IDC Smart Tools 2012

IT Advisory Tools Overview
IDC presently benchmarks over $100B worth of IT
hardware, software and services each year
Tools such as SmartIndex and SmartAnalysis are routine Best
Practices for large businesses and government groups
IDC is a trusted source for deal validation and a recognized
benchmarker for hardware and service providers
IDC Tools are currently employed by over 50% of the Global
Fortune 500
IDC benchmarks drive independence and transparency in
vendor management

For the past 13 years, IDC Tools have driven measurable
savings within global sourcing and procurement organizations
© IDC Visit us at IDC.com and follow us on Twitter: @IDC Feb-12

Software
Datacenter
Mainframe
Software System Mgt
Warranty
Audits

IT Services
IT Internal &
Outsourced Services
Datacenter, PC Support,
Hardware Managed
Support, Applications, Rate Cards

Asset Disposition All IT HW
Fair Market Value PC’s & Peripherals
Servers
Lease vs Buy Storage
Financing Networking


4


SmartIndex
 Industry standard benchmark for pricing SmartIndex: an indexing
 Being used by over 50% of Global Fortune 500 tool that helps clients
 Peer-to-peer product comparison that ensure best pricing is
benchmarks pricing on a wide variety of
products achieved throughout the
 Establishes price index for each configuration life of a purchasing
 Discount applied to IDC SmartIndex on contract
periodic basis either monthly, quarterly or
biannually
Allows customers to
establish price assurance
model that benchmarks
pricing to the market

Avoids “honeymoon
period” pricing;
benchmarks best deal
throughout purchasing
contract


SmartIndex Sample
HP ProLiant BL460c G6 Source IDC 01/12/2010
Vendor HP Dell IBM
Model ProLiant BL460c G6 PowerEdge M610 BladeC enter HS22
Part# 507864-B21 ($1,575) $5,434 7870L2U ($2,755)
Processor XeonQC _L5520/2.26GHz (507798-L21 $799) XeonQC _L5520/2.26GHz XeonQC _L5520/2.26GHz
Addl. Processor XeonQC _L5520/2.26GHz (507798-B21 $799) XeonQC _L5520/2.26GHz XeonQC _L5520/2.26GHz (46M0697 $855)
Memory 6x2GB 1333MHz RDIMM (500656-B21 $720) 6x2GB 1333MHz RDIMM 2x2GB 1333MHz RDIMM (6x2GB 44T1486 $500)
DIMMs 12DIMMS 12DIMMS 12DIMMS
Storage 2x300GB 10k 2.5" SAS (492620-B21 $1,038) 2x300GB 10k 2.5" SAS 2x300GB 10k 2.5" 6Gbps SAS (42D0637 $1,038*)
Hard Drive Bays 2 Bays 2 Bays 2 Bays
Hot Swap Drive Bays Yes Yes Yes
Storage C ontroller SA P410i/256MB (462968-B21 $219) PERC 6/I/256MB ServeRAID-MR10ie/256MB (46C 7167 $749)
Battery-backed Write C ache Yes (462969-B21 $139) Yes Yes
Optical Drive No No No
Floppy No No No
Network C ard Dual Port 10/100/1000 Dual Port 10/100/1000 2x10/100/1000
Addl. Network C ard Dual Port 10/100/1000 (453246-B21 $399) Dual Port 10/100/1000 Dual Port 10/100/1000 (73P5101 $249)
Host Bus Adapter 4Gb Fibre C hannel (403619-B21 $749) 4Gb Fibre C hannel ($749) 4Gb Fibre C hannel (46M6065 $749)
Remote Management iLO 2 iDRAC 6 Enterprise (Express -$349) IMM
Warranty 3yrsOS (5yrsOSx6hr UK075E $1,863) 5yrsOS (6hr $1,000) 3yrsOS (5yrsOSx6hr 40Y5987 $1,350**)
HW Installation Service Yes (UE493E $200) No ($200) No ($200)
US Price $8,500 $7,034 $8,445

