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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.

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