Virtualization Consolidation Cost Savings Calculator

Info-Tech Research Group has established that savings through lower, one-time and ongoing server acquisition costs is the business case for server virtualization (see Figure 1). Past studies have found that these costs can be mitigated by 40 to 75 Info-Tech has also suggested a rule of thumb calculation of a 3:1 consolidation ratio for a break-even point between the cos with standalone hardware versus a virtual machine partition of a physical server (see Figure 2). However, consolidation sav on factors such as OS and virtualization licensing costs. Of particular impact will be the consolidation ratio: the number of v be hosted per physical machine. Use this calculator to get a broad sense of the consolidation savings of a virtual server deployment over provisioning servers with individual instances of server hardware. Alternatively, utilize the tool to compare total costs for using one virtualizaiton solution over another. The numbers currently in the spreadsheet are based on a basic example scenario a modest consolidation project for 16 physical servers that need to be replaced. This involves purchasing four servers and VMwares vSphere Essentials Plus Kit for High Availability and Business Continuity, as well as Windows Server 2008 R2 Data Center Edition for licensing virtual machine instances per processor. The basic equation for this calculation is hardware cost plus OS and virtualization licensing costs divided by the number of virtual instances. All of these costs are variable. Enter your own cost estimates based on situation. For example, the project might be using Microsoft Hyper-V for virtualization or it could be using a different VMware option such as the free ESXi hypervisor. In general, virtualization licensing fees are for management, so in the case of Hyper-V include the per server cost of Virtual Machine Manager 2008.

Figure 1. Business Case Value of Various Virtualization

Business Case Valu e

1. Reduction in one -time and on-going hardware acquisition costs

2. Reduction in hardw are -related maintenance costs
3. DR/BC enabled by removing need for homogeneous hardware
4. Efficienc y benefits from increased m anageability

Figure 2. Rule of Thumb Calculation for 3:1 Conso

Instructions: 1. In the data entry spreadsheet (Tab 2) enter your cost estimates for a single server. In our example we have used a two processor server with 256 GB of RAM. Anything less than a dual processor server is unlikely today. 2. Enter a server OS license cost. If a range of OS types and licenses are being deployed such as various flavors of Windows and Linux employ an average of total OS costs divided by number of systems required.

$9000 $1800 0 $6000 $1200 0 $3000 -$6000

Cost of new Server $3-6K

Cost of Virt Software $3-6K

Cost of new Server $3-6K Cost of Virt Host Hardware $6-12K

Cost of new Server $3-6K

Acquiring New Servers

Virtualizing

3. For Table 2, enter the hardware cost of the virtualization platform (physical server) as well as the licensing costs virtualization. We use Windows Server 2008 R2 Enterprise Edition, which allows four server instances per server. Note als virtualization should include the management layer (if there is one), not just the hypervisor which is essentially free in most licensing is on a per processor basis (e.g. Windows Server 2008 R2 DataCenter Edition is licensed per processor).

3. For Table 2, enter the hardware cost of the virtualization platform (physical server) as well as the licensing costs virtualization. We use Windows Server 2008 R2 Enterprise Edition, which allows four server instances per server. Note als virtualization should include the management layer (if there is one), not just the hypervisor which is essentially free in most licensing is on a per processor basis (e.g. Windows Server 2008 R2 DataCenter Edition is licensed per processor).

4. Enter the number of VMs that will be hosted per physical machines (enter zero for non-virtual machines). Over m bound to be an uneven distribution of VMs based on different roles and application loads. Take the average of total VMs di physical servers. 5. Enter the number of physical servers supporting the virtual server instances.

6. On Tab 3, the results page, there will be figures for total costs and total savings for the virtual environment over each server is physical. There is also a comparison of the cost per VM with the cost of a physical server.

Info-Tech Research Group tools and template documents are provided for the free and unrestricted use of subscribers to In Group services. These documents are intended to supply general information only, not specific professional or personal ad intended to be used as a substitute for any kind of professional advice. Use this document either in whole or in part as a ba document creation. To customize this document with corporate marks and titles, simply replace the Info-Tech Information in Footer fields of this document.

ulator

ng server acquisition costs is the strongest argument in a osts can be mitigated by 40 to 75% through consolidation. reak-even point between the cost of provisioning a server e 2). However, consolidation savings will vary depending solidation ratio: the number of virtual machines (VMs) to

Value of Various Virtualization Benefits

ss Case Valu e

ime and on-going hardware isition costs

dw are -relate d maintenance c osts

40% - 75% 25% - 50%

Monthly Recurring Savings Acquisition Cost Savings

led by removing need eneous hardware

cienc y benefits m increase d anageability

umb Calculation for 3:1 Consolidation

t of new erver 3-6K

Cost of Virt Software $3-6K

t of new erver 3-6K Cost of Virt H ost Hardware $6-12K

t of new erver 3-6K

uiring Servers

Virtualizing

as well as the licensing costs for OS and er instances per server. Note also that licensing costs for which is essentially free in most cases. Also note where icensed per processor).

non-virtual machines). Over multiple machines there is Take the average of total VMs divided by number of

r the virtual environment over an environment where physical server.

estricted use of subscribers to Info-Tech Research cific professional or personal advice, and are not either in whole or in part as a basis and guide for lace the Info-Tech Information in the Header and

Cost Savings per Virtual Machine

Scenario 1
Table 1:Baseline (Non-virtualized) Server Costs Two Processor Server 256 GB of RAM Server OS Virtualization Licensing Total Expected Consolidation Ratio Total Number of Physical Servers Total Machine Instances $5,000 $726 (Windows 2008 R2 Standard) $0 $5,726 0 VMs per Physical Machine 18 18

Scenario 2
Table 2:Virtualized Server Costs Two Processor Server 256 GB of RAM Server OS Virtualization Licensing Subtotal Expected Consolidation Ratio Total Number of Physical Servers Total Machine Instances $6,000 $14,430 (Windows 2008 R2 Data Center) $3,495 $23,925 6 VMs per Physical Machine 3 18

Notes: The expected consolidation ratio can be either the expected number of actual VMs or the estimated total nu VMs possible by capacity. If you use the expected number of servers that are being virtualized right now, the will be a cost per actual VM. If you use the estimated total number of VMs that can comfortably be run on the hardware, you will get a cost per VM plus a number of unused VMs. For example, you could have 15 actual V running and capacity for 30 on the three machines. So by entering 10 you get a cost per VM including 15 un VMs. That means there is capacity to add 15 more VMs at no additional cost.

R2 Standard)

ical Machine

R2 Data Center)

ical Machine

VMs or the estimated total number of eing virtualized right now, the result can comfortably be run on the e, you could have 15 actual VMs cost per VM including 15 unused

Cost Savings Per Virtual Machine

Cost of Baseline Server Cost of Virtualized Server Total Costs: Baseline Server Costs Virtualized Server Costs Cost Differential/Savings $5,726 $3,988

$103,068 $71,775 $31,293

$7,000 $6,000 $5,000 $4,000 $3,988 $5,726

Notes Changing the values in the data entry page will automatically change the results on this page. For example, a higher consolidation ratio will lower the cost per VM and increase the total cost of unvirtualized infrastructure. Use this variability to model the costs and savings of different hardware and software choices.

$3,000 $2,000 $1,000 $0 Cost of Baseline Server Cost of Virtualized Server

$3,988

Cost of Virtualized Server