Transcript The Virtualization Market: Today and Tomorrow

VMware Virtualization:
The Right Investment For a
Tough Economy
VMware
June 2009
Agenda
Economic Environment in 2009
Why VMware is a Strategic Investment
Additional Cost Savings with vSphere 4.0
Proven Customer Success
The Rough Road Ahead….
A global economic recession is
forecasted for 2009
The economic environment is a
leading indicator of tech spending
71% of CIOs anticipate flat or
decreasing IT spending budgets
IT budgets in developed countries
set to decline by 12% in 2009 and
9% globally
“Our IT spending indices
dipped further to new lows
in our latest survey, deep
in contraction territory.”
- Goldman Sachs
Source: Goldman Sachs IT Spending Survey, March 9th, 2009
Source: IMF World Economic Outlook Report, Nov 6th 2008
The IT Dilemma
I am supposed to do
the same job, but
with less budget and
headcount?!?
Agenda
Economic Environment in 2009
Why VMware is a Strategic Investment
Additional Cost Savings with vSphere 4.0
Proven Customer Success
Recent CIO Surveys Agree: Virtualization is the
Top CIO Priority in a Tough Economic Environment
“The current
environment has
moved virtualization
toward the top of the
priority list for CIOs.”
Source: Merrill Lynch CIO Survey, Oct 28th, 2008
Source: Goldman Sachs IT Spending Survey, Nov 2nd, 2008
“Total cost of ownership (TCO)
reductions will be a key driver of
the acceleration in server
virtualization deployments as
CIOs are forced to cut capital
spending and reign in
management, administrative and
power/ cooling costs.”
Customers Are Still Moving Ahead with
Virtualization in 2009
CIOs expect to double the percentage of servers virtualized in 2009
Source: Goldman Sachs IT Spending Survey, Nov 2nd, 2008
VMware Continues to be the #1 Software
Investment for CIOs in a Tough Economy
VMware
Gaining
1.
2.
3.
4.
5.
VMware
Citrix
Systems
Cisco
Software/
Security
Oracle
Symantec
1
#
13 Quarters
Which software providers are gaining
share of your IT spending dollars?
Source: Goldman Sachs IT Spending Survey, March 9th, 2009
VMware is the Proven, Trusted Leader
Providing the Highest ROI and Lowest TCO
“VMware’s incumbent position at the
top of the rankings demonstrates that
server virtualization momentum
remains alive and well with a strong
ROI case for a declining budget
environment.”
- Goldman Sachs
Which software providers are gaining
share of your IT spending dollars?
Source: Goldman Sachs IT Spending Survey, Nov 2nd, 2008
Top 3 Reasons Why VMware is the Right IT
Investment in a Tough Economic Environment
1
Reduce Physical Infrastructure Cost
2
Reduce Datacenter Operating Cost
(e.g. Power & Cooling)
3
Minimize Lost Revenue Due to
Downtime
VMware Delivers Tangible Business Outcomes
Reduction in Datacenter
Capital Expense
$14,235
Reduction in Datacenter
Operating Expense
2.0-3.0
$5,694
Reduction in Risk
$30 MM
0.3 – 1.0
$4 MM
Before
After
Infrastructure Cost per App
Before
After
Sys Admin per 100 Apps*
Before
After
Business Loss Due to
Datacenter Outage**
* Source: IDC and VMware TAM program
** Source: VMware customer – a $2bn insurance company. Estimates based on 40 hrs needed to recover before virtualizing and 4.5
hrs needed for the same recovery after virtualization.
Reduce Server Spend Through Consolidation
Typical
Consolidation: 10:1
VMware…
Decouples software from
hardware
Encapsulates Operating
Systems and applications into
“Virtual Machines”
A Server or Desktop
Virtual Machine
Typical Excess
Hardware Capacity: 3
Years!
