was simply not up to the task.

However, the potential savings for hardware and related support services were not
just attractive, they were outright compelling, and Kemker and Neu forged ahead with
careful evaluation of the possible move. Importantly, they decided to retain the Unix
administrators — and decided to provide training in Windows use and administration,
allowing them to keep their jobs — and for Kimball to retain its deep understanding of
the company's operations.

12 #222653 ©2010 IDC

In sizing the potential savings for the first stage of the migration, the company saw the
opportunity to trade a $250,000 hardware investment in two next-generation servers
in exchange for a $50,000 purchase of x86 replacements. On top of that savings,
Kemker cited the cost of the annual maintenance contract, which was $100,000 for
the furniture division, $70,000 on the electronics business, and another $70,000 on
the corporate side of the business.

All of these expenses made the idea of buying into another cycle of Unix midrange or
high-end systems hard to contemplate. In contrast, the attraction of going to a
standardized x86 server — that could be on the same service contract that already
covered other Windows Servers in the company — was compelling. Long term, the
goal was to move all of the company's SAP "landscapes," based on individual SAP
modules, over to Windows.

But there were those nagging concerns within the staff, particularly those individuals
responsible for the Oracle database and the largest SAP application servers, that
Windows was up to the task of providing high levels of uptime. Kemker and Neu did
their homework and found other SAP shops that had successfully made similar
transitions, which became reference points for the migration. When it came time to
make the actual move, they hired RealTech AG, a German consulting firm and SAP
partner with U.S. offices — and a long resume of successful SAP migrations — to
orchestrate the migration.

After three months of preparation, the day came to move the first landscape over to
Windows. The first migration took a week, but that experience helped Kimball's IT
staff learn how to shorten the process. Ultimately, the company engaged RealTech
twice more for two additional migrations, and today it has virtually all of its SAP
solutions running on Windows Server and on SQL Server 2008.

The biggest surprise, says Kemker, is the performance. "Everyone was looking for
major problems with it running on Windows. Everyone was shell-shocked when it
went smoothly. It surprised me [then], and [it] still does today, that we don't have more
problems than we do." Asked how much unplanned downtime there was in the past
year, and the answer was "I don't know that we had any."

In the end, the company believes it has saved a total of about $500,000 per year of
costs in reduced database software licensing fees, lower management costs, reduced
costs for acquiring backup and other infrastructure software, reduced hardware
expenses, and vastly lower support and services costs when using the x86 hardware.
Interestingly, the company stayed with HP as its primary systems supplier, valuing its
longtime relationship with HP and its history of support and services.

Kemker and Neu offer the following advice to other IT professionals considering a
similar move to Windows:

` Make sure you partner with a team that has experience. For Kimball, RealTech
delivered that experience, making the migration process easier.

` Forget everything you know about Windows Server and SQL Server from five
years ago. You have to look at Windows Server and SQL Server today because
both products have advanced features compared with 2005 versions.

©2010 IDC #222653 13

` Look at what you are delivering, not at what is available. The Intel Xeon x86
platform — with more powerful processors and better energy management — is
totally different than it was five years ago. Unless your organization has
absolutely zero tolerance for downtime, provided that applications can be
restarted quickly, if needed, it is no longer necessary to consider a high-end
server to run business applications.

Migrating from the Mainframe, Medical

Supplies Reseller Cuts Costs by Moving to
Windows and SQL Server

Owens & Minor (O&M), an $8 billion distributor of medical supplies, moved important
custom applications from an aging mainframe system to x86 servers running migrated
COBOL code, Microsoft Windows Server, and the Microsoft SQL Server relational
database. The company supplies hospitals across the United States — and its
business is highly optimized to do just that, with distribution centers in 55 cities —
running customized applications that were developed in-house and optimized for
Owens & Minor's business through the years. In all, 2,000 end users inside the
company are supported by the Windows systems — 500 of them in customer service.

