7.1.3 Sweet spot summary

The solidDB product family can improve application performance in several ways:

By removing the need for synchronous disk I/O for both data access and logging

By removing the need for network or local TCP/IP data access

By bringing the data into application main memory space for efficient access, using optimized algorithms and data structures

7.2Return on investment (ROI) considerations

In many cases, the database performance can be directly tied with the revenue generated; the ability to serve more business requests is commonly connected with positive financial consequences of the volume growth. The profit can be increased if the additional transactional volume is at a lower relative cost.

The solidDB product family is well suited for such business growth scenarios because additional software and hardware costs associated with implementing the solidDB accelerating solution are lower than the costs of scaling the traditional database systems.

Moreover, shortening the response times can be easily tied with the organization’s ability to meet various service level agreements, and to gain competitive advantage and increase customer satisfaction. Examples could be the need to validate a mobile phone subscriber and establish the connection in under a few seconds, or the ability to quickly browse a travel company’s inventory based on an online request coming from a search engine.

The following sections provide examples that illustrate how financial gains can be achieved with solidDB product family solutions. The examples are based on a number of assumptions; as much as several assumptions might need to be modified to fit a particular real-life business case and thus individual results may vary, the logic we use to qualify and quantify the ROI is generally applicable.

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The example calculations are based on the following common assumptions:

The setup with the application running against the enterprise database server is profitable. We estimate the revenue of such a solution at twice the cost of the system. This estimate is conservative because most successful IT companies derive revenue many times larger than the cost of production. Larger revenue to IT cost ratio would increase the calculated solidDB ROI.

Business revenue increases with overall application throughput but the returns for each additional transaction are diminishing. This assumption enforces the essential law of economics stating the marginal returns are always diminishing. Thus, revenue earned per transaction is smaller for solidDB and solidDB Universal Cache solutions because the number of processed transactions increases significantly. Total overall revenue of the solution still increases; a mathematical model is used to predict revenue growth with increased transactional throughput.

Individual transaction response times have no direct impact on revenue.

The ROI is calculated as the ratio of revenue increase to the cost increase.

7.2.1solidDB Universal Cache stimulates business growth

In this example, we detail the potential solidDB Universal Cache ROI with the following scenario:

solidDB Universal Cache is added to the system without modifying the hardware setup, hence there is no change in any of the HW costs.

A $150,000 (U.S. dollars, or USD) in application porting costs is added to Universal Cache fixed cost to cover the development work needed to modify the existing application so that it runs against the Universal Cache and the necessary educational expenses; this equals roughly two person-years of skilled labor.

Software costs are based on the current processor value pricing for the solidDB product family, the current processor value pricing of IBM enterprise disk-based databases, and a standard 20% support renewal charge. A 50% price discount is included.

Overall costs and revenue are calculated for a three-year period, and all amounts are in thousands of USD.

A workload that simulates an online retails store order entry system is used (see 7.4.5, “Retail” on page 248). Note that a different workload would result in different Universal Cache relative throughput improvements and thus in a different ROI of the overall solution.

226 IBM solidDB: Delivering Data with Extreme Speed

The evaluation is done for two setups, one using commodity hardware and the other using enterprise hardware. The overall solution cost is heavily dependent on the choice between these two.

Case 1: Commodity hardware

The commodity hardware system consists of two IBM xSeries® servers (Xeon E5345 at 2.33 GHz on two chips, eight cores in total. One server is used for the standard disk-based database; the other server is used for remote database clients in the disk-based database stand-alone case, and for the solidDB cache in the Universal Cache case.

Hardware costs are often difficult to estimate because they include fixed cost of procurement amortized over a number of years, and ongoing cost of maintenance, power, cooling, floor space, and so on. Therefore, we are making a simple assumption that the cost of hardware equals the cost of software.

Table 7-1 lists the cost and revenue details for the ROI calculation of the commodity hardware case. The results are summarized in Table 7-2. In the table, K indicates thousand US dollars, and TPS indicates transactions per second.

Table 7-1 Estimated cost and revenue, commodity hardware case

Item	Data server	solidDB Cache
Fixed cost (HW, SW)	128 K	310 K
Operational cost (HW, SW)	96 K	120 K
Throughput	100 TPS	350 TPS
Cost per transaction	2.24 K	1.23 K

Table 7-2 solidDB Universal Cache ROI summary, commodity hardware case

Solution net earnings / ROI	43 K / 121%
Original revenue	448 K
New revenue	697 K
Added cost	206 K
Payback period	29.1 months
Revenue increased	1.6 times
Transaction cost decrease	45%

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Case 2: Enterprise hardware

The enterprise hardware system consists of one IBM pSeries® server (P 750 MaxCore mode, 4 chips, 32 cores in total) and four IBM xSeries servers (Xeon E5345 at 2.33 GHz on two chips, eight cores in total. The pSeries server is used for the standard disk-based database. The xSeries servers are used for remote database clients in the disk-based database stand-alone case, and for the solidDB cache in the Universal Cache case.

The hardware costs are much more substantial for enterprise-level servers running in UNIX environments, therefore, we are making a simple assumption that the cost of hardware equals two times the cost of software.

The performance improvement brought by the solidDB Universal Cache is estimated to be about 100%, which is a conservative estimate given the results measured on commodity hardware.

Table 7-3 lists the cost and revenue details for the ROI calculation of the enterprise hardware case. The results are summarized in Table 7-4.

Table 7-3 Estimated cost and revenue, enterprise hardware case

Item	Data server	solidDB Cache
Fixed cost (HW, SW)	1536 K	1814 K
Operational cost (HW, SW)	1152 K	1248 K
Throughput	750 TPS	1490 TPS
Cost per transaction	3.58 K	2.06 K

Table 7-4 solidDB Universal Cache ROI summary, enterprise hardware case

Solution net earnings / ROI	1402 K / 475%
Original revenue	5376 K
New revenue	7152 K
Added cost	374 K
Payback period	6.0 months
Revenue increased	1.3 times
Transaction cost decrease	43%

228 IBM solidDB: Delivering Data with Extreme Speed