12
Reduce Energy Consumption
Highest consolidation rates on most secure and
reliable virtualization platform
Safely improve utilization rates
80% energy reduction
Dynamic server and storage migration
Power off unneeded servers in real-time
Migrate storage dynamically
25% energy reduction
Host desktop PCs in the datacenter
Use thin clients, double refresh cycle
Reduce storage for similar desktop images
70% energy reduction
Copyright © 2005 VMware, Inc. All rights reserved.
Total Savings Per Workload
VMware consolidates servers, storage and networking
infrastructure to safely achieve higher utilization
BEFORE
Servers
1
2
Reducing
Capital Cost
Reducing
Operating
Cost
AFTER
SAVINGS
1000
80
$5,816
84
10
$296
Real Estate (Sq ft)
2053
257
$431
Power (kWh)
407
52
$759
Cooling (kWh)
509
64
$949
Network Switches
Savings per
Workload
(Over 3 years)
• Actual customer savings per application; represents typical savings
• Includes estimated cost of VMware licenses, Support and Subscription
$8,251*
Improving Operational Efficiency
2
Reducing
Operating Cost
Do more work with the same number of
people = operating cost savings
Free up resources and budgets from dayto-day maintenance to focus on future
innovation and strategic projects
Drivers of productivity improvements:
Instant provisioning
Dynamic patching
Zero downtime maintenance
Double the time for innovation: from 28% to 55%!
Source: IDC and VMware TAM program
Achieve OpEx Savings of $40k per Admin Annually
66%
100%
8.1%
8.1%
13.5%
8.1%
13.5%
80%
13.5%
51.4%
8.1%
8.1%
60%
16.2%
51.4%
50.0%
30.6%
5.4%
11.8%
21.6%
13.5%
8.1%
8.8%
8.1%
5.4%
8.1%
8.8%
8.8%
13.5%
25.0%
13.9%
11.1%
16.7%
14.3%
14.3%
VMs take >75% less time
8.3%
VMs take 51 - 75% less time
27.0%
13.5%
19.4%
37.1%
19.4%
40%
18.9%
59.5%
20%
45.9%
10.8%
13.5%
16.7%
2.7%
2.8%
16.2%
16.7%
5.4%
8.1%
0%
-5.4%
-2.7%
-5.4%
VMs take 0 - 25% less time
5.4%
11.1%
56.8%
5.6%
33.3%
5.6%
37.8%
19.4%
13.5%
11.1%
- 2.7%
-2.8%
41.7%
16.7%
0.0%
-13.9%
Same
More Time
61.8%
56.8%
-8.1%
0.0%
VMs take 26 - 50% less time
0.0%
-2.8%
20.0%
11.4%
-5.6%
-2.9%
-20%
Over 66% of VMware customers state their Admin staff is 25%+ more
efficient. This is equivalent to 1.25 days saved per week or 65 workdays
per year per Admin.
Source: VMware TAM program survey, January 2009
Ensuring Business Continuity
Minimize Lost
Reducing
3 Operating
Revenue Cost
Reduce business risk without increasing
costs or complexity
Minimize lost revenue from and avoid
costs of business downtime
Drivers of productivity improvements:
Built-in high availability
Automated recovery
Source: IDC and VMware TAM program
A Typical VMware Customer…
VMotion – Avoided downtime due to
planned server maintenance
= $ 450,000
Storage VMotion – Avoided planned
storage downtime
= $ 430,000
DRS – Automated monitoring and load
balancing
= $ 390,000
Update Manager – Automated host and
guest patching
= $ 360,540
HA – Simple, cost effective high
availability
= $ 480,000
SRM – Automated site recovery
= $ 615,385
A typical VMware customer has 1000 VMs, realizing over
$2,725,925 of savings annually, or $8,177,774 over 3 years
See Appendix and ROI/ TCO calculator for detailed models
Agenda
Economic Environment in 2009
Why VMware is a Strategic Investment
Additional Cost Savings with vSphere 4.0
Proven Customer Success
Introducing VMware vSphere 4.0
EFFICIENCY
CapEx reductions
• 100% greater consolidation ratios
• Up to 50% in storage savings
OpEx Reductions
• Up to 20% additional energy savings
• Saves more than half person/year in sys admin time
CONTROL
Business Risk Mitigation
• One-mouse-click control over application service
levels
• Continuous availability with Fault Tolerance
• Security with vShield Zones
CHOICE
Freedom of choice
• Any server
• Any storage
• Any OS
• Numerous partners products
• And soon – on- and off-premise
100% Higher Consolidation Ratios
Unparallel performance
improvements:
Over 100% greater
consolidation ratio with new
hardware*
For our customer example:
Consolidation ratio of 20:1
instead of 10:1 with new
hardware. This eliminates an
additional 50 servers
… representing
approximately $66,667 in
annual hardware savings
… and $61,578 annual
power and cooling savings
Based on VMmark benchmark studies
Additional 20% Reduction in Power Costs
DPM Savings for 50 Hosts
For our customer example:
$48, 048
$37,752
Before DPM
Additional power and
cooling savings of
$10,296
After DPM
Assumptions: 50% of 50 servers can be powered down for 8 hrs/d ay on weekdays and 16 hrs/day on weekends.