"The systems that were moved to Windows are business critical," said Rick Mears,
Senior VP and CIO at O&M, which is based in Richmond, Virginia, and listed in the
top 300 of the Fortune 500 list. "We deliver same day to hospitals," Mears said. "We
distribute on behalf of 2,000 manufacturers that choose to go through the resale
channel. We inventory 200,000 items at one time from those 2,000 manufacturers,
and we carry another 300,000 items in our catalog."

The task of moving the original COBOL code was one that required preparation and
planning — and work by developers to leverage MicroFocus COBOL tools as the
code was migrated to run on x86 servers. After migration, the customer applications
were put into production on an 8-socket, quad-core x86 HP ProLiant server running
Microsoft Windows Server 2008.

From an IT perspective, the amount of work that can be done on a high-end x86
server, which is built on multicore, multisocket technology, has increased greatly in
recent years. These scalable x86 servers support dense computing, providing more
business-critical features and availability than was the case just 10 years ago. From a
business perspective, O&M believes that the benefits of making the move were clear
because of the familiarity of IT staff and developers with the Windows environment,
making Windows IT skill sets central to operations.

"Faced with a modernization approach, you have three choices," Mears noted, "throw
it away and replace it, rewrite it, and migrate it." In the end, the company decided to
migrate the source code because it is closely aligned with the company's business
processes and represents years of optimization work. "We liked the applications
logic," Mears explained. "It's all right there in the 10 million lines of code. We did a 'big
bang' application migration because we could not figure out a way to do it in pieces."
After many months of preparation, the switchover from the mainframe applications to
the Windows x86 platform took place in October 2009, with the final switchover and
testing of the applications accomplished in one weekend.

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The company's IT systems are hosted offsite by Perot Systems (now a unit of Dell
Computers). The O&M mainframe and more than 400 x86 business systems running
Windows Server have been outsourced to Perot through a relationship dating back
to 1998. The outsourcing became even more important when the company built
new headquarters, which, by design, did not include a major datacenter. However,
file-and-print workloads, desktop PCs, and small servers are still located at O&M
headquarters and regional offices.

Perot Systems helped O&M with the workload migration process and switchover and
manages the hardware acquisition and maintenance — and the software licenses.
The mainframe system had carried forward code that had been developed, and
enhanced, over a period of 25 years. There were hardware-related costs, and
multiple software licenses for the mainframe, for programs that were provided by
multiple software vendors specializing in mainframe workloads. Mears noted that
every time capacity was added to the aging mainframe system, hardware costs
increased, and software licensing costs for ISV products were growing by $1 million
per year. He added that by moving to the Windows x86 servers, total system costs
have been dramatically reduced, with an estimated $4 million in annual savings.

The migration of the distribution applications is just the beginning of a wider updating
process affecting other applications. The next step: updating the user interface that end
users and customers see on their PCs when viewing the business systems. Accounts
payable applications and updating of the purchasing are also on the roadmap.

"This migration project is a first step in the modernization process," Mears said. "It is the
step that funds the rest of the work." In the Perot Systems datacenter, O&M's IT
systems have changed dramatically since last year, with the mainframe no longer
online, and the mainframe's flat-file data structures — first installed 25 years ago —
replaced by the Microsoft SQL Server 2008 relational database. "Now that our data is in
a modern RDBMS, it gives us a lot of end-user computing opportunities to access the
data," he said. "But the customer experience is exactly the same as it was before."

CHALLENGES/OPPORTUNITIES

Challenges

Datacenter infrastructure is generally slow to change, especially for servers that are
supporting business-critical workloads. Midrange servers, including Unix servers and
host servers, which evolved from the minicomputers of the 1970s and 1980s, have
been featured platforms for business-critical computing for decades. High-end
servers, including Unix servers and mainframes, are other important platforms for BP
workloads.

The reason for the longevity of the systems is that once an application or database
becomes business critical, its continued production is vital to important business
processes. IT managers are typically reluctant to make changes to such a system, or
to replace it, unless that change is absolutely necessary. Any new systems will be
extensively tested to ensure continued stability and resilience under the pressure of
24 x 7 x 365 operations.

