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Hardware Today: Meeting the Demand for On Demand

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Why buy a CPU when you can rent one? Plenty of enterprise customers, it seems, are finding value in that logic. And many vendors, including Sun, HP, IBM, and Unisys, have brought products to market with a variety of pay-as-you-go arrangements for temporary CPU usage.

On-demand CPU schemes are all the rage. What do customers think of some new-to-market price schemes?

“We have a contractual agreement to receive and deliver data for customers, so we have to have capacity available to meet the peaks,” says Mike Chester, senior manager of database administration at American Healthways, a disease management firm based in Nashville, Tenn. “Rather than having over capacity, we use on-demand CPUs to meet delivery demand and then turn it back down when traffic returns to normal.”

To meet this need, American Healthways purchased two servers with HP Instant Capacity (iCAP) capabilities — an Integrity Superdome and an 8-processor Integrity RX7620.

The Superdome has three partitions: one for the Claim Utilization and Pharmacy system (CUPS), one for a data warehouse, and the other for testing.

CUPS uses 12 1.5-GHz Itanium 2 processors and has four additional iCAP processors on standby. The data warehouse has eight active processors and four iCAPs on hand. The testing group has four processors, which CUPS also uses on an as-needed basis. During weekly backups, for example, the company moves processors from testing to CUPS and transfers them back when the backup is complete.

“It is more economically feasible to buy this capacity than build-in over-capacity. It works out at about 80 percent cheaper per processor.” — Mike Chester, senior manager of database administration, American Healthways

The capability to move processors around is particularly attractive to Chester. This means he can mix and match processors without touching the iCAP chips. When demand soars, however, he can turn to standby CPUs.

“It is more economically feasible to buy this capacity than build-in over-capacity,” he says. “It works out at about 80 percent cheaper per processor.

American Healthways paid HP a license fee of 20 percent of the normal price for its iCAP processors. HP sells time in 30-day increments with the meter running only when the CPU is in use. The company initially bought 240 days. According to Chester, 30 days works out to be less than 5 percent of the total cost.

“This includes all the licenses for HP system software and support,” says Chester. “Every year that you use iCAP, you are saving money, as you don’t have to pay support and maintenance costs to have more hardware on the floor.”

To turn the chips on, customers call or e-mail HP to obtain an access code, log on to the HP instant capacity portal, register, and then receive a user name and password. It takes about 15 minutes to register and get a password. From there, it is another 10 seconds to bring a chip into play. The next version of this program will come with five free temp days for proof of concept and disaster recovery testing. That means an organization can use it before registering. Further, if a regular processor is lost, an iCAP replacement automatically activates at no charge.

Other vendors have similar “pay-per-view” pricing models. Sun Microsystems has deployed such a model but with a twist. With the Sun Grid Utility, enterprises buy processor time on machines that reside elsewhere — no equipment purchase is necessary. No need to even buy a server with additional standby capacity &&151 simply buy the compute power and use it at you leisure.

According to Aisling MacRunnels, senior director of utility computing at Sun, the pricing is $1 per CPU Hour.

“If you use 100 CPUs for one hour, or one CPU for 100 hours, the price would be the same: $100,” says MacRunnels. “If you turn on the CPU, for any length of time, you will incur a charge for it, and payment is collected in advance.”

>> Rent to Own

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