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Virtualization Business Case
2007
Company Confidential
The Problem of Virtualization
• 44% of organizations cannot determine if virtualization goals were achieved
• 16.2% of IT projects succeed
• IT history of ‘shanty towns’ among early adopters
• Understand where you’re going
• Understand your metrics
Company Confidential
Drivers for Cost Reduction
Hardware and Related Physical Infrastructure:• Cost of real estate (limited floor space)• Cost of power• Cost of cooling (3x)• Over-provisioning
Software: • Licensing• Patch management• Migrations and upgrades
Management: • 50-70% of TCO • Speed of provisioning (weeks)• DR environment• Fewer staff• Consolidated training needs
Company Confidential4
Using VMware virtual
infrastructure, we can offer
the same levels of service
and more flexibility for up
to 40 percent lower server
and operating costs.
Many firms attribute their
adoption of virtualization to
server consolidation, but an
equivalent number are
using the technology to
make their server
environments more
flexible and agile.Rob Jones, Director of Technology, ALSTOMRob Jones, Director of Technology, ALSTOM
Virtualization Can Help…
1. “Pragmatic Approaches To Server Virtualization,” Forrester, June 2006
1
Company Confidential
State of Infrastructure Today
Server Sprawl
36M physical x86 servers by 20111— a 10x increase in 15 years1
$140B in excess server capacity - a 3-year supply2
Power & Cooling
50c for every $1 spent on servers2
$29 bn in power and cooling industry wide2
Operating Cost
$8 in maintenance for every $1 spent on new infrastructure2
20-30 : 1 server-to-admin ratio3
Space Crunch
$1,000 / sqft2
$2,400 / server2
$40,000 / rack2
1. IDC, U.S. and Worldwide Server Installed Base 2007–2011 Forecast, Doc #207044, May 2007 2. IDC, Virtualization And Multicore Innovations Disrupt The Worldwide Server Market, Doc #206035, March 20073. Source: VMware
Company Confidential
Key Task Traditional ApproachVirtual Infrastructure
Approach
Moving an application to a new server
• 4 - 6 hours for migration• Service interrupted for
duration of maintenance window
• Requires days/weeks of change management preparation
• 2 - 5 minutes for live migration using VMotion™ and DRS™ (no service interruption)
Hardware maintenance
• Requires 1 - 3 hour maintenance window
• Requires days/weeks of change management preparation
• Zero downtime hardware upgrades with VMotion™ and DRS™
Traditional Process vs. Virtual Infrastructure
Company Confidential
Maximizing Return - Metrics
Hardware and Related Physical Infrastructure:• BTU per CPU/second• KW per CPU/second• Cost per square foot
Software: • Cost of non-compliance • Cost of downtime
Management: • Migration – labor hours• Provisioning – labor hours• Headcount per CPU/second• Operations cost per CPU/second • Cost of training / training days
Centralization• Number of managed environments
• Data centers• Closets• MDF/IDF
Company Confidential
Maximizing Return - Metrics
24.002.002.45
INTERNAL RATE OF RETURN (IRR): 49.20%ADJUSTED IRR: 19.66%BENEFIT TO COST RATIO: 2.45 NET PRESENT VALUE (NPV): $145,355
PAYBACK (BREAKEVEN) MONTH (DCF):
PROFITABILITY INDEX:
PAYBACK (BREAKEVEN) YEAR:
“Always relate to workload”
Company Confidential
Maximizing Return - Tools
Platespin PowerRecon
VMWARE Capacity Planner
Eracent EnterpriseAM
IBM Consolidation Discovery and Analysis Tool (CDAT)
Company Confidential
Assessment Methodology
Inventory / Discover:• Physical assets• Intellectual assets• Infrastructure assets• Current cost baseline• Business / mission objectives
Monitor: • Measure key indicators of performance• Behaviors as important as averages, peaks• Use data to narrow options
Model: • ‘What if’ scenarios for both performance and cost• Identify constraints
• Resource allocation• Workload prioritization• Security limitations
Evaluate: • Identify optimal choices• Develop architecture• Develop implementation strategy
Company Confidential
Risks to Successful Implementation
Backups:• Impact on shared disk infrastructure• Complexities of restoring data• Data consistency
Workload Planning: • Accurately measuring current workloads, peaks• Aggressive oversubscription 50-500% versus 10:1 – 50:1• Higher randomization of I/O on disk subsystems• Ongoing monitoring
Security: • Classified systems• Isolation of data access and processing
Human Factors: • Organizational conflict• Ability to downsize• Retraining
Manage• Ensure that management applications can support virtual machines• Ensure that apps measure and trend important performance data
Company Confidential12
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Benefits of Consolidation
• Fewer Servers to Manage
• Less Power required
• Less Space needed
• Less Cabling required
3-Year Cost Savings / Workload
Server Hardware $5,816
Power Costs $759
Cooling Costs $949
Data Center Real Estate
$431
Network Infrastructure
$296
TOTAL $8,251
Company Confidential
Applicationmaintenance
15%
Applicationinnovation45%
Infrastructureinnovation10%
Infrastructuremaintenance
30%
Applicationmaintenance
30%
Applicationinnovation
23%
Infrastructureinnovation
5%
Infrastructuremaintenance
42%
BEFORE AFTER
Source: Fortune 100 Company
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