Justify Your DCIM Monitoring Software with Our Simple Tool

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It may be obvious to any IT Operations manager that monitoring software is necessary when you’re tasked with keeping tabs on all the power and cooling infrastructure across your (likely) geographically distributed IT portfolio. The monitoring and alarming functions of data center infrastructure management (DCIM) software provide visibility to all monitored devices so that you have real-time situational awareness of device status, health, and environmental conditions (e.g., temps, humidity levels, seeing who is in the room, etc).

IT Professional DCIM Remote Monitoring

Without this visibility, you either pay to have trained staff at each site or you fly blind and wait for problems to pop up, greatly risking unplanned downtime. Neither option would be feasible or acceptable to most, I’m sure.

But the necessity of DCIM monitoring tools may not be so obvious to purchasing authorities, particularly if you’ve been getting by without it. CFOs and CIOs may expect to see an ROI analysis or understand what the payback period would be. But how do you do this credibly for a software monitoring tool that gives awareness of what’s going on and helps you avoid problems that might happen in the future? In other words, calculating a return on investment is difficult because quantifying the value of software requires estimating future outcomes on how your operations would change once the software is implemented.

A simple framework and value calculator

We believe the best way to handle this challenge is to use our new DCIM monitoring value framework described in White Paper 292, “Calculating ROI of DCIM Monitoring for Distributed IT Sites” and encapsulated in our freely available TradeOffTM Tool, “DCIM Monitoring Value Calculator for Distributed IT”. Our framework will help you quantify the value and justify the investment. The tool offers a more credible prediction by giving you the flexibility to adjust costs and many other assumptions based on your specific inputs. Rather than prescribing the outcome, it provides a means for the user to experiment with “what-if” scenarios.

As shown here, the framework includes three key categories of financial value: 1) a reduction in downtime occurrences (i.e., IT service outage), 2) a reduction in staff and service costs related to power and cooling device management, and 3) a reduction in security and environmental incidents. The paper explains the key factors and variables behind each of the categories in detail.

Three key categories of DCIM financial value

Quantifying the value of the impact of downtime through this simple formula:

DCIM Formula for quantifying the value of the impact of downtime

And quantifying staffing expenses with this formula:

Quantifying DCIM Staffing Expenses

Security and environmental risks

As for reducing the risk of security and environmental risks, our calculator tool defaults to “no impact”. This is because while DCIM can help reduce some of the risk, it does not address all the risks associated with cybersecurity, for example. Also, the cost of a single security or environmental incident can exceed the cost of the DCIM solution by orders of magnitude, making it overwhelmingly dominate in the value calculation.

For example, while a cyber breach for a small business has been reported to cost $108k USD[1], the global average cost for a data breach has been reported to be as high as $4.35 million[2]. Many factors affect what this value would be for a particular site, such as how large the breach is and what data is compromised. As another example, an unnoticed water leak can cause enough damage to quickly exceed the cost of DCIM, more than justifying the entire expense of the solution.

While security and environmental damage generally dominates the calculation, for “what-if” planning, some companies like to include their value, as a way to point out to stakeholders the potential value of the software, as some are not aware of DCIM’s cybersecurity assessment or environmental monitoring functionality[3].  For those that choose to include it, we recommend using your estimated value for a single incident.

DCIM calculator shows results

The tool (example screenshot below) presents results based on your selection of preferred cost model: perpetual license-based DCIM or subscription-based DCIM. Perpetual license involves paying a one-time upfront cost to use the DCIM software in perpetuity, but it also typically involves an annual support cost. The tool defaults to 18% but is user adjustable in the Advanced Inputs. Choosing “perpetual license” will calculate a 5-year cashflow that shows a payback period for the investment. The subscription cost model, on the other hand, involves paying either a monthly or yearly fee to use the software without any added support cost. When a subscription cost model is chosen in the tool, it will calculate a 5-year cash flow that shows an ROI percentage.

DCIM Monitoring Value Calculator for Distributed IT

Try out the calculator today and see how much DCIM Monitoring software can save your organization.

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