Presented at the Electronic
Messaging Association
Solution Summit 98
A Strategy for Buying Directory Servers
Bruce Weiner
Mindcraft, Inc.
170 Knowles Drive, Suite 206
Los Gatos, CA 95032
(408) 364-2860 Fax: (408) 364-2862
www.mindcraft.com
[email protected]
October 26, 1998
Copyright 1998 Mindcraft, Inc.
Mindcraft is a registered trademark of
Mindcraft, Inc.
Contents
Big Picture
 Alternative Solutions
 TOV
 Summary

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Copyright 1998 Mindcraft, Inc.
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Big 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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Copyright 1998 Mindcraft, Inc.
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Alternative Solutions
Magazine Reviews
 Feature Analysis
 Product Price Analysis
 Price/Performance
 Total Cost of Ownership (TCO)
 Total Opportunity Value (TOV)

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Copyright 1998 Mindcraft, Inc.
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Magazine Reviews

Quick way to get
an overview, if the
product you want
was reviewed
October 26, 1998
 Is
the reviewer
competent or
biased?
 Reviewer does
not know how
you will use it
 Benchmarks are
typically weak
technically
Copyright 1998 Mindcraft, Inc.
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Feature 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

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 No
cost analysis
 No value
analysis
 No risk analysis
Copyright 1998 Mindcraft, Inc.
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Product Price Analysis
Learn purchase
price
 Learn support
price and terms
 Learn update price
and terms

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 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/Performance
Better than either
price or
performance alone
 If benchmark
results are based
on it, gives you
configuration
ideas

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 Does
not cover all
costs
 How will it
perform in your
company?
 No value analysis
 No risk analysis
Copyright 1998 Mindcraft, Inc.
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Total Cost of Ownership

Should cover all
acquisition and
ownership costs
 Treats
Hardware, software,
networking, facilities
Personnel,
administration,
support,
maintenance, training
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product as a
sink for $, not a
generator of value
 Minimum feature
analysis
 No performance
analysis
 No value or risk
analysis
Copyright 1998 Mindcraft, Inc.
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Total Opportunity Value Explained
™
What is Total Opportunity Value?
 TOV components
 How to compute TOV
 Using TOV to make purchase
decisions

™
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Copyright 1998 Mindcraft, Inc.
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Total Opportunity Value and TOV are trademarks of Mindcraft, Inc.
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 Components
Financial assumptions
 Total Cost of Ownership
 Value analysis
 Performance analysis
 Risk analysis

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Financial 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 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 (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 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 (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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Copyright 1998 Mindcraft, Inc.
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Performance Analysis

Evaluate performance in the
deployed environment
– Servers
– Networking
– Clients
– Workload
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Measuring 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
(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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Copyright 1998 Mindcraft, Inc.
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Risk 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 (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 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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Copyright 1998 Mindcraft, Inc.
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Total Opportunity Value
Covers all acquisition
and ownership costs
 Covers feature benefits
 Covers performance
 Covers value analysis
 Covers risk analysis
 Fair comparisons with
other investments

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 Not
Copyright 1998 Mindcraft, Inc.
simple to do
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Using 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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Summary
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

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Copyright 1998 Mindcraft, Inc.
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