Total power consumption per server ( operating power + cooling power) = 1424 watts/hr
Cost of energy = $ 0.11 per kWH (source: Energy Information Administration)
NOTE: vSphere 4.0 model is based off 50 servers due to the 100% better consolidation achieved
Up to 50% Storage Savings
Storage savings with Thin
Provisioning:
Reduced storage
purchases due to less
over provisioning
50% reduction in
storage costs: $99,750
(over 3 years)
Assumptions:
50% storage deferred due to thin provisioning
Storage costs are $3/GB and RAID5 is used
Upgrading to vSphere 4.0
Higher Consolidation Ratio
= $ 128,245
Distributed Power Management
= $ 10,296
Storage Savings
= $ 99,750
Configuration Efficiency
= $ 56,338
Avoided downtime
= $180,000
By upgrading
VMware
vSphere
this customer
will:
By upgradingto
to VMware
vSphere
4 this 4,
customer
will:
additional $575,599
annually
or $1,726,678
over 3 years
Save•Save
an additional
$408,129
annually
or $1,224,386
up more than half person/year in sys admin time
over•Free
3
years
•Reduce business downtime by additional 30 min a year
See Appendix and ROI/ TCO calculator for detailed models
Agenda
Economic Environment in 2009
Why VMware is a Strategic Investment
Additional Cost Savings with vSphere 4.0
Proven Customer Success
Customer Testimonials
Reduce Costs
“Using VMware software has brought a huge cost benefit to IT - avoiding costs by $1.1
million is fantastic. For every production virtual machine, we estimate a $7,500 cost
avoidance per server. We multiply 150 applications by $7,500 and estimate a $1.1
million cost avoidance.
Barry Naber, Technology Manager at International Truck and Engine Corporation
Simplify Management
The net impact of utility computing with VMware Infrastructure 3 for the business is higher
service levels, for IT - it is simplified and easier to manage infrastructure.
Fazil Habibulla, Vice President and System Architect, NATIXIS Capital Markets
Meet Service Levels Efficiently
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.”
Rob Jones, Director of Technology, ALSTOM
26
Available Resources
Online ROI/ TCO Calculator:
Robust and customizable
analysis of virtualization’s impact
on your IT budget and datacenter
costs
www.vmware.com/calculator
Why Choose VMware:
Vendor selection checklist to
ensure a Complete, Robust,
Proven Virtual Infrastructure
www.vmware.com/technology/why
vmware/
Thank You!
