Windows 2000 Rollouts: The Early Cost-Benefit Results (I)

Issue Date: 04/01/2000
Issue Number: 10.11

Like any Microsoft OS, Windows 2000 has been a long time in coming. Has the wait been worth it? As we previously noted (see Computer Finance, December 1999), Microsoft is rolling out the red carpet when it comes to upgrading NT 4 Workstation desktops to Windows 20000 Professional, at a modest $149/seat. Windows 2000 Server, the workgroup edition that is equivalent to NT 4 Server, is only $599 for the NT upgrade (based on 10 client access licenses, or CALs).

But price is merely the opening shot. Microsoft is making steep scalability and reliability claims for its new platform, which ultimately will become available in dozens of editions, from data center down to desktop and embedded. Among the headlines are TPC-C (Transaction Processing Council) benchmarks of 227,000 order transactions per minute on 12, clustered Compaq Proliant servers; and Giga/Sunbelt Software polling results showing Windows 2000 beta testers claiming the new OS as two to ten times more reliable than NT 4.

Microsoft's scalability thrust has ratcheted up the pressure on Novell. With its recent release of Netware Cluster Services 1.01 (for NetWare 5.01), Novell is promising to scale up NetWare clusters from two to 32 nodes, closing a major gap in its product line-up. It will be interesting to see what happens once Microsoft releases the high-end Windows 2000 Data Center Edition later this year.

We've decided to check on how well Microsoft is living up to its promises of scalability and lower cost of ownership for Windows 2000 by speaking with early adopters. Obviously, these being reference sites, the results must be taken with the qualification that early adopters generally gain more favorable pricing and consulting assistance than typical customers, and that we would probably not get public access to their results if they weren't favorable. Nonetheless, by looking at their results in detail, we can gain valuable insights as to the real costs and benefits of Windows 2000.

In the first of a new series, we focus on the Toronto District School Board, a site that has already begun seeing results with Active Directory and server consolidation.

BACKGROUND

The fifth largest school system in North America, the Toronto District School Board serves the entire metropolitan area, thanks to a consolidation over the past year which brought together seven formerly independent school boards, each of which, naturally, had differing computing environments. Among the changes already underway, the system has implemented SAP R/3 financials, a plant and preventive maintenance system; an internally-developed HR package; and a third-party developed student information system (SIS).

By February 29, the system went live with phase one: implementing Windows 2000 Server/Active Directory to simplify the management of 2500 administration staff desktops (which remained on a mix of Windows 95, 98, and NT). The impetus was the impending plan to move the staff from 13 buildings into four new consolidated sites.

"We needed a single environment because of all the changes that were happening," said Brian Morrison, coordinator of systems integration. "To create the mobility for the staff, we needed to harmonize the back end pieces, the network, and the desktops. We felt we could get the most bang for the buck by harmonizing the back end first, and then the network and desktop," added Jey Jeyarajan, senior manager for technical services.
The statistics:

* 300,000 students
* 20,000 teachers
* 5,000 administrators
* 55,000 desktops
* 600 sites
* IT budget: C$75 million ($45 million US)

The consolidated school system operates with an overall budget of C$2 billion (about $1.2 billion US), of which IT accounts for about 3.5% of capital and operating expenditures, which is typical for large enterprises. To place this in perspective, the IT budget is about $45 million for operating expenses and $25 million for capital.

The consolidated school system inherited seven computer centers running everything from IBM and Bull mainframes to Digital VAXes, various UNIXes, NT, Novell, and even OS/2. Not surprisingly, a prime target of consolidation was to reduce the overall size of the IT organization and merge seven data centers into one.

WINDOWS 2000 PROJECT DRIVERS

The school board was an unlikely candidate for a production pilot testing project, according to Steve Thompson, general manager of information technology services. "We were very concerned about being on the bleeding edge," he said. When Dell Consulting Services first proposed Windows 2000 last fall, the school system turned them down.

Nonetheless, Toronto had made the decision to migrate from legacy systems to a Microsoft environment over two and a half years ago. The rationale was that there was already a critical mass of NT expertise among the IT staff, the local talent pool had more NT than UNIX professionals, and that UNIX administrators and programmers would command much higher payscales. Furthermore, the decision to make Microsoft the enterprise computing standard was made with the assumption that NT 5, as it was then called, would be enterprise-scale.

