CASE STUDY - Dell Consolidates European Support System to Achieve 172 Percent ROI in Five Years
One-to-one customer relationships are the hallmark of Dell’s success, coupled with its ability to keep costs low by effectively wielding information technology to manage one of the most effi cient supply chains in the world, fueling incredible growth.
Commentary by Mainstay Partners, an independent technology analyst consultancy
In just 20 years, Dell has risen from a radical idea hatched in Michael Dell’s college dorm room to a $47 billion global enterprise. One-to-one customer relationships are the hallmark of Dell’s success, coupled with its ability to keep costs low by effectively wielding information technology to manage one of the most efficient supply chains in the world, fueling incredible growth.
This fast growth put a strain on the existing infrastructure in Dell’s Europe, Middle-East, and Africa (EMEA) region, which generates nearly one-fourth of Dell’s total annual revenue (U.S.$9.7 billion). Some 1,200 EMEA decision makers rely on Dell’s large-scale internal data repository, called Eurostar.
To keep up with EMEA’s fast growth, Eurostar had expanded to four servers, each running a separate copy of the database. This distributed system required constant data replication to stay in sync. But with surging usage, updates became more difficult. The database often fell out of sync, which had a serious impact on data consistency and quality, and poorly constructed queries could hang the system, resulting in outages.
The last bastion of ‘big iron’ is the database. As a hardware company, we want to run our own product, and Oracle’s 10g Grid Computing environment made that possible with Eurostar.
—Brian Koster, IT Director, Data Management Services, Dell, Inc.
Faced with a fragmented system architecture, Dell’s IT staff addressed performance issues by continually reorganizing tablespaces, provisioning additional storage, and constantly restarting and re-synchronizing databases. This meant it was more difficult than ever for Eurostar’s managers to meet the internal service-level agreements (SLAs) of the 1,200 EMEA users.
Dell decided to replace the fragmented infrastructure with a consolidated system built around Oracle Grid Computing technology running Linux Red Hat Advanced Server. Eurostar’s new system features a cluster of Dell PowerEdge servers running Oracle Database 10g with Real Application Clusters in concert with a high-capacity EMC storage array. The entire system is managed through Oracle Enterprise Manager Grid Control.
Dell successfully consolidated on this new Oracle/Red Hat infrastructure in March 2004, migrating from four separate databases to a single clustered database, and from a complex, siloed computing environment to a more easily managed, single consolidated system. The move to Oracle immediately improved Eurostar’s speed and capacity, laying the foundation for future continued growth.
“What we’ve done is simplify our environment,” says Brian Koster, Dell IT director for data management services. “Part of the reason we save is that we have fewer moving parts, greater flexibility, and more manageability. We’re proving the power of scale-out over scale-up, with a growing terabyte-plus system.”
Mainstay Partners, an independent technology consultancy, has documented a number of performance improvements in the consolidated cluster, ranging from higher system availability and faster data processing to streamlined infrastructure management. Dell’s IT staff now spends less time on troubleshooting and maintenance, and more time on strategic initiatives and delivering better business intelligence. Dell increased productivity with Oracle’s Automatic Storage Management, which simplifies the provisioning and management of storage.
With the new Oracle system, smoother performance is evidenced by a sharp decline—more than 50 percent—in daily trouble tickets; Mainstay estimates that Dell would have had to hire at least one halftime employee to handle these extra issues. IT staff can also perform information loads and roll-ups about two hours faster with the new consolidated grid system—a 25 percent improvement. Mainstay also found that consolidating on Oracle has been a boon for end users, as daily reports are now running faster and are available 50 percent sooner, resulting in greater productivity and faster, better-informed decisions.
Mainstay found that Dell should expect to gain approximately $7.15 million in cumulative benefits over five years. Savings come from a combination of labor productivity savings, cost avoidance, software cost savings/avoidance, and hardware cost savings/avoidance. The project is expected to generate $3.3 million in net benefits over five years, achieving an overall ROI of 172 percent and an internal rate of return of 52 percent. Dell’s investment is expected to pay for itself in 19 months.
For Further Information
Read the entire Dell Eurostar/Oracle Case Study from Mainstay Partners at: www.oracle.com/customers/studies/roi/delleurostar.pdf.