Cost of Labor as Our Reference

Today one of the largest corporate cost expense position is human labor cost, especially in technology and information services sector, where knowledge workers use electronic information and computers daily.

Fast access to corporate databases and relevant database information is of paramount importance for overall business productivity. Contrary to the myth that it is often difficult to estimate ROI for specific IT solutions, for ROI estimates we can analyze several rather typical use cases which can be improved with the use of Clusterpoint DBMS software.  Labor cost can be used as a reference cost here.

According to the Bureau of Labor Statistics, US Department of Labor, employer costs for employee compensation averaged $30.07 per hour worked in March 2011.  Wages and salaries averaged $20.91 per hour worked and accounted for 69.6 percent of these costs, while benefits averaged $9.15 and accounted for the remaining 30.4 percent. Total employer compensation costs for private industry workers averaged $28.10 per hour worked in March 2011. Total employer compensation costs for State and local government workers averaged $40.54 per hour worked in March 2011.  This is the latest official data showing the cost of employee per hour to a business organization.  You can read the full report here in PDF format.

We can safely use an average figure: $20.91 per hour worked (benefits excluded) to determine cost savings what Clusterpoint Server as your organization core database platform can deliver:

 

Calculate Database Search ROI

Assuming a 100-employee company as our sample use case, cost-effectiveness can be achieved by substantially improving data access speed when querying Clusterpoint DBMS hosted databases.  By reduction of search query response times for a production database only by one second per query, compared to legacy SQL database search, the heavily used corporate database system can yield the sizable productivity savings:

This calculation illustrates very conservative use case.  There are often many seconds and even minutes lost in unproductive waiting when querying some heavy-duty legacy database applications built around SQL technology.  We have customers who solved with Clusterpoint software their real use case problems where typical corporate SQL search took 20 and more seconds, reducing that search time to 0,2 seconds for exactly the same database and exactly the same results grouping and ordering.

Similar measurement can be performed in each specific customer situation, with mutual benefits for both parties.  Side by side search performance comparison can quickly show if Clusterpoint’s database software is a good investment.  Usually our customers know their database usage statistics and can easily do similar performance gains calculation for their own data management environment. 

Calculate Information Ranking ROI

The next use case probably shows the most important customer productivity gain which can also be measured if Clusterpoint software is used (Clusterpoint API returns search response time back to customer application).  When using Clusterpoint’s flexible and customizable Information Ranking mechanism, assigning data relevancy and rates to the database index and creating highly optimized for meaningful search experience Clusterpoint Index, customer web applications can be improved with high quality relevant search: instantly returning the most relevant data from the database on the very first results page with just a simple Internet-style ad hoc queries.  By comparison SQL systems deliver flat-results sets, where users need to navigate (browse) through many pages until they get the results they were looking for.  Let's assume that our corporate sample database needs to perform 10,000 search queries daily.  Assuming that it takes about 5 seconds on average per page for a user to navigate multi-page results page by page (performing extra search requests in Web apps for each next page, then previewing the page content), and conservatively estimating, that Clusterpoint’s novel Information Ranking system effectively reduces number of navigation transactions in proportion 3:1, and estimating number of multi-page database search transactions (long lists) produced at about 50% from all user search queries, the total number of multi-page results (5000) can then be reduced at least by half with Clusterpoint ranked search, leaving just a single result page which will satisfy users in 2500 queries.  Based on those assumptions we can make an educated ROI estimate:

 

Calculate Overall Customer ROI

For the Clusterpoint DBMS software licensing cost reference we are providing some basic ball-park figures for minimum and maximum expenses, typical for corporate customers, who are going to use Clusterpoint DBMS in production environment.  Here are approximate expenses how much it would cost for you to license the Clusterpoint software:

You need to add to those expense figures Clusterpoint DBMS database introduction costs, covering download and installation of Clusterpoint DBMS software, creation of a sample Clusterpoint XML database and making modifications into existing web application software that works with SQL.  It can take maybe a couple of days at maximum by a single developer to do this Clusterpoint DBMS setup.  We have customers who started to use Clusterpoint DBMS with their own databases the same day after our 2-hour introductory training.  Let's assume that altogether time spent on Clusterpoint DBMS setup and integration is 2-3 days by a single person.  Please note that this ROI calculation is made on assumption, that you are not building a new web application from ground-zero, solely based on Clusterpoint platform.  Instead you focus on solving search performance, scalability and relevance problems of existing SQL applications, just by modifying in few places your application source code, to access and search your database information through Clusterpoint XML database search results objects, instead of using SQL cursors with search results.  As there is a built-in XML object parsing functionality in nearly all existing programming languages, there is no need to change even your existing HTML and CSS formatting to integrate your application with Clusterpoint database.  You can reuse element web formatting and styling freely to provide the same look-and-feel for your search results from Clusterpoint database as if being shown to end-user from the old SQL server.  Please read more technical details about this integration method in Clusterpoint API.

