How to save on the purchase of heavy iron

About the Russian economy will not be repeated, and so you yourself know everything. It is noteworthy that HP in this situation has launched an interesting program to provide powerful server hardware, so that even those with a hole instead of a budget can buy it.

In short, the FCS (Flexible Capacity Service) program at a glance may remind leasing, only this is not leasing at all. In simpler terms, HP gives the owners of large server and data centers the opportunity to seriously save.

Where is the catch? It's not there, HP just decided to use the crisis to ease conditions and expand market share. But the FCS program itself is not very trivial to understand, so now I will try to explain on the fingers how it works.

')

How does FCS work

The main feature - the replacement of capital costs for operating. Unlike renting or leasing, the equipment belongs to HP, and you rent its capacity, that is, you pay for actual use. Plus HP together with the partner updates the servers itself as the infrastructure develops. Here is the table with the differences:

	Leasing	Purchase	HP Flexible Capacity
Equipment is on balance	Customer / HP, depending on leasing conditions	Customer	HP
An account proportional to the actual use of resources, “Pay as you go” or “ Pay as you grow”	No, payment for all equipment at once.	No, payment for all equipment at once.	Yes
Property tax	Not	Yes	Not
Procurement process	A contest is played, a contract is concluded	A contest is played, a contract is concluded	Addendum to an existing contract
Availability of ready-to-work resource buffer on the customer’s site	Not	Not	Yes
The process of updating the equipment fleet	New purchase, new leasing contract	New purchase	Within a single contract
Cost type	CAPEX / OPEX	CAPEX	OPEX
Expansion of equipment	Separate project, approval process	Individual project approval process	Under a single contract, fixed prices
Unique level of support for the entire complex as a whole (HP Data Center Care)	Perhaps only a separate contract	Perhaps only a separate contract	Within a single contract

Simplifying: you buy servers as a service. The manufacturer on its own behalf delivers iron through large partners as a service (in fact, such partners are the owners of data centers). Delivery is done from a Russian legal entity, which is important.

After 4 years of such a contract, HP changes iron to a new one and, together with a partner (together with us, for example), makes migration (this is included in the price). The customer does not need to bother much in this regard.

Here is a brief outline of the work:


What is more profitable leasing?

• Pay as you use the resource - you do not pay for the entire set of equipment at once.
• Simple growth without the need for new contracts.
• As you grow, you can add resources in a matter of days, and if there is just a sharp jump, then 10% of the equipment costs you, and is ready to work right away. This is the buffer that we'll talk about later.
• Whoever doesn’t know - if equipment is being transported from Europe now, then an additional month is often added to the standard, not-so-short delivery period of 6 to 8 weeks due to recent economic events.

Who might be interested?

• The program is really beneficial if the consumption of resources increases over time. When designing a solution for a customer, we focus on a business plan. One of the calculation criteria is the projected growth rate of the customer for four years. As a rule, growth is measured as a percentage. Yes, I forgot to say: the figure may not be space, for example, 15% per year.
• Depending on the source data, you can choose the flexibility of the program: the HP Flexible Capacity Service Basic option is suitable for customers whose capacities predictably increase with time. In this model, it is assumed that the customer will only grow; And HP Flexible Capacity Service Premium is suitable for customers whose capacities can either increase or decrease depending on certain factors.

• Granularity of accounting of computing resources: the number of physical servers; number of virtual machines. In both options, activated, ready-to-use switch ports and used gigabytes of storage space are taken into account.
• Minimal utilization of resources at the customer site is economically feasible on a 75–80% bar. The thing is that there is a certain minimum amount of equipment that must be redeemed monthly.
• The kit includes support and other services that - in theory - you can not purchase when buying or renting iron (but still, big business always takes them).

How is the monthly cost calculated?
The equipment includes a monitoring server that tracks the actual number of “working” days of the servers and the number of gigabytes used by the storage devices during the payment period.