"We would not have made this [long-term] commitment if it was based on NT 4," said Thompson, who added, "We knew it would take us three years to get there [anyway], and we also saw potential TCO opportunities." Significantly, the decision was made prior to last year's consolidation. And, to prepare the way, the system was in the midst of a multi-year network conversion from proprietary systems to ATM backbones and Fast (100 Mbit) Ethernet LANs.

Nonetheless, when the IT group was given marching orders last October to move half of the 5000-person administrative staff from scattered sites totaling 2.5 million square feet to four consolidated sites totaling 350,000 sq. ft., starting February 2000, it had to propel the enterprise migration effort into fast forward. Although only 2500 users were being moved in the first stage of the project, the plan was to set up a domain structure that would eventually support the entire school system. They would get new directory services, but their existing desktop environments and access to network services (e.g., file and print, Microsoft Exchange email, enterprise applications, Internet access, and other services) for the time being wouldn't change. They would also consolidate eight Microsoft Exchange sites (with 15 Exchange servers) into a single site architecture with six servers, a storage area network (SAN), and 10,000 mailboxes.

PROJECT PLAN

Toronto initially planned for NT 4, according to Jeyarajan. It would have required:

* 12 domains to support the 300,000-strong school population, which have required multiple authentication environments.
* Each domain would require two quad-Processor Pentium servers (primary and backup) at $25,000 ($US) apiece, or 24 in all.

The school systems had already engaged Dell Consulting Services to perform general design for the migration; initially, they worked on the NT 4 schema and discussed the idea of Windows 2000. In mid December Dell made a formal joint proposal with Microsoft offering the final release code and final design assistance for Windows 2000. The offer of final release code proved the key; the school district was not going to participate in any beta project.
The decision to go ahead with a pilot was made on December 28, with a month of parallel NT 4/Windows 2000 testing to commence on January 3, and a go/no-go decision date of January 31. Under the plan, the administrative personnel had to be prepared to move by the deadline; however, migrating to Windows 2000 was not cast in stone. If the new OS failed any of the January tests, the school board would implement NT 4 as the fallback option.
An eight-person IT project team was formed, supplemented by a Dell and Microsoft consultant full time during the January testing period. During that period, the servers were subjected to about a couple dozen load and functional tests, such as simulating:

* 11,000 log-ons per second;
* 2,000 batch log-ons per second;
* 30,000 log-ons to Exchange mailboxes in 10 minutes;
* Restoring the operating system from backup tapes;
* Configuring the DHCP server to issue IP addresses to 10,000 desktops;
* Operation of three SAN (storage area network) clusters;
* Loading and overloading the servers at utilization levels from 100% to 130% of capacity over several days; and
* Providing access to services for Microsoft and Macintosh desktops.

TEST RESULTS

"We were concerned at first at the reliability of Windows 2000," said Morrison, who added, "We spent a month hammering this system. I know what NT 4 would have done if we ran the tests against it. We never had one Win 2000 box die on us in the testing, which surprised me."

Windows 2000 was able to handle 11,000 log-ons, vs. 2000 previously on NT 4. The servers never crashed; they were initially run for 14 days straight at typical operating levels. Individual servers were then cranked up to 100% utilization for four days, and then to 110% and 130% for two days. The servers kept operating, with the only evidence of overload being alarm messages in the log files.

The only problem was with the multiple SAN clusters. For now, they are getting by through assigning each workgroup to a specific SAN, rather than providing access to a cluster of multiple SANs until a patch is implemented.

To put the results in perspective, the Toronto IT group was already one of the most competent NT shops around. In their previous NT 4 environment, they had previously had some servers recording up to 41 days of consecutive uptime.

MIGRATING TO PRODUCTION

At the end of January, the decision was made to place Windows 2000 into production. Thirty PC technicians fanned out to 13 sites for the two-week transition. The system would consist of a single master domain operated with a three-server (quad-Pentium) cluster. The plan was to physically move 2500 desktops into the new facilities with no changes made to end user environments. That stipulated that users saw the same screens and continued having access to the same file, print, email, or Internet services.

Under the hood, however, there were changes. For each system, the transition consisted of:

* Implementing new naming standards to eliminate duplicates and inconsistencies when merging multiple, formerly separate domains (in one case, there were over 100 people with the same first and last name whose user IDs had to be made unique);
* Creating one-way access to the legacy environment through the master domain to provide each user with their existing file, print, email, application, and Internet services;
* Changing the pointers on each desktop to direct the log-in to the master domain (a process that averaged about 15 minutes per desktop); and
* Physically moving all home directories for each user group onto the new three-server cluster.

