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Mindcraft is a registered trademark of Mindcraft, Inc. October 26, 1998Copyright 1998 Mindcraft, Inc. A Strategy for Buying Directory Servers Bruce Weiner.

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Presentation on theme: "Mindcraft is a registered trademark of Mindcraft, Inc. October 26, 1998Copyright 1998 Mindcraft, Inc. A Strategy for Buying Directory Servers Bruce Weiner."— Presentation transcript:

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2 Mindcraft is a registered trademark of Mindcraft, Inc. October 26, 1998Copyright 1998 Mindcraft, Inc. 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 bruce@mindcraft.com Presented at the Electronic Messaging Association Solution Summit 98

3 October 26, 1998Copyright 1998 Mindcraft, Inc.2 Contents Big Picture Alternative Solutions TOV Summary

4 October 26, 1998Copyright 1998 Mindcraft, Inc.3 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

5 October 26, 1998Copyright 1998 Mindcraft, Inc.4 Alternative Solutions Magazine Reviews Feature Analysis Product Price Analysis Price/Performance Total Cost of Ownership (TCO) Total Opportunity Value (TOV)

6 October 26, 1998Copyright 1998 Mindcraft, Inc.5 Magazine Reviews  Quick way to get an overview, if the product you want was reviewed Y Is the reviewer competent or biased? Y Reviewer does not know how you will use it Y Benchmarks are typically weak technically

7 October 26, 1998Copyright 1998 Mindcraft, Inc.6 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 Y No cost analysis Y No value analysis Y No risk analysis

8 October 26, 1998Copyright 1998 Mindcraft, Inc.7 Product Price Analysis  Learn purchase price  Learn support price and terms  Learn update price and terms Y Does not cover all costs Y Does not cover how many copies you will need Y No value analysis Y No risk analysis

9 October 26, 1998Copyright 1998 Mindcraft, Inc.8 Price/Performance  Better than either price or performance alone  If benchmark results are based on it, gives you configuration ideas Y Does not cover all costs Y How will it perform in your company? Y No value analysis Y No risk analysis

10 October 26, 1998Copyright 1998 Mindcraft, Inc.9 Total Cost of Ownership  Should cover all acquisition and ownership costs  Hardware, software, networking, facilities  Personnel, administration, support, maintenance, training Y Treats product as a sink for $, not a generator of value Y Minimum feature analysis Y No performance analysis Y No value or risk analysis

11 October 26, 1998Copyright 1998 Mindcraft, Inc.10 Total Opportunity Value Explained Total Opportunity Value ™ Explained What is Total Opportunity Value? TOV ™ components How to compute TOV Using TOV to make purchase decisions Total Opportunity Value and TOV are trademarks of Mindcraft, Inc.

12 October 26, 1998Copyright 1998 Mindcraft, Inc.11 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

13 October 26, 1998Copyright 1998 Mindcraft, Inc.12 TOV Components Financial assumptions Total Cost of Ownership Value analysis Performance analysis Risk analysis

14 October 26, 1998Copyright 1998 Mindcraft, Inc.13 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

15 October 26, 1998Copyright 1998 Mindcraft, Inc.14 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

16 October 26, 1998Copyright 1998 Mindcraft, Inc.15 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

17 October 26, 1998Copyright 1998 Mindcraft, Inc.16 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

18 October 26, 1998Copyright 1998 Mindcraft, Inc.17 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)

19 October 26, 1998Copyright 1998 Mindcraft, Inc.18 Performance Analysis Evaluate performance in the deployed environment –Servers –Networking –Clients –Workload

20 October 26, 1998Copyright 1998 Mindcraft, Inc.19 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

21 October 26, 1998Copyright 1998 Mindcraft, Inc.20 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

22 October 26, 1998Copyright 1998 Mindcraft, Inc.21 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

23 October 26, 1998Copyright 1998 Mindcraft, Inc.22 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

24 October 26, 1998Copyright 1998 Mindcraft, Inc.23 Computing TOV Total Opportunity Value =  v (value v * (1 - risk v )) -  c (cost c * (1 - risk c )) All values and costs are net present value cash flows using the cost of capital and corporate discount rate for the analysis period.

25 October 26, 1998Copyright 1998 Mindcraft, Inc.24 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 Y Not simple to do

26 October 26, 1998Copyright 1998 Mindcraft, Inc.25 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

27 October 26, 1998Copyright 1998 Mindcraft, Inc.26 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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