Funding it vs. Paying for it...
I have recently had 6 discussions in the past two weeks with companies on how to get a Virtualization project funded, which is a relatively simple discussion to have. It basically involves us working with our ROI model to come up with real cost savings on quantifiable (hard) costs. Based on that the projects are either funded or not and we help roll out infrastructure (on premise or a third party site), licensing, etc. – the usual project lifecycle stuff.
Where clients fall down in on how to get business units and departments to pay for what they use. I have dubbed it the Chargeback Conundrum.
The issue is that when an enterprise wants to execute an Enterprise License Agreement (an ELA) for the Virtualization software (VMWare) there are no simple controls or visibility into what businesses consume and how to charge them back. From the business perspective, they are reluctant to go all in to help pay for it when there is no proof of what they are getting or understanding of what they will be charged, and arguably more important – no trust with the IT organization.
In other words –
Business Executive: How do I know that I am not giving a piece of my budget to another group?
IT Executive: (insert explanation here).
Business Executive: OK, prove it.
IT Executive: (insert deer in the headlights look on face here)
If you need help – reach out – inquiries@virtualizationstuff.com
We can give you unprecedented visibility as product or a service so if you don’t want the cap ex on your balance sheet we can accommodate.
The services offering for Virtualization is also preferred when you want to pay for the functionality vs. be responsible for it.
You’ll need to work with your facilities folks to look at power consumption. While you can shrink the footprint, the power per cabinet jumps from 4KW to 7KW (almost doubles), and you’ll want to have the specialized floor tiles with variable speed fans, the temperature sensors on the front and back of the cabinets with the blades in them, and have it tied together in a management console.
If it sounds too cumbersome – reach out. We’re great at cutting to the chase…
inquiries@virtualizationstuff.com
Showing posts with label ROI. Show all posts
Showing posts with label ROI. Show all posts
Thursday, May 15, 2008
Thursday, January 3, 2008
Actual ROI of Virtualization
As I look ahead to 2008 and pay attention to what my customers are asking me about and what we are discussing, One of the top 2 things is virtualization which ties into the bigger picture of Infrastructure Management. The other is reducing the cost of Email management.
The top reasons companies are talking about it are:
1. Cost savings
2. It is considered green
3. It is a way to create space in a full data center
The cost savings moved the discussions along from ‘What is this virtualization thing everyone is talking about’ to ‘How do we build a plan to virtualize parts of our infrastructure?’. I will say that in my personal experience, the impacts were pretty dramatic in a data center move I was a part of. Here are the numbers:
Overall Consolidation ratio: 20:1
1,000 Wintel boxes into 50 Sun Blades running VMWare
8,000 square feet to ~200 Square feet
Cooling is 1/10 of what it was
Power is 1/10 of what it was
For a couple of large accounts that I work with, I will take you through the back of the napkin math we did on a whiteboard to quantify the ROI of Virtualization:
100,000 physical Wintel servers collapse into 5,000 Sun Blades
Power is reduced to 1/10
Cooling is reduced to 1/10
Floor space in two data centers 10:1 reduction in footprint
The assumptions were that the costs (they are leased machines) were a wash on the hardware:
• The Wintel boxes draw was 230 Watts at 50% Utilization so 23,000 KW per month
• @ $0.35/KW multiplied by 730 Hours in a month comes out to ~$6M per month on power costs to run machines and cool them.
• Did not include facilities costs
Virtualization costs:
• 5,000 blades draw 3900kw*730*.35= $900,000/mo (6 to 1 reduction)
• Add in costs of VMWare - $5,000 per instance * 5000 = $25M
• 5 month payback w/license inclusion
Are there dependencies? Yes, and in the next entry, I will explore some of the dependencies, which are negligible IMHO.
The top reasons companies are talking about it are:
1. Cost savings
2. It is considered green
3. It is a way to create space in a full data center
The cost savings moved the discussions along from ‘What is this virtualization thing everyone is talking about’ to ‘How do we build a plan to virtualize parts of our infrastructure?’. I will say that in my personal experience, the impacts were pretty dramatic in a data center move I was a part of. Here are the numbers:
Overall Consolidation ratio: 20:1
1,000 Wintel boxes into 50 Sun Blades running VMWare
8,000 square feet to ~200 Square feet
Cooling is 1/10 of what it was
Power is 1/10 of what it was
For a couple of large accounts that I work with, I will take you through the back of the napkin math we did on a whiteboard to quantify the ROI of Virtualization:
100,000 physical Wintel servers collapse into 5,000 Sun Blades
Power is reduced to 1/10
Cooling is reduced to 1/10
Floor space in two data centers 10:1 reduction in footprint
The assumptions were that the costs (they are leased machines) were a wash on the hardware:
• The Wintel boxes draw was 230 Watts at 50% Utilization so 23,000 KW per month
• @ $0.35/KW multiplied by 730 Hours in a month comes out to ~$6M per month on power costs to run machines and cool them.
• Did not include facilities costs
Virtualization costs:
• 5,000 blades draw 3900kw*730*.35= $900,000/mo (6 to 1 reduction)
• Add in costs of VMWare - $5,000 per instance * 5000 = $25M
• 5 month payback w/license inclusion
Are there dependencies? Yes, and in the next entry, I will explore some of the dependencies, which are negligible IMHO.
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