COSTS

The cost of transitioning the administrative staff to the new facilities is shown in Table 1. The capital costs consisted of three primary and backup domain servers, 17 local service servers, and a storage farm. As noted, client hardware refresh was not part of this project, and didn't have to be upgraded because only the server OS was touched. We also included estimates for the remainder of the migration project (see Table 2).

Labor costs included 15 staff months contributed by IT administrator-level personnel for planning, design, and testing of the new Windows 2000 architecture. Additionally, Dell and Microsoft contributed two and three months of consulting, respectively. Once the tests were completed, 30 PC technicians were mobilized for the month of February.

Overall, the initial phase of the project, which included migrating 2500 administrative desktops and building the infrastructure to accommodate the remaining desktop population cost about $1 million (Canadian) or $615,000 (US). It is estimated that the ultimate cost for migrating remaining desktops to the new consolidated Windows 2000 domain will total about $4.1 million (Canadian) and $2.6 million (US), which averages $75 (Canadian) and $47 (US) per desktop.

Admittedly, comparable costs for a more typical commercial Windows 2000 migration project would be higher because Toronto got cost breaks from two areas:

* Educational sector discounts: School systems usually pay less than commercial enterprises.
* Consulting: Dell and Microsoft contributed five months of services free because the project would become an early adopter reference site. At a generic estimate of $2500/day (Canadian) or $1500/day (US), that amounted to a difference of $250,000 (Canadian) or $150,000 (US). Overall, this would impact the cost/desktop by about $5 (Canadian) or $3 (US).

SAVINGS

As a result of migrating to Windows 2000, the system realized significant savings, primarily from server and domain consolidation. Note: We've based our savings estimates on commercial pricing levels; in Toronto's case, actual savings were slightly lower due to discounting for educational institutions.

Cost savings are summarized in Table 3; the major sources came from server consolidation, tools costs, and storage area network (SAN) consolidation.

Servers: A three-server cluster addressing a single master domain under Windows 2000, vs. the need to deploy 24 servers addressing 12 domains for NT 4. The three master domain servers cost $40,000 (Canadian) or $25,000 (US) apiece; at these prices, we estimate that Toronto saved over $800,000 (Canadian) or $500,000 (US).
Note: Regardless of domain structure, Toronto still required 17 servers to provide local file and print services because at that level, the OS was not changed.

Systems Tools: Windows 2000 included more robust systems tools compared to NT 4. According to Morrison, if NT 4 had been used, the school system would have had to purchase third party tools covering:

* Desktop Environment Replication: Microsoft's Intellimirror, which replicates end user desktop images on other machines and automatically installs software on demand;
* Security: Toronto would have required external tools to provide the multiple levels of security and access privileges supported by Windows 2000, and naming services (DHCP and DNS). For a project of this size, we estimate these third-party tools would have cost roughly 1.5 million (Canadian) or $1 million (US).
* Storage: Initially, a single instance was installed, pending resolution of problems getting Windows 2000 to support a three-instance cluster. The investment was $400,000 (Canadian) or $240,000 (US). (Ultimately, the school system estimates it will require 2TB of storage.) With Windows 2000, the system can use a single, consolidated storage subsystem; with NT 4, it would have required separate storage subsystems for each domain. Although we don't have any firm estimates here, Toronto's Jeyarajan believes that with the ability to consolidate network storage this could easily amount to hundreds of thousands of dollars of avoided RAID purchases, while allowing the school system to postpone storage capacity additions until they are necessary. That, in itself, will let the school system ride the downward pricing curve of storage capacity.

Based on these factors, we conservatively estimate that the school system saved roughly $2.5 million (Canadian) or $1.5 million (US). That does not include any costs for storage, which would provide another significant source of savings. Additionally, notes Morrison, Windows 2000 has easier-to-use tools for installing new servers that automate a number of setup functions. However, we haven't included this in our estimates of savings.

The school system expects few problems in converting client desktops to run on the new environment. They previously purchased 9000 new desktops (also from Dell) last summer as part of an ongoing refresh program.
This is obviously the first step of an ambitious plan to migrate the entire system under a single Windows 2000 Active Directory domain. They expect it will take another 10 months (at current pace) to extend coverage of Active Directory out to the remainder of the administrative staff and throughout the hundreds of schools.

Beyond that, changes in group shared environments|which are inevitable given the pace of reorganizations|will have to be done piece by piece, as new organization structures are established and services mixes negotiated with the affected organizations. That would enable them to take advantage of getting nested authentication at the file and print services level.
Additionally, no firm plans have been made regarding client machine upgrades, either to Windows 2000 Professional or Citrix MetaFrame; in these areas, features such as Windows 2000's improved stability and on-the-fly plug and play installation, or the ability to take advantage of thin clients, could reap further savings.

