capabilities of a single host, the organization does not need as much database partitioning. This technology willallow the organization to realize a significant cost savings over the life of the servers, especially when consideringthe annual growth in data assets.The model assumes 50 backups per production database, and a $0.04 cost per gigabyte. The average databasebackup for the organization is approximately 3TB, and over a three-year period, the organization will realizesignificant savings as its data assets continue to grow.TABLE 3New Product Cost AvoidanceValueCost avoidance in that a company would not have to invest in another new product, including implementing,integrating, training, support resources, etc. No retraining is needed; BLU is seamlessly integrated into DB2.$150,000Source: Forrester Research, Inc.
11Total BenefitsTable 4 shows the total of all benefits across the three areas listed above, as well as present values (PVs) discounted at10%. These estimates are then risk-adjusted, providing a more conservative estimate for the business case. Over threeyears, the interviewed organization expects risk-adjusted total benefits to be a PV of more than $883,000.TABLE 4Total Benefits (Risk-Adjusted)Year 1Year 2Year 3TotalPresent Value(PV)Performance$163,625$196,350$235,620$595,595$488,048Lower storagecosts$67,500$101,250$151,875$320,625$259,147New product costavoidance$150,000$0$0$150,000$136,364Total$381,125$297,600$387,495$1,066,220$883,558
12COSTSThe impact of cost is accrued in two different areas described below: increasing the investment in IBM and the organization’sinternal preparation and planning costs, which together amount to approximately $247,000. Please note that the interviewedorganization was currently on an IBM enterprise agreement, allowing it to purchase the upgrade within the terms of thepurchase agreement. The cost for other organizations may vary. Customers with a different deployment can take advantageof TB-based pricing available from IBM, potentially reducing investment costs further.›The organization saw the following costs:•Increased investment in software licensing fees.•Increased investment in annual software maintenance.•Cost of implementation.Total CostsTable 5 illustrates the total incremental costs of the IBM platform for the interviewed organization.TABLE 5Total Costs (Risk-Adjusted)Year 1Year 2Year 3TotalPresent Value (PV)Incremental license$165,000$0$0$165,000$150,000Maintenance$0$33,000$33,000$66,000$52,066Implementationand professionalservices$50,000$0$0$50,000$45,455Total$215,000$33,000$33,000$281,000$247,521Source: Forrester Research, Inc.FLEXIBILITYFlexibility, as defined by TEI, represents an investment in additional capacity or capability that could be turned into businessbenefit for some future additional investment. This provides an organization with the “right” or the ability to engage in futureinitiatives but not the obligation to do so. There are multiple scenarios in which a customer might choose to implement IBMDB2 with BLU Acceleration and later realize additional uses and business opportunities. Flexibility would also be quantifiedwhen evaluated as part of a specific project (described in more detail in Appendix A).
13RISKSForrester defines two types of risk associated with this analysis: “implementation risk” and “impact risk.” Implementation risk