How to cut server software license costs
Use fewer licenses by maximizing CPU cores with DRAM and SSDs
There are likely two big problems with your IT budget. One: it’s not growing fast enough to keep up with exploding data growth, which is increasingly software-driven. And two: a large portion of your budget is essentially walled-off for “fixed” software license costs. In the era of software-defined everything, we’ve found this portion of the budget to increasingly consume more funds each year – but it doesn’t have to. By fully utilizing the CPU cores you license, you can use fewer licenses across your deployment and save tens of thousands of dollars in the process. Here’s how and why it works.
Why reducing software licenses is a proven way to maximize your IT budget
According to Gartner’s 2018 worldwide IT spend forecast, enterprise software spend is projected to grow 7% versus an overall IT growth rate of just 2.6%.1 For many IT departments, enterprise software spend is the fastest-growing line item on the budget, which makes containing license costs more important than ever before. Fortunately, this is easy to do because software licenses are attached to CPU cores, which are fed by memory and storage. The more performance you get out of each processing core, the fewer licenses you need, the lower your costs will be, and the more performance you’ll get out of the apps you’re licensing.
Here are some of the most common enterprise applications used in almost every industry, plus a rundown of license costs, how they’re priced, whether they’re memory and storage dependent, and how you can save.
Assumptions: 12 cores per CPU socket, 2 sockets per physical server (every core licensed). The number of CPU cores and sockets in your servers may differ, so your projected costs will differ. We based our assumptions on the Dell® PowerEdge® R730xd server because of its popularity, performance, and upgradeability.
How we came up with these numbers: All license costs/pricing methodologies taken directly from each software company’s website on 5 May 2017 for the purposes of a conceptual comparison. While the price you pay may be lower than the MSRP, these prices serve as approximations. Since Microsoft Windows Server 2016 licenses are sold in packs of 16 cores, we divided the MSRP per pack ($6,155) by 16 to arrive at a per-core approximation. Also, since Microsoft SQL Server licenses are sold in packs of 2 cores, we divided the pack cost ($14,256) by 2 to arrive at a per-core approximation. Oracle Database Enterprise Edition was priced using the standard 0.5 Oracle core processor licensing factor found in the most recent edition of the Oracle Processor Core Factor Table (updated 13 April 2017) for Intel E5-2650 v4 processors. We then multiplied the core licensing factor by the price listed in the most recent Oracle Technology Global Price List on 31 March 2017 (support costs not included). VMWare vSphere price included the production (full) support plan for the default 1-year term, but no additional features. Red Hat subscription prices based on premium support version with the following features: smart management, high availability, resilient storage, and extended update support. All prices based on MSRPs in US dollars, which were converted to local currency using the closing currency exchange rate on 9 May 2017.
How to virtualize enterprise applications and beat the core cost game
The core-based licensing model that Microsoft, Oracle, and others have adopted for enterprise software allows you to create an unlimited number of VMs on each CPU core you’re licensing, which is great, but you have to take advantage of it. If you don’t create as many VMs as possible, your money doesn’t go as far. However, in order to create more VMs, you need more memory, as each VM draws upon the same pool of available memory, plus the virtualization software itself needs RAM to run. On top of that, the apps you’re likely virtualizing are memory-dependent, meaning they revolve around active data that lives in memory.
Effective virtualization also requires fast storage because virtualized apps often run out of memory, which triggers disk thrash. Since SSDs deliver significantly faster performance than hard drives, they allow you to maintain optimal performance even when you run out of memory. Enterprise SSDs also allow you to access, load, and save things almost instantly so you get the most out of your software spend. If you’re going to dedicate hundreds of thousands to software every year, you might as well get fast performance out of each and every app.
The cost of software licenses vs. the hardware that powers them
Since all cores running an app have to be licensed, the best way to save is to fully utilize each and every CPU core. If you only use your licensed CPU cores 50% of the time, you’re significantly overpaying for your software (unless the low CPU utilization is driven by your workload, which would make it expected and OK). However, if your bottleneck is hardware – the case for most IT departments – then there’s an easy way to save. Just fully utilize your cores because they’re what you’re paying for. And a lot of the time, CPU cores are left idling, waiting to get data from memory and storage.
The best way to ensure your CPUs run 24/7 is to fuel them with more RAM and fast I/O by swapping out existing hard drives for enterprise SSDs. For business-critical applications like Oracle Database and Microsoft SQL Server, swap out existing SAS hard drives for SAS SSDs. And in newer servers that’ll take drives with the NVMe™ interface, install those instead. Either way, both RAM and SSDs are a fraction of the cost of licensing a single server – here’s how it breaks down.
How we came up with these numbers: Using the same basic assumptions noted above, we fully upgraded the memory and storage in a Dell® PowerEdge® R730xd server because of its popularity, performance, and upgradeability (2 CPUs with 12 cores each, 24 DIMM slots, 24 storage bays). As of 5 May 2017, the MSRP of a Crucial® 32GB 2400 MT/s DDR4 RDIMM was $395.99, which we multiplied by 24 to simulate a fully populated memory configuration. For SSDs, we took the $1,116.99 MSRP of the 960GB Micron® S630DC 2.5-inch TCG-enabled SAS SSD and multiplied it by 24 to simulate an all-flash storage configuration designed for these types of enterprise applications. While prices often vary, the ratio between software and hardware costs typically doesn’t change much. All prices based on MSRPs in US dollars, which were converted to local currency using the closing currency exchange rate on 9 May 2017.
4 key takeaways
- A joint DRAM and SSD upgrade is less than 7% the cost of licensing an Oracle Database server3
- An SSD upgrade is less than 16% the cost of licensing a SQL server; a DRAM upgrade <6%3
- You can likely cut several different licenses when you make your hardware more efficient
- You can’t afford to underutilize CPU performance
The long-term implications of a hardware vs. software investment
When you look at hardware versus software costs, it’s important to remember that licenses hit your budget every year as an operating expense, whereas a hardware upgrade is a one-time, multi-year investment that benefits you for the life of the drive or module.
The bottom line: a hardware upgrade pays for itself
Software licenses aren’t optional, but they don’t have to be treated as fixed costs. By investing a fraction of your budget into more memory and enterprise SSDs to fuel the applications you’re licensing, you can immediately start saving and improve performance. Spend a little now to save a lot every year through increased CPU utilization – and fewer recurring licenses.