Based on reference figures presented above, one can see that investment into Clusterpoint’s database technology for a 100-employee company with knowledge-workers, even if multiple-server cluster licenses are purchased for running very large databases or running multiple different databases in a cluster, quickly pays for itself during the first 6-12 months:

One can see that the money saved over 12-months period is fully covering even Clusterpoint DBMS Site license cost. 

Please note, that ROI for only 2-server Clusterpoint DBMS Cluster License in the first year is nearly 900% (!), which shows that significant productivity increase can be achieved also among smaller SME companies with less number of employees, calculated over the same 12-months period.  Evan if you add recommended minimum of our optional premium technical support services for a 2-server license (add $3250 annually, please see Clusterpoint DBMS Cluster License pricing), your ROI savings are around 500%.

Productivity savings calculated in saved money terms increase proportionally also for Clusterpoint DBMS Site license (unlimited number of servers in a cluster running a database) if number of employees is even greater, for example, in large organizations having thousands of knowledge workers and having a daily used support database with millions of data objects.   In large customer accounts, the cost of Clusterpoint DBMS Site License for data storage can pay back in 2-3 months time after implementation of Clusterpoint's DBMS.

Please note that all of the above examples are theoretical ROI calculations, based on some educated assumptions and some officially published reference figures about labor cost.

Please note that every customer use case is unique.  We believe that you as our potential customer know better your corporate database usage characteristics, functionality requirements and performance statistics.  If you have exact knowledge about those business parameters, you can do similar calculations for potential Clusterpoint ROI by yourself. 

ROI from Database Design Simplicity

Database design and management simplicity is probably another very important factor to take into account when estimating Clusterpoint DBMS resulting ROI and TCO values.  However, this productivity area is very difficult to estimate upfront with exact money equivalents in dollars or in any other currency.  It depends on many factors, which can yield the productivity increase over the life-cycle of a particular database and its applications.  Clusterpoint DBMS delivers substantially shorter software development times cutting time-to-market for new customer products and services.  Database design eliminates multi-table complexity of legacy SQL systems and requires proportionally more simple software.  It has easier cluster-wide database management requiring less efforts from DBAs. 

 We can not define specific figures here in money terms as savings are in every particular customer use case very different.

From our customer experience we can tell, that taking a typical SQL-based database management system, which has been in operations during last 5-10 years, probably with some 20-30 tables and many hundreds of columnar fields, all related indexes and application software to manage that setup, complexity of database management infrastructure and software when migrated to Clusterpoint database infrastructure as main database storage can be decreased at least 3 times.  

We have a customer who replaced 150-plus SQL tables with about 500 of fields and tens of index-based relationships in legacy database with just a single Clusterpoint XML storage, accommodating them all. This our customer has built a complete turn-key Internet information service on top of that single Clusterpoint data storage in record-breaking time, with no SQL used at all.  Please see Use Cases / Firmas.lv

Generally for estimating ROI from database design simplification, translating into less database application software development time and less database administration efforts, you can place a safe bet on approximate 50% reduction of time and resources when Clusterpoint DBMS is your primary data storage, compared to legacy SQL database application programming and management efforts and costs.  

However, to achieve this productivity you should carefully plan to completely replace SQL server system with a Clusterpoint Server and develop application software only for Clusterpoint NoSQL data storage platform, using the principles described above.  Otherwise, if you are running two architecturally different systems in parallel, you can just increase overall system costs.   Parallel use of two architecturally different systems may be suitable for transition period, but should be considered as temporary solution.

Please also note that your application may still require using in some parts SQL database software, but it then could be of some lightweight functionality and used most likely for some statistical or reporting purposes.  All kind of calculations and statistics gathering naturally better fit that purpose when done in Excel-type table-structures and using SQL power of mathematic algorithms specially designed for set theory and effectively working with table environment.  That's what SQL was primarily designed for in the 70ies of the last century.

Retiring Old Enterprise Search Software

For customers who are using commercial enterprise search software to solve search performance and quality problems of legacy SQL databases, and do so in integrated way, we can recommend to consider replacement for this aging IT software infrastructure with a single-platform Clusterpoint DBMS.