SmartIndex Price $7,993 US (Average of 3)
*Adj. 6Gbps to 3Gbps/**Adj. 6hr response

Products aligned by market segment; SmartIndex price used
all features/components adjusted to to benchmark pricing
match ongoing

SmartAnalysis

 IDC offers a peer pricing (deal level)
SmartAnalysis: a tool that
analysis of prices paid by peer sized provides a clear benchmark of
buyers for price ranges:
– Average peer
peer best in class pricing and
– Best in class discounting for all IT HW classes
 IDC profiles each buyer and places into
peer categories by
spend, volume, geo, product class, etc. Peer Price Analysis
 Profile is combined with thorough
examination of market conditions to Market
produce recommendations on savings Dynamics
– Expectation setting/goal validation
Competitive
– Get best rates in RFP process before
its too late Analysis
 Custom SmartAnalysis available: Discount reports
– Custom price performance analysis
– Custom savings opportunity analysis Recommendations
– Short-term reviews audits


Smart Fair Market Value (SmartFMV)
SmartFMV: provides a rigorous assessment of current and
forecasted values of in-place technology assets
Ideal for negotiating leases, buyouts, asset transfers or
dispositions
Report can be used as an independent validation of asset
value within outsourcing contracts
IDC tracks secondary pricing (RV and FMV) on a wide range
of technologies:
(sample data) Ja nua ry 2006 FMV
PC/Portables Mode l
Ma ke N umbe r R E T AIL W H OLE S ALE
Servers SILKWORM 2800 2800 $150 Salvage
SILKWORM 3800 3800 $1,300 $250
Storage SILKWORM 3850 3850 $1,950 $500
SILKWORM 3850 3850 $1,950 $500
SUPERSTACK II BASELINE
Network/telecom SWITCH 3C16460 $50 $10
SUPERSTACK 3 BASELINE
Peripherals 10/100 24 PORT SWITCH 3C16465C $300 $75


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Software benchmarking:
Product usage analysis
Deal analysis
Negotiation support for data center software
Coverage: enterprise licensing agreements
for vendors like IBM, Oracle, CA, BMC and SAS

Most SW vendors
Perform compliance
IDC can also provide audits exposing
independent assistance on millions in costs to
formal vendor audits unprepared
customers

Data center optimization is available to IDC finds most organizations over-
right-size software inventory against an subscribe on major software packages
organization’s server environment Optimized pricing/licensing drives huge
savings!
© IDC Visit us at IDC.com and follow us on Twitter: @IDC Feb-12 10

Most data centers can cut their software costs in
half by getting to best in class
Market Share by Vendor
Based on Customer Spend
All Data Centers Best in Class Data Centers
$4233 per mip $915 per mip

2.39%
1.6% 3.2%
15.0% 7.7%
3.2%
IBM
4.9% CA

6.0% 49.9% Compuware
53.3%
BMC
30.2%
ASG
22.7% Other

**Note**
Best in Class represents 3 lowest cost data centers


Are you Best in Class?

IBM ISV
$1,600.00
$1,448.00
$1,400.00 $1,373.00
Unit Cost

$1,171.00
$1,200.00
$987.00
$1,000.00

$800.00 $716.00
$622.00
$600.00

$400.00

$200.00 Client Average Best In Class

$-


Product Pricing Summary
160
151

140

120 116

100
90
Products

80
Industry Average
60 Best in Class
60
49 49
38
40
31

20

0
Total Products Lower Cost Alternatives Lower Cost
Products Alternatives

• IDC offers COMPREHENSIVE service benchmarking to
large public and private sector clients
•Addresses the largest category of IT market spend
• Methodology incorporates elements of IDC‟s Industry
Standard IT Advisory Tools Coverage Areas:
• PC support
 Industry standard methodology
• PC Managed services
 Vendor accepted • Infrastructure
(servers, storage and
 Actionable intelligence and data networking)
• Application development
 Outsourced or Insourced • Application and System
Maintenance
• Helpdesk
© IDC Visit us at IDC.com and follow us on Twitter: @IDC • Professional services 15
Feb-12

