You could be paying less for software licensing

How Siteco slashed total cost of ownership (TCO) by seven digits with an IBM Db2 Database

By | 3 minute read | May 28, 2021

High licensing and maintenance fees

Gartner, Inc. defines the TCO for enterprise software as the total cost an organization incurs to use and maintain software technology over time. To calculate TCO, companies consider direct costs, such as hardware, software and administration, and indirect costs, including human resources, project management and downtime. But there’s one key cost that is often overlooked or underestimated: ongoing licensing and maintenance fees.

Why does licensing get neglected? Perhaps it’s because some vendors have made their licensing requirements and fee structures so complex that they’re hard to understand. Maybe it’s related to license term lengths: after three or four years, fees are not as top of mind as they were at purchase time. Or, sadly, perhaps it’s because people are simply used to the pain of paying high licensing fees and have accepted them as the cost of doing business.

It’s time to stop the pain.

Take a stand against high fees

Consider the case of Siteco GmbH, a lighting solutions and technology innovator that’s been illuminating the streets, cities, industries and stadiums of Germany and beyond for 150 years. Until recently, it was part of a much larger organization, a global technology company. Both organizations relied on Oracle database technology to support their SAP applications and capitalized on the size of their enterprise to negotiate licensing fees with Oracle.

But that changed in 2018 when Siteco was sold to Stern Stewart Capital. Siteco moved its IT to a data center environment. It also lost some of the benefits of being part of a large organization, such as enhanced negotiating power with Oracle to reduce its licensing and maintenance fees.

For Siteco to succeed independently and paying high Oracle licensing and maintenance fees wasn’t an option. The company sought a way out.

Seeing the light and reaping ROI

Siteco adopted an IBM Db2 Database in early 2020. ROI started on Day 1.

Db2 contributed to a 7-digit reduction in TCO and sped ROI in several ways. For starters, Db2 gave Siteco some breathing room and flexibility when it came to licensing. Consider this: Oracle bases its licensing fees on the number of processor cores a customer uses. If customers want to improve performance, they have to add more cores, so performance can come at a hefty price.

By contrast, Db2 offers subcapacity licensing in a virtualized environment. For instance, if you have a 100-core server but Db2 uses just one core, you only pay for that one core, not all 100. With Oracle, unless you pin a virtual machine to a specific number of cores in a 28-core server, for example, you can be charged a license fee for all 28 cores.

Using Db2, Siteco reduced its number of cores by 50%. How? With better compression. The company had already compressed its Oracle databases, but Db2 compressed them even more. Db2 uses deep compression technology to minimize storage space and improve database performance. Ultimately, the company reduced storage by 54%, which, in turn, reduced backup and storage costs.

And speaking of performance, Siteco runs its SAP batch jobs 27% faster and its web services jobs 30% faster than before.

With Db2, there are no hardware limitations, so you’re free to build additional systems without additional cost. You can deploy the systems wherever you want, be it on premises, cloud or mixed environments. You also have the option of containerizing the Db2 workloads and taking advantage of IBM Cloud Pak for Data by using the Db2 extension for IBM Cloud Pak for Data. With IBM Db2 on IBM Cloud Pak for Data, you benefit from a fully integrated data and AI platform that modernizes the data management.

Outstanding results are contagious

The cost savings, performance gains and ROI realized by Siteco haven’t gone unnoticed — Other executives are now exploring Db2 too. Who can blame them?

Read about how Db2 Database is slashing TCO and boosting performance for other companies, such as Owens-Illinois, Inc. and Audi AG.

What can Db2 Database do for your business? To find out, book a consultation or talk to an IBM representative or IBM Business Partner. You can also read an analyst’s in-depth cost/benefit comparison between Db2 and Oracle.