Transcript The Virtualization Market: Today and Tomorrow

VMware Virtualization:
The Right, Most Strategic Investment
VMware
March 2009
Agenda
Economic Environment in 2009
Why VMware is a Strategic Investment
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
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: 15:1
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
Total Savings Per Workload
VMware consolidates servers, storage and networking
infrastructure to safely achieve higher utilization
BEFORE
AFTER
1000
80
$5,816
84
10
$296
Real Estate (Sq ft)
2053
257
$431
Power (kWh)
407
52
$759
Cooling (kWh)
509
64
$949
Servers
1
2
Reducing
Capital Cost
Reducing
Operating
Cost
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
SAVINGS
$8,251*
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.
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
Source: IDC and VMware TAM program
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 10 physical server, 150 VM environment, assuming:
2 hardware/ BIOS upgrades per server + 4 hypervisor patches = 6 maintenance activities per server per year
Overtime Cost
10
# of
servers
X
6
# of
updates
X
(
2 hrs
Time to
perform
upgrade
X
$150/hr
Overtime
$/hr
Scheduling Downtime
+
15
X
0.75 hr
X
# of
Time spent
apps per
scheduling
server downtime per app
$60/hr
$/hr
) = $ 58,500
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 10 physical server, 150 VM environment (50GB per VM of storage), assuming:
Storage is moved once in 3 yrs, annualize 1/3 of the 7.5TB environment every year (2.5TB). ~20GB can be moved an hour.
Overtime Cost
124 hrs
Time to
move 2.5TB
each yr
X
$150/hr
Overtime
$/hr
Scheduling Downtime
+
248 hrs
Time spent
scheduling
downtime
X
$60/hr
Admin
$/hr
Alternate
Tool Cost
Planning Move
+
500 hrs
Time spent
planning
the move
X
$60/hr
Admin
$/hr
+
$5000
= $ 68,113
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.
Have to manually monitor VMs to place them appropriately.
For a 10 physical server, 150 VM environment, assume that the consolidation ratio decreases by 30% from 15:1 to 10.
Alternatively, administrators would have to spend time monitoring the cluster or responding to customer calls every day
Increased Hardware Cost
Decreased
consolidation
ratio means
X
5 servers
More servers
needed
= $ 40,000
$8,000
Hardware, license, power/
cooling, space costs per server
OR
OR
Cost of
increased
monitoring time
Cost of Extra Admin Time
2.5 hrs.
Hours per day
X
260
Days in a year
X
$60/hr
Admin
costs/hr
= $ 39,000
Value of Automated Patching
VMware
Update Manager
Guest Patching
Administrative time – 2448 hrs, $147,744 saved annually
Calculated for 150 virtual machines, assuming 40 patches per machine
Per virtual
machine
Per patch
>
Scan machines
>
Assess patch
requirements
>
>
>
Remediate systems
Troubleshoot
Rollback – 10%
$147,744
Manual
Automated
Manual
Automated
Manual
Automated
24 min
15 min
156 min
21 min
180 min
36 min
Annual Savings for 150 VMs
Annual Savings for 150 VMs
Annual Savings for 150 VMs
900 hrs, $54,000
1548 hrs, $93,744
2448 hrs, $147,744
Offline machine patching
Reduces exposure from non-compliant offline/suspended virtual machines
Systems have NICs disabled during patching to reduce risk
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
Value of Automated Site Recovery
VMware SRM
SRM cost savings can have several contributions:
Cost of lower disaster recovery site investment
Cost of lower recovery plan planning and management time
Cost of less lost business revenue
Cost of less lost wages
The below only captures a conservative estimate of savings from lost business
revenue and lost productive time
Company that does $5M in revenue a year = ~$20k / weekday. Assume a disaster strikes. Assume that
SRM can achieve RTO of 24 hours instead of 72 hours compared to traditional DR plan.
Value of Lost Revenue
2
X
Days of
faster recovery
$20,000
X
Lost revenue
per day
Value of Lost Time by Workers
+
2
X
Days of
faster recovery
X
40
Number of
workers
X
$300/dy
Cost of worker
wages
= $ 64,000
(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 10 physical server, 150 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
15
Number of
VMs per host
X
$50/hr
X
Cost of User
productive time
2
Failures
per year in 10host cluster
= $ 60,000
Value of Fault Tolerance
VMware FT
Fault Tolerance (FT) cost savings is primarily in preventing lost business revenue
from when mission-critical, high-revenue applications go down
Fault Tolerance prevents lost business revenue by providing zero downtime, zero
data loss continuous availability for your applications
The simplicity of FT and reduced time & effort compared to other hardware-based
solutions is not captured
For a 10 physical server, 150 VM environment, assume ~10% of VMs are protected by FT (15 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.
Value of Lost Revenue
4
Minutes of
downtime
prevented
X
$7000/min
X
Lost revenue
per minute
X
15÷10
Avg. number of
FT-protected VMs
per host
Extra Hosts for FT
X
2
Failures
per year in 10host cluster
-
$15000
Cost per
host
X
1
Number of
extra hosts
=
$ 69,000
Agenda
Economic Environment in 2009
Why VMware is a Strategic Investment
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
25
VMware is Lowest TCO Per VM
VMware’s cost-per-VM beats even “free” products…
VMware VI3
Foundation
VMware VI3
Enterprise
2-way server (16GB RAM)
$7,000
$7,000
$7,000
Cost: Guest Windows licenses1
$5,998
$5,998
$5,998
$995
$5,750
$0
$13,993
$18,748
$12,998
15*
15*
7
$933
$1,250
plus …
$1,857
Cost: Virtualization license
Subtotal
Total VMs2 (2GB each)
Cost per VM
Other
Solutions
VI3 Enterprise includes advanced functionality such as live
server and storage migration, dynamic workload balancing,
built in high availability, data protection, and power
management which competitors don’t have.
1 List price for 2-socket Windows 2003 Server Datacenter Edition
2 Assumes a 2:1 memory overcommit ratio based on VMware advanced memory mgmt technologies
* Assumes 1GB of memory used by “host virtualization SW” for all vendors
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!