Digital: Boning Up on TCO
How do you deploy a new enterprise messaging system and save money?

Digital Equipment Corp. believes it has the answer. Two years ago, it began unifying its 55,000-user messaging network around Microsoft's Exchange. Today, the company estimates that it handles 50 million messages per month at a 35 percent cost savings over what it paid in 1995ıa hard-number savings that doesn't include productivity advances.

Dan Martin, director of individual computing productivity for Digital Information Systems, says Digital accomplished this feat by closely scrutinizing total cost of ownership. He's also convinced that businesses that neglect TCO leave themselves vulnerable to "bad business decisions."

A significant part of Digital's overall savings came in fairly easy-to-swallow administrative reductions. Digital used the deployment to examine how it runs its many mail systems. What it found were 700 people attending to mail across the globe. For many administrators, the job was sandwiched between other responsibilities.

The staff survey was part of an overall activities-based costing analysis conducted by Digital in advance of the rolloutıand it made Digital think hard about how it wanted to run its next-generation system. One of Digital's first decisions called for greater centralization of servers and their administrators. Digital also decided to make server administration a full-time job. With centralization, Digital halved the number of full-time administrators and pared part-time workers by an even larger percentage.

Still, centralization wasn't easy; in some locations, it proved impossible. In Europe, for example, where regulation keeps telecom costs high, it made more sense to keep messaging traffic local and off the expensive WAN. Similarly, Digital opted for more distributed architectures in parts of the world where transmission is unreliable or bandwidth speeds are limited.

Ultimately, Digital eliminated about half the servers on its old network, with a total mail and messaging server deployment today of about 200ıeach server dedicated to a single task, such as mail or public folders. Today, only about 35 percent of all these servers still function in a decentralized context as franchise servers operated by individual groups (ranging in size from 80 to 2,500 users). Digital expects this percentage to decrease over time. In fact, Martin is counting on reducing messaging charges to Digital's business units by 10 percent to 15 percent annually as more servers are consolidated and as certain interim servers (made necessary by initial information store limitations with Exchange) are decommissioned.

Martin believes Digital also saved money by deploying three standard server configurationsısupporting 1,500, 1,000 and 500 users. The largest configuration runs on Alpha 4100s, and the medium and small servers run on Intels. One-third of these servers are slated for replacement every year. The largest server loads exceed standard industry practice, with Microsoft pointing to an industry average of about 1,000 at centralized sites and several industry analysts suggesting that loads of 400 to 700 are most common. The industry average across all sitesınot just centralized locationsıis more like 200 to 240.

While extreme server loading can risk downtime problems, Digital finds that its largest servers don't experience any more downtime than other servers, although they do take longer to re-establish once down. This factor is balanced out by additional staffing at centralized locations, says Martin.

Downtime for the network, however, has been noteworthy, but no worse than Digital was experiencing prior to the consolidation. Over the past 30 months, Digital has experienced unplanned outages roughly every two months, lasting an average of 16 hours. Digital executives, however, report steady improvement as Exchange matures beyond the beta software first deployed and as administrators gain experience.

The one area in which Digital underestimated costs was hardware. Digital expected Microsoft to remedy Exchange's 16-gigabit disk limitation prior to last fall's shipment of Exchange 5.5. Because this did not occur, Digital was forced to deploy about 25 capacity servers to those units with enough political clout to demand the extra capacity. Martin also found that Digital needed many more "contingency servers" than originally thought. These servers restore inadvertently deleted mail, deal with gateway issues and act as temporary servers during reconfigurations.

Because messaging is so integral to Digital's business mission, Digital has not restricted the size of mailboxes as part of its deployment. It has, however, established a surcharge on mailboxes exceeding 50 megabytes. That puts the onus on more qualified individual business units to assess whether the charge is justified.

Similarly, Digital deferred other messaging cost-justification issues to individual business units. For example, individual business units conducted their own return on investment analyses to determine if dumb terminals should be replaced with desktops and if older desktops should be upgraded to meet the 32-bit client requirement established companywide with the rollout. Digital discovered, for example, that about 30 percent of its European workforce was still using cell character terminals.

Individual units also decided whether to migrate older mailboxes and address lists to the new system or start clean. IT simply provided the appropriate tools.

Today, Digital relies on an NT and messaging helpdesk staff of 19 in the Americas, with more in Europe (to accommodate multiple languages).

Overall, says Martin, Digital is pleased that it cut costs, but he emphasizes that cutting costs wasn't the controlling factor in Digital's migration. The most important factor was easing administration through integration with existing desktop and server applications. Digital conducted an NT rollout simultaneously with Exchange. Digital also wants the cost advantages that come with access to the many applications being bundled with NT. For example, Digital tried out a certificate system from Entrust, but is actually deploying an early release of the X.509 certificate functionality that will be available in Microsoft NT.

Martin says Digital rejected Netscape in 1995 because it wasn't seen as enterprise-ready. He says Notes was rejected because Digital is an e-mail organization moving toward collaboration and Notes was seen as a collaboration product moving toward e-mail. Digital's then-emerging alliance with Microsoft might also have entered the picture. Martin just says, "Luckily, we made the right decision."

No one will dispute thatıespecially given Compaq Computer Corp.'s proposed acquisition of Digital, scheduled to be final by month's end. Martin believes the mail consolidation inherent in the acquisition will create an industry leviathan, an 85,000-client system. Fortunately, both companies already use the same messaging system.