INTERNAL EXPERTISE WAS KEY

Looking back, Toronto's success as an early adopter reflects the fact that the IT group was already highly proficient in NT. In the past, they have gotten NT 4 servers to go as long as 41 days between reboots. (It's too soon in the new project to judge Windows 2000 server uptime levels.) Therefore, the IT group has also been successful with other NT projects such as an SAP financials implementation, which was completed in less than six months for this $2 billion organization.

The goal of taking advantage of Windows 2000's greater scalability to support server consolidation was not surprising for such an early implementation. However, what was unusual was the choice of Active Directory as the initial feature of Windows 2000 to exploit because, arguably, it is the feature that requires the most intensive advance work. For instance, client side features such as on-the-fly plug and play or greater stability are considered easier to attain, and most likely to be the most popular features pursued in most early implementations. However, Toronto wisely kept the scope of the Active Directory project limited to providing a single management environment that would speed the reconnection of moved desktops to their familiar workgroup computing environments.

What was also noteworthy was that such a conservative IT group would take on such a leading edge project. Fortuitously, the IT group had a "time box" methodology that strictly limited project boundaries to prevent scope creep. The fact that it happened was an accident of timing: the Toronto system was undergoing reengineering just as Windows 2000 release code was becoming available, and its consulting partner offered an early adopter deal that was difficult to refuse. "We happened to be at the right place at the right time," said Morrison.

Computer Finance will discuss Meta Groups cost of ownership model for Windows 2000, and will examine other early adopter cases in other reports.

Table 1. Toronto Project Phase 1 Costs (Source: Computer Finance)

ITEM	QUANTITY	$ (CANADIAN)	$ (US)
Project Capital Items	3 primary and backup domain servers	$120,000	$72,000
	17 specialized servers for local services (DHCP, DNS, file storage, print servers)	$255,000	$153,000
	Storage Farm	$400,000	$240,000
	TOTAL	$775,000	$465,000
Staffing	IT administrator: 15 staff months1	$100,000	$62,500
	PC Technician: 30 staff months2	$137,500	$87,500
	Consulting: 5 staff months3	No cost3	No cost3
Project Scope	Move 2500 desktops
	Build server and domain infrastructure to support eventual build of 55,000 desktops
PHASE 1 PROJECT COSTS	TOTAL	$1,012,500	$615,000

Notes: All salary figures are Computer Finance estimates.
1. IT Administrator salary estimated at $80,000 (Canadian) and $50,000 (US)

2. IT Administrator salary estimated at $80,000 (Canadian) and $50,000 (US)

3. Consulting services were provided by Dell and Microsoft for free in this project because of its special status as an early adopter reference site. We estimate the value of consulting was $2500/day (Canadian) and $1500/day (US). If the Toronto school system had to pay for Dell and Microsoft consulting services, we estimated this would have added $250,000 (Canadian) and $150,000 (US) to overall costs.

Table 2. Toronto Project Estimated Overall Costs (Source: Computer Finance).

ITEM	QUANTITY	$ (CANADIAN)	$ (US)
Project Capital Items	TOTAL	$775,000	$465,000
Staffing1	IT administrator: 51 staff months	$340,000	$212,500
	PC Technician: 660 staff months	$3,025,000	$1,925,000
	Consulting: 5 staff months	No cost3	No cost3
Project Scope	Build server and domain infrastructure to support 55,000 desktops
TOTAL PROJECT COSTS	TOTAL	$4,140,000	$2,602,500
COST/DESKTOP2	55,000 desktops serving 300,000 users	$75.27	$47.32

Note:
1. Labor time estimates provided by Toronto District School Board; cost estimates based on Computer Finance estimates of for IT Administrator and PC Technician payscales (see Table 1).

If consulting costs were thrown in, the per desktop cost would change only marginally by $5/desktop (Canadian) and $3/desktop (US).

Table 3. Windows 2000 Savings for Toronto (Source: Computer Finance estimates based on data furnished by Toronto School District).

Item	Description	NT 4 cost1	Windows 2000 cost1	Savings1
Hardware	Server Consolidation	$600,000	$75,000	$525,000
Systems Tools	Desktop replication, security, naming services	$1 million	Bundled with OS	$1 million
Storage	SAN consolidation	NA	NA	NA
TOTAL				$1.55 million

© 2000 ComputerWire Inc