Appendix
Detailed CapEx and OpEx models
Value of Zero Downtime Server
Maintenance
VMware VMotion
Server Maintenance is required for
Updates to component hardware
Updates / patches to the hypervisor
Migration to newer servers
Cost savings from zero downtime server maintenance with VMotion
Avoid overtime cost to perform maintenance
Avoid administrative time in scheduling downtime
Business costs of downtime is specific to each industry and not included here
For a 100 physical server, 1000 VM environment, assuming:
2 hardware/ BIOS upgrades per server + 4 hypervisor patches = 6 maintenance activities per server per year
Overtime Cost
100
# of
servers
X
6
X
# of
updates
(
2 hrs
Time to
perform
upgrade
X
$150/hr
Overtime
$/hr
Scheduling Downtime
+
10
X
0.75 hr
X
# of
Time spent
apps per
scheduling
server downtime per app
$60/hr
Admin
$/hr
)
= $ 450,000
Value of Zero Downtime Storage
Moves Maintenance
VMware
Storage VMotion
Storage Maintenance is usually required for
LUN optimization
Upgrades to better hardware
Cost savings from zero downtime storage maintenance with Storage VMotion
Avoid overtime cost to perform maintenance
Avoid administrative time in scheduling downtime and planning the move
Avoid cost of buying an alternate data mover tool
For a 100 physical server, 1000 VM environment (50GB per VM of storage), assuming:
~20GB can be moved an hour. Storage is moved once in 3 yrs, annualize 1/3 of the 50TB environment every year (16.67TB).
Overtime Cost
833 hrs
Time to
move 16.67
TB each yr
X
$150/hr
Overtime
$/hr
Scheduling Downtime
+
1667 hrs
Time spent
scheduling
downtime
X
$60/hr
Admin
$/hr
Alternate
Tool Cost
Planning Move
+
3333
hrs
Time spent
planning
the move
X
$60/hr
Admin
$/hr
+
$5000
= $ 430,000
Value of Dynamic Load Balancing
VMware DRS
Customers report that without DRS automatically balancing their environments,
they would either:
Decrease their consolidation ratio – this means that the full HW cost savings are not
realized. Customers report up to 30% decrease in consolidation ratios.
Spend more time to manually monitor and manage VMs.
For a 100 physical server, 1000 VM environment, assume that the consolidation ratio decreases by 30% from 10:1 to 7:1.
Alternatively, administrators would have to spend time monitoring the cluster or responding to customer calls every day
OR
Cost of Extra Admin Time
2.5 hrs
X
Hours per
day
260
X
Workdays
in a year
$60/hr
Admin
$/hr
X
10
=
Cost of
monitoring time
$ 390,000
Number of 10host clusters
OR
Increased Hardware Cost
Decreased
consolidation
ratio means
43 servers
Additional
servers needed
X
$8,000
Hardware, license, power/
cooling, space costs per server
= $ 342,857
Value of Automated Patching
VMware
Update Manager
Guest Patching
Administrative time – 6,009 hrs, $360,450 saved annually
Calculated for 1000 virtual machines, assuming 40 patches per machine
>
>
>
Per virtual
machine
Per patch
Scan machines
Assess patch
requirements
Remediate
>
>
Troubleshoot
Rollback – 10%
$360,540
Manual
Automated
Manual
Automated
Manual
Automated
24 min
15 min
156 min
21 min
180 min
36 min
Annual Savings for 1000 VMs
Annual Savings for 1000 VMs
Annual Savings for 1000 VMs
6000 hrs, $360,000
8.6 hrs, $540
6,009 hrs, $360,540
Offline machine patching
Reduces exposure from non-compliant offline/suspended virtual machines
Systems have NICs disabled during patching to reduce risk
Value of Automated Site Recovery
VMware SRM
VMware Site Recovery Manager provides cost savings from:
Reduced recovery infrastructure requirements
Fewer hours spent creating and maintaining DR plans and processes
Significantly reduced cost of DR tests; eliminates IT staff overtime and application
impact
Recovery in a matter of hours, not days or weeks – greatly reducing the financial
exposure a company faces during a major outage
The below captures an estimate of the cost savings provided by SRM when
used to recover from a major outage or disaster
Company that does $25M in revenue a year = ~$96k/weekday. Assume that SRM can achieve RTO of 12
hours instead of 72 hours compared to traditional DR plan.