• IDC benchmarks address service COST for internal services and
service PRICE for outsourced environments
• IDC commonly supports cost-benefit analysis for decision to
outsource or back-source
• IDC clients routinely drive cost savings by benchmarking deals to best
in class rates
Key Differentiators:

IDC offers a new approach to service benchmarking …
1. IDC adapts projects to each client
2. Self-populating data templates DO NOT require data entry by the
client; client participation time is metered and minimized
3. IDC delivers actionable observations on industry conformance for
large business and key verticals and recommendations on best
practice and cost savings


IDC data can provide key
Best
metrics for determining Strategy Decision
Practices
cost/benefit; whether or not
to outsource or back-source

Informal benchmarking data can inform long-term
supplier strategy – is vendor performing to spec?
Should sourcing get involved?

Target Roles:
IT leadership, Global Sourcing

Customers need support in
aligning new and existing service
agreements to industry practice –
“are we doing this the right way?”;
Best
Strategy
Practices
Decision IDC can draw upon real customer
experience

Clients need to understand the
appropriate service definitions and
service levels for their business
versus industry practice

Target Roles:
IT leadership, IT Shared Service Professionals


When it comes time to exercise a
benchmarking clause, IDC has the
Best
experience and data set to provide Strategy Decision
Practices
enforceable results; IDC has
experience positioning results for
vendors

Recommendations in benchmarking reports will provide
client with a clear idea of the impact of any changes made
to a service supplier relationship & potential savings
generated

Target Roles:
IT leadership, Global sourcing

IDC offers benchmarking for a wide range of IT services…

IDC service SmartAnalysis provides benchmarking for insourced or outsourced
services including: applications, desktops, servers, storage, networking, helpdesk
and more.
Type of Benchmark Description

Cost Benchmark Measures the performance of an in-house organization‟s IT environment
Price Benchmark Measures the performance of an outsourcing arrangement
Simulates the cost to an organization when in-sourcing parts or all of the outsourced environment
Back-sourcing

Value Benchmark Assesses the Value the IT department delivers (or not) to the organization
Assesses the Service Level Agreement (SLA) – is it industry-compliant, are SLAs too tight/too
SLA Assessment
loose/ just right, are SLAs missing, have SLAs been delivered as per contract
Assesses the Contract – is it current, where are weaknesses and potential problem areas, where
Contract Assessment are the contract‟s strengths, how does the contract perform when the environment changes

Assesses the satisfaction of the user community, determines the perceived strengths of IT‟s service
Satisfaction Assessment
delivery, specifically focusing on the Service Desk and the Desktop Support Staff
Assesses whether IT delivers value in terms of its productivity when delivering services in the
Productivity Assessment context of the Client‟s environment, e.g. 1 FTE Supports „n‟ Desktops, 1 FTE Supports „n‟ Wintel
Servers, etc. Can be used to calculate “certain” values in an outsourced environment
Provides an organization with both an in-house as well as an outsourcing assessment; this type of
Integrated Cost/Price Model benchmark is popular when an in-house organization wants to know the price it would have to pay
when outsourcing or vice versa


Smart Tools Coverage
SmartAnalysis SmartIndex SmartFMV
PC‟s & Workstations   
Notebooks & Tablets   
LCD‟s & Printers   
Enterprise Storage
(SAN, NAS, tape)
 
Servers (blade, rack,
midrange & enterprise)
  
Networking (switches,
hubs, routers, VOIP)
 

Mainframes  
Data Center SW 
Outsourced Services
(desktop, infrastructu
re, datacenter, applic 
ations)


