The State of Corporate IT: A case for Linux

One Tale of NT's Journey Into Corporate America

To help make this evolution more understandable, we will use an example based upon the experiences of a corporation with a presence in Washington State. This company currently employs some 7,000 people at its primary site and had made the transition from a combination of Unix/Novell software to Windows NT. The move was cost justified based upon the ease of administration and a reduced cost of ownership, but years into the transition, administration and licensing costs soared and they were faced with some harsh realities, particularly when the market took a downturn and belt tightening became a necessity.

Initially, the company was approached by Microsoft and pitched on the idea of moving over to the NT Server platform. As any good company would do, Microsoft gave them a very hard sell and did an excellent job of convincing them of the potential benefits. One of the biggest parts of the pitch was the generous support that MS pledged to provide to corporate clients, and that support was perhaps the turning point in the decision to make the change. Direct support from IBM, Sun and Novell was becoming more expensive, even as it became harder to obtain. The company worked on a fresh agreement with Microsoft and took the plunge.

Originally, the licensing agreement called for a $20 per seat annual fee for each client that would be accessing NT servers. Originally, two NT multiprocessor NT servers were put in place, each hosting Mail, Internet, File and Print requests. Costs for each server were based upon the number of clients accessing those servers at any one time. Since the company had their employees in separate shifts, only one half of their total employees would be capable of using those servers at any given time. After an initial analysis, it was determined that at no time did the number of concurrent users exceed 2,000. The drafted licensing agreement called for 2,000 concurrent licenses at $20 per annum, for a total of $40,000.

Over the next few years, as the transition from the old server software to the new became complete, changes to the licensing and service agreements were introduced. Uptime over those first years was not nearly as much as the service agreement had called for, and the cost to the company was becoming severe. When time came to renew the service agreement, the company sought more assurances and tighter uptime requirements. In response, Microsoft cited increasing demand on the servers and indicated that in order to ensure proper service and support, each server would have to be limited to one of three primary functions: Internet/Mail, File Serving and Print Serving. NT 4.0 performed best when each of those tasks was handled by a dedicated server and system integrity could only be guaranteed if the functions were separate.

In addition, the case was made that with the split of responsibility to multiple servers, the number of concurrent users could not be accurately determined and that it would be necessary to pay licensing fees for all of the clients that might use those servers. Employment at the company had increased by some 1,000 workers and network usage had increased along with it. When all was said and done, the company was asked to expand from two to six servers and to pay client access fees for a full 5,000 users on each of the three primary servers.

Under this proposal, annual licensing fees would increase from $40,000 to $300,000, but uptime performance would be guaranteed at a specific rate and there would be rebates should those rates not be met on a consistent basis. The company had invested over a million dollars to make the switch from the old to the new, and at this point, going back was not a viable option. Reluctantly the agreement was made and they moved forward.

The next couple of years saw a dramatic increase in data storage requirements and internet use as employment rose to nearly 7,000. The server redundancy helped ensure a higher level of uptime, but maintenance costs were going up as the internal IT team spent more hours working on the extra units that did go down, prepping them to go back up again. As redundant servers went in and out of service, data synchronization was becoming more critical and ensuring data integrity became an even costlier proposition.

During further licensing negotiations, Microsoft proposed that the company transition away from other suites and applications to Microsoft Office. In exchange for this move and the earlier commitment to the NT server line, Microsoft would give them a significant break on site licensing for these applications. They would even aid in transitioning their data warehouse from Oracle to SQL Server. At the time, the company took them up on the Office licensing bundle but skipped on the Oracle conversion. They would ride the market with the infrastructure they now had and do some long term evaluations before making any further commitments to expanded licensing agreements.