This information is transmitted at regular intervals to HP as an XML report by e-mail, which is a reasonably safe solution for those who are afraid of leaks. The total time the server or virtual machine is multiplied by the daily rate specified in the contract. It also multiplies the number of gigabytes per storage and the number of ports available on the switches. The result is the amount you pay.

Buffer
The most interesting thing in this story is the buffer. The fact is that if you need, for example, 100 servers, then another 10 will be in your buffer. This is your insurance in case of peak loads or a sharp increase (for example, an urgent implementation of a new service or business application). Let me explain in more detail on this chart, how it works:


Look at the chart. Suppose there are 100 servers in your infrastructure. Most of the time you consume the amount of resources between the minimum, 80%, and nominal, and pay for the actual consumed. In July, the failure is visible when part of the power is not used. At this time, you paid not for use, but for the minimum amount set. And in the intervals (from mid-April to mid-May and from late October to early November), note that you went beyond the resources of 100 servers and used part of the buffer resources, that is, 10 more already installed on your site just in this case. If stable consumption of more than 50% of the buffer remains and the capacity needs to be increased, more servers are added to the buffer. HP brings the right equipment to the customer site and installs it.


As you can see, 10% of servers are laid on peaks. What is well suited for retail, a number of banks, powerful game servers and insurance, universities with peaks for exams, but, for example, does not always suit mobile operators. According to the experience of commercial companies in various European countries, such a decision ideally falls on electronic document management systems and SAP, which constantly require more and more resources, and if they are not timely replenished, they frankly slow down. There are very interesting cases for hospitals and the public sector, where data storage requirements are constantly growing.

Solution example

Conditions and assumptions:
• HP Flexible Capacity Service Basic - as I already wrote, there is no reduction in the level of resources used;
• contract for 4 years, renewable;
• used reserve resources become basic;
• threshold for buffer update - use of 50% of reserve resources;
• updating the technology platform every 4 years;
• infrastructure growth by 25% per year;
• prices do not include VAT.

Components
Blades:
• chassis C7000 Enclosure;
• VC Flex Fabric 10GB;
• HP insight control software;
• Bl460c gen8, 512GB, 1x E5-2680 CPU, 2x 300GB SAS HDD blade servers.
Storage:
• 3PAR P7400 4 controllers;
• T1: 2.5 ”450GB SAS drives.
Buffer:
• 4 Bl460c servers;
• 12 TB of disk space.

Comparison of payments over 4 years ($)	Year 1	Year 2	Year 3	Year 4
Purchase
Annual Purchase Payments	1,560,545	198 574	568,554	251,134
Total purchase payments	1,560,545	1,759,120	2,327,675	2,578,818
FCS solution
Annual payments at FCS	349,741	426 683	497 204	577,086
FCS Total Payments	349,741	776 425	1,273,630	1,850,716
Investment analysis	Purchase	FCS	Difference
Total payments for 4 years	2,530,325	2 123 815	406 509	-sixteen%
Net present value of required payments	2,578,818	1,850,716	728 101	-28%

Iron

Under this program can get a fairly wide list of iron. Any hardware and software from HP is supported. You can also discuss equipment from other manufacturers. First of all, equipment, which has no analogues in its lineup of HP.

Details about your project

Naturally, the prices in the examples are priced, and they can change quite strongly depending on the specific use of servers, promotions, discounts, scale of implementation, etc. There are a lot of details about reducing FCS capacity, features for determining buffer size, etc. In general, everything should be discussed in a personal or by mail ATischenko@croc.ru , the devil in the details. In general, I will add that this program appeared in the last wave of the crisis - and at first in not very large data centers. HP was very profitable for development, and for those who used servers, it was a good opportunity to pay as resources were consumed.

Let me remind you that with a contract for 4 years, the term generally corresponds to the life cycle of the purchased servers - you still need to replace them with new ones around this time. The maximum that I saw without an upgrade is 6 years. At the same time, after four years, HP upgrades equipment for free with the same functionality. Naturally, FCS is very, very profitable for real-life systems.