Vendor Coverage
Hardware Vendors IT Services Vendors
Software Vendors
IBM IBM
IBM
HP HP
Servers CA
Sun Oracle ACS

Dell BMC
CSC

HP CA Accenture

Hitachi Compuware Unisys
Managed Services &
EMC HCL
Storage Mainframe SAS Outsourcing
NetApp Patni
ASG
IBM Atos
Information Builders
Sun Oracle Fujitsu

HP Sterling Commerce
NCS

Dell Software AG TCS
PC‟s & Portables
Lenovo Serena OTHERS

Toshiba HP
IBM
Cisco IBM
CA Maintenance
HP EMC
BMC
Networking Arista Sun Oracle

f5 Oracle
IBM

Juniper SAS Dell
Distributed
HP Vmware TCS

Dell Accenture
Microsoft
Lenovo CSC
EMC
Peripherals Lexmark Professional Services HP
HP
Xerox Fujitsu

Samsung Veritas/Symantec
Unisys

NEC Telstra

HP

OTHERS


Call to Action – We would like to:
 Learn about your initiatives and help you measure savings based
upon our data and peer benchmarking services
 Discuss any other activities or services that may be valuable

 Have you add us to your bidder list for IT, Industry and custom
research needs.

Contact Information:
 Beth Jolles, Director, bjolles@idc.com 508-904-2198

 Christopher Murphy, Program Director
cmurphy@idc.com, 508-935-4134


24


Oracle Enterprise Unit Cost ($/CU)
$2,500.00

$2,000.00

$1,500.00

Unit Cost ($/UC)
$1,000.00

$500.00

$-
Customer Average Optimal
Implementation Implementation Implementation

Dollar per contact
Helpdesk performance $200

relative to the $150

$100
efficiency (cost) with $50

which services are $0
XYZ Peer Group (In-house) Peer Group (Outsourced)

delivered $130 $119 $154

Help/service desk Currently in-house

x* contacts per year @ x# days per week

x contacts per day @ x agents

x contacts per hour per agent @ Industry Av. of 9 mins total
contact time = 23 mins per hour

Is this competitive? Dependencies are SLAs, call
profile, SOW, environment, contact
time

* Data taken from RFP-194 # Estimated by HP


The figure on the left shows
the Mainframe‟s (CPU)
financial performance in
regard to the Efficiency
(Price) with which services
are delivered.

Company X

Assumption:
Service delivery in a shared environment will take place on a processor that is shared with
several other environments (LPARs), thereby enabling the Vendor to achieve a superior
“Economy of Scale”. Note, that no organization is able to access another organization’s LPAR(s).
Observations:
Services delivered in a shared environment is about 38% less expensive than in the current XXX
environment
27
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 27 Feb-12

Case Study: United States Postal Service
Background: The US Postal Service has
been an IDC Tools client for over four
years. In that time it has enhanced its
vendor management process by employing
independent benchmarking data to obtain
market pricing on IT hardware.
Process: IDC provides ongoing price indexing on a wide array of
commodity technology from notebooks to x86 servers. IDC also
provides spot-deal analysis on enterprise technology such as
midrange servers, mainframes and storage.
Results: IDC is a trusted source of best in class pricing on
enterprise deals; annual savings are significant.
“IDC's price benchmarking tools have become a
valuable part of our ongoing strategic sourcing
practice”
United States Postal Service


Background: client exercised a benchmarking clause which
required a third party to review key rates and service levels for
managed PC and peripheral environment within carrier‟s
distributed fleet of airport locations

Process: client auditioned several benchmarking partners but
unanimously chose IDC for its experience, streamlined process and
transparency in dealing with the service provider
Project Results: benchmark observed challenges with productivity and
complexity and recommended changes that would reduce FTE‟s, drive
annual savings of up to $650,000 and improve service levels
Outcome: service provider accepted and is acting upon all of IDC‟s
recommendations


IDC Smart Tools 2012

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