Value of Lost Revenue
2.5
X
Days of
faster recovery
$96,153
X
Lost revenue
per workday
Value of Lost Time by Workers
+
2.5
X
Days of
faster recovery
X
500
Number of
workers
X
$300/day
Cost of worker
wages
= $ 615,385
(per disaster)
Value of High Availability
VMware HA
High Availability cost savings can have several contributions:
Cost of lost business, lost work
Cost of lost productive time
The sheer simplicity of VMware HA and reduced time & effort compared to other
clustering solutions is not captured
The below only captures a conservative estimate of savings from lost productive
time
For a 100 physical server, 1000 VM environment, assuming 2 failures a year:
Value of Reduced Lost Productive Time
4 hrs
Hours of
downtime
X
X
10
Number of
users per VM
X
10
X
Number of
VMs per host
$60/hr
Cost of
productive
time
X
2
Failures
per year
X
10
Number of 10host cluster
= $ 480,000
Value of Zero Downtime, Zero Data
Loss Application Availability
OpEx Savings
VMware Fault Tolerance prevents lost business revenue from mission-critical,
high-revenue applications outages
Simplicity of FT reduces the time and effort required to implement complex
hardware and software solutions for continuous availability
For a 77 physical server, 1000 VM environment, assume:
approximately10% of VMs are protected by FT (100 VMs). On average, number of VMs protected is 100 / 77 hosts = 1.3 VMs.
2 host failures in the cluster per year
Lost revenue per minute of high-revenue apps can range from $2000-15000 per minute depending on type of transactions being
processed.
-
Extra Hosts for FT
Cost of Lost Revenue
4
Minutes of
downtime
prevented
X
$6000
X
1.3
Lost revenue/ Avg number of
minute
FT protected
VM/ host
X
1
X
77/ 10
Failures per Number of 10year in 10-host host clusters
cluster
-
$8,000
Costs of
hardware
X
8
Number of
extra Hosts
NOTE: vSphere 4.0 model is based off 77 servers due to the 30% better consolidation achieved
= $ 188,062
Value of Thin Provisioning
CapEx savings
vStorage Thin Provisioning cost savings can have several contributions:
Reduce up to 50% of storage costs
Reduce time for planning and scoping
Faster deployment and higher application uptime
Thin Provisioning saving comes from:
Reducing power, cooling and floor space costs
Reducing application downtime for future growth
For a 77 physical server, 1000 VM environment of 50GB average size (mix of web, print, email and database), assuming:
-
Entire storage is RAID 5 with 4 disk and is replicated to secondary site
-
Average cost for storage according to IDC in price band 3-4 is $3 per TB
Production Site
1000 x 50% x
Number of
VMs
Reduction
in storage
50 GB
Capacity
per VM
X
1.33
RAID 5
X
$3
=
$99,750
$3/GB
NOTE: vSphere 4.0 model is based off 77 servers due to the 30% better consolidation achieved
Value of Built-in Configuration
Management
OpEx Savings
VMware Host Profiles and vNetwork Distributed Switch simplifies the
provisioning, configuration and administration of Hosts and virtual machines,
through centralized management.
VMware vDS and Host Profiles cost savings come from:
Simplify initial setup, change management and easy auditing
Avoiding costly errors and time consuming troubleshooting and debugging
For a 77 physical server, 1000 VM environment, assuming:
-
On average, 5% error rate for each change. For a 77 host environment, this is equal to 12 errors per year to troubleshoot
>
>
>
Avg per
Host or
virtual
machine
Setup
Change
Audit
>
Troubleshoot
$87,293
VI 3
vSphere 4
VI 3
vSphere 4
Manual
Automated
10hr 20min
1hr
40hr
30min
50hr 20min
1hr 30min
Annual Savings
Annual Savings
Annual Savings
709 hrs, $53,175
456 hrs, $34,118
1165 hrs, $87,293
NOTE: vSphere 4.0 model is based off 77 servers due to the 30% better consolidation achieved