By taking this "leap of faith", the calculation of ROI gains can be a straightforward exercise, with a potential of eliminating legacy enterprise search software licensing, integration and annual software maintenance costs from your budget positions.  In Clusterpoint DBMS enterprise search functionalities integrated into the core of Clusterpoint Server data retrieval mechanisms , including plain full-text search, with results snippets, stemming, auto-complete, faceted search, proximity search, geo-location search and flexible customizable relevancy ranking.

Please see more details in section Advantages / Integrated Enterprise Search. 

By retiring old enterprise search and SQL data storage with scalable Clusterpoint NoSQL database, our customers can approximately reduce total cost of their entire data management system ownership at least by 50%. 

Search Experience Brings Revenue

It is more difficult to estimate ROI for end-user services like Internet database services, however, if you are running highly trafficked Web site, with millions of search queries monthly, low sub-second response times for each search query quickly translates into higher end-user satisfaction with your fast and responsive Internet service, out competing businesses that do not pay enough attention to this important usability factor.  

You will simply have more customers and more revenue compared to your competitors.

Main Productivity Gains

With Clusterpoint DBMS we target database management problem areas which often make routine tasks unproductive:

• slow search or indexing performance of large databases, which rapidly gets worse when databases grow fast;
• complexity of database design in legacy SQL systems, delaying time-to-market for new products and services;
• complexity of application software working with inflexibly structured and indexed SQL databases; requiring extended software development times, sophisticated at technical level design specifications for application software functionality (classic Waterfall-model), integration with performance optimization tools such as enterprise search software, often painstaking efforts at database migration to new incrementally expanded structure to accommodate new software functionality or new data, objective need to prevent frequent application software upgrades to keep data structure changes to minimum for large or mission-critical databases, often losing competitiveness in business etc.;
• proprietary vendor specific database data formats, making difficult cross-platform integration;
• inability to quickly search and find relevant data Internet-style, querying with any known free text keywords in legacy databases; users are accustomed to search Internet-style and expect fast and relevant results up-front from their corporate databases too;
• rapidly growing customer data volumes to be stored and managed, slowing down any database performance; escalating hardware costs and demanding expensive high-end database software licensing costs when the problem is addressed by scaling-up vs scaling out an existing database platform, for example, by using very powerful high-end disk-arrays, high-end 'mainframe' capacity servers with tens of processors, or similar type of "behemoth" IT infrastructure elements;
• growing number of users and transactions, slowing down all servers (web, application, database), requiring from time to time completely re-engineer all your database and application software partitioning logic, in essence doubling or tripling human and money resources needed for such restructuring; that could be saved if the core database platform would be generically scalable for customer software applications from the ground-zero.

With Clusterpoint Server you can increase business productivity delivering efficient software solution to address those problems at database platform level.

With Clusterpoint's unique customizable Information Ranking mechanism you can substantially improve productivity of your employees, your customers and your users.  You can start building easily searchable, instantly responsive database applications, or improve existing ones, providing ranked by your own relevancy rules search results, delivering them at sub-second speed.  This can radically improve usability of your databases, eliminate most delays and waiting times, caused by slow search or reporting, and contribute to your user and employee overall work quality.

Here are our approximate ball-park figures for productivity improvement potential, based on a number of our customers experience with Clusterpoint projects.  They are showing how much Clusterpoint DBMS database software platform could improve your organization business productivity and productivity of your customers, compared to legacy relational database technologies:

Simplification of database design, software development and systems management:
     Eliminate multiple database tables, indexes, relations, normalizations and related application software complexity.

Guaranteed sub-second search query times (incl. full text search),  for your customers and employees:

     Radically increase your database ad hoc querying performance (Internet-style), crucial for modern web IT model.

Total cost of ownership (TCO) improvements:
     Cut your database management efforts and shorten application development time saving human resources.

In particular, if you decide to migrate your database storage from legacy SQL system to Clusterpoint DBMS database server platform, you can precisely measure your expected ROI in money terms, if calculated for your own performance characteristics in database search functionality area.  This performance gain can be easily and exactly measured for any application use case and expressed into money terms as return on Clusterpoint DBMS investment, following above example use cases.

Welcome to Ask for ROI Estimate

If you are interested to be assisted to learn how large ROI Clusterpoint DBMS software can provide for your specific use case and for your particular databases, you are welcome to contact us on Clusterpoint Customer Support.