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October 26, 1998
Copyright 1998 Mindcraft, Inc. Mindcraft is a registered trademark of Mindcraft, Inc.
A Strategy for Buying Directory ServersA Strategy for Buying Directory Servers
Bruce WeinerMindcraft, Inc.170 Knowles Drive, Suite 206Los Gatos, CA 95032(408) 364-2860 Fax: (408) [email protected]
Presented at the Electronic Messaging Association Solution Summit 98
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ContentsContents
Big PictureAlternative SolutionsTOVSummary
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Big PictureBig Picture
Buy the product that will be the most valuable for your company– Cost– Features– Performance– Relation to applications using it– Value it can return
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Alternative SolutionsAlternative Solutions
Magazine ReviewsFeature AnalysisProduct Price AnalysisPrice/PerformanceTotal Cost of Ownership (TCO)Total Opportunity Value (TOV)
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Magazine ReviewsMagazine Reviews
Quick way to get an overview, if the product you want was reviewed
Is the reviewer competent or biased?
Reviewer does not know how you will use it
Benchmarks are typically weak technically
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Feature AnalysisFeature Analysis
Learn what the product can do for you
A feature may give you an idea for a new use
Tells you if the product can meet your minimum requirements
No cost analysis No value
analysis No risk analysis
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Product Price AnalysisProduct Price Analysis
Learn purchase price
Learn support price and terms
Learn update price and terms
Does not cover all costs
Does not cover how many copies you will need
No value analysis
No risk analysis
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Price/PerformancePrice/Performance
Better than either price or performance alone
If benchmark results are based on it, gives you configuration ideas
Does not cover all costs
How will it perform in your company?
No value analysis No risk analysis
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Total Cost of OwnershipTotal Cost of Ownership
Should cover all acquisition and ownership costs Hardware, software,
networking, facilities Personnel,
administration, support, maintenance, training
Treats product as a sink for $, not a generator of value
Minimum feature analysis
No performance analysis
No value or risk analysis
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Total Opportunity ValueTotal Opportunity Value™ Explained Explained
What is Total Opportunity Value?TOV™ componentsHow to compute TOVUsing TOV to make purchase
decisions
Total Opportunity Value and TOV are trademarks of Mindcraft, Inc.
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What is Total Opportunity Value?What is Total Opportunity Value?
A return-on-investment-based financial analysis method– Includes TCO and more– Based on classic financial analysis
methods– Opportunity cost evaluation– Focus on value the product returns,
not just overhead costs
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TOV ComponentsTOV Components
Financial assumptionsTotal Cost of OwnershipValue analysisPerformance analysisRisk analysis
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Financial AssumptionsFinancial Assumptions
Use assumptions consistent with corporate investment assumptions– Analysis period– Cost of capital– Average salaries by position– Average salary increases over analysis
period– Others
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Total Cost of OwnershipTotal Cost of Ownership
All costs to acquire and own a product over the analysis period– Directory server software cost for all
servers and clients– Additional servers and clients cost– Additional networking cost– Hardware and software support cost– Maintenance and upgrade cost
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Total Cost of Ownership Total Cost of Ownership (continued)(continued)
– Cost of additional personnel– Training cost– User support cost– Down-time cost– User productivity cost or benefit– Additional security cost
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Value AnalysisValue Analysis
Look at all values directory server deployment gives
Look at values each feature yields– Increased revenue– Reduced costs– Improved user productivity– Improved reliability
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Value Analysis Value Analysis (continued)(continued)
– Improved security– Better customer relations– Better supplier relations– Reduced cost of developing and
maintaining applications– New applications you can do because
of features (include their TOVs)
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Performance AnalysisPerformance Analysis
Evaluate performance in the deployed environment– Servers– Networking– Clients– Workload
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Measuring Directory PerformanceMeasuring Directory Performance
User simulation– One client system/simulated user
• Record & playback tool - WinRunner
– One system simulates several client• Load generation tool - LoadRunner
– Measurements not in directory terms– Difficult to build simulations for millions
of entries in a directory
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Measuring Directory Performance Measuring Directory Performance (continued)(continued)
Benchmarks– One system simulates many clients
• DirectoryMark– Easy script generation with standard options or
your own– Use your own data– Rigorous run rules– Measurements in directory terms– Lower benchmarking costs– Test millions of entries in a directory
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Risk AnalysisRisk Analysis
Look at everything that can go wrong– Cost of doing nothing– Risk of implementation success– Risk of increased network load– Mean time between failure– Risk of increased down-time cost– Risk of increased maintenance cost
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Risk Analysis Risk Analysis (continued)(continued)
– Risk of personnel cost increases– Risk of user productivity gain or loss– Risk of customer alienation– Risk of supplier alienation– Risk of increased support cost– Risk of increased security cost
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Computing TOVComputing TOV
Total Opportunity Value =
v (valuev * (1 - riskv)) -
c (costc * (1 - riskc))
All values and costs are net present value cash flows using the cost of capital and corporate discount rate for the analysis period.
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Total Opportunity ValueTotal Opportunity Value
Covers all acquisition and ownership costs
Covers feature benefits Covers performance Covers value analysis Covers risk analysis Fair comparisons with
other investments
Not simple to do
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Using TOV to Make DecisionsUsing TOV to Make Decisions
Which directory server should you buy?– The one with the highest TOV
Which investment should your company make?– The one with the highest TOV
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SummarySummary
TOV looks at all aspects of a directory server deployment to determine value
TOV is the fairest way to compare directory servers
Only TOV can fairly compare a directory server investment to other investments