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Competition with Linux and Unix

Linux

Commercial Linux came of age during the economic slump of 2000–2001 and today
is adapting to changing market dynamics as virtualization matures and cloud
computing becomes increasingly realistic. Red Hat and Novell together account for
the majority of the paid Linux distributions in every major market worldwide. In many
regions, Red Hat's and Novell's commercial distributions also account for the majority
of nonpaid Linux deployments.

Workload shifts continue to mature in the Linux market, with an increasing portion of
total Linux deployments being made today to support more business-oriented and
increasingly business-critical workloads. Most of the gains Linux is experiencing come
at the expense of Unix. By contrast, IDC sees very little movement today from
Windows Servers directly to Linux servers, and Windows, too, benefits from Unix
migration.

Unix

Long a mainstay platform for the deployment of business-critical workloads, Unix

operating systems have been highly successful over the years, and this operating
environment continues to have a significant installed base of business-critical
applications and scalable corporate databases deployed worldwide. Most of the major
Unix products have been optimized for use with specific platforms rather than
shipping with a variety of vendor systems; the one exception, Solaris, runs on both
RISC and x86 server platforms.

The 2008–2009 recession was hard on the Unix market, with both revenue and
shipments for midrange and high-end Unix servers declining sharply in 2009. Within
the volume server segment of the market, some of the workloads have been
migrating to other hardware platforms running Windows or Linux operating systems.

Unix continues to have a reputation for reliability, accessibility, and serviceability to

which both Windows and Linux aspire to lay claim. Despite a general movement of
customers away from Unix as a next-generation solution, the expectations and
experience customers have enjoyed with Unix place a high bar that Microsoft
solutions must clear to win Unix migration business.

Opportunities

An era of datacenter transformation, expected to begin in 2010 as the economic

downturn bottoms out, will represent an important opportunity for Windows Server
2008 R2 to take on the hosting of some of these workloads that have been running on
other servers within the datacenter. To win that business, Microsoft and its server
OEM partners must prove to IT organizations that the hardware can withstand the
operational requirements without extended periods of downtime — and that the
software layers are resilient as well. As it works to raise the profile of Windows
systems running BP workloads, Microsoft will highlight the changing economics of the
datacenter — with efficiency and the ability to leverage in-house IT staff top-of-mind.

16 #222653 ©2010 IDC

Microsoft's attention to IT requirements for business-critical computing, as relayed by
IT professionals (e.g., IT managers, system administrators, database administrators,
and network administrators), has resulted in more functionality that places a priority
on the stability and uptime needed for business-critical workloads. Further, the
introduction of Microsoft Failover Cluster software ensures that unplanned downtime
can be addressed through the move of workloads to alternate servers, if needed. The
Microsoft software stack could be more useful in scalable systems, supporting both
physical and virtual servers, provided that its ability to meet business-critical workload
requirements becomes more widely accepted among IT managers moving workloads
to x86 servers.

CONCLUSION
As a new decade begins, an era of datacenter transformation will unfold, driven by
customers' needs to build out new infrastructure while reducing operational costs
through workload consolidation onto more scalable servers. It is apparent that a new
generation of x86 servers, as sold by many systems vendors, are well positioned to
take on the workloads that have been running on some of these older systems.

Datacenter transformation is a process involving multiple projects to update, upgrade,

and/or replace older systems of many types — but the easing of the economic
downturn that began in the fall 2009 will likely bring many deferred IT projects back
online.

Microsoft Windows is prepared to support the new generation of more scalable x86
server systems' support for multicore processors and for virtualization of the x86
server infrastructure — all of which support workload consolidation, power and
cooling improvements in the datacenter, and efficient processing. Customers will
likely evaluate Windows Server 2008 R2 as one of the operating systems that will
host business-critical workloads on these new x86 server systems, leveraging the
knowledge of Windows that has been created over the years, and the skill sets of
many programmers and IT staffers who can bring their familiarity with Windows to the
task of supporting highly demanding business-critical workloads for the enterprise.

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©2010 IDC #222653 17