The Virtualization Room

May 1 2008   11:21AM GMT

Virtualization tools, advice focus on ROI

Bridget Botelho Bridget Botelho Profile: Bridget Botelho

The decision whether to adopt virtualization often comes down to the corporate bottom line. CFOs want to know how long it will be before they see return on investment from virtualization, and there are many considerations in determining ROI.

Yesterday, I spoke with Stephen Fink, senior infrastructure architect for the global IT consultancy Avanade, about a comprehensive tool he created that takes just about every inch of data centers under consideration to determine what the ROI for virtualization will be.

Fink has 14 years of experience as a consultant and created the virtualization model for ROI as a tool for his own clients, but it made its way around the company and is now used as the way to determine ROI by Avande consultants, he said.

There are 125 inputs in the Microsoft Excel-based tool – such as power and cooling, cabling, network, CPU, servers, floor space, and staffing costs – and each helps determine the impact of implementing virtualization at a customer’s location, he said.

“There will never be a one-size-fits-all solution, and there has to be a business case for virtualization; I look at their environment from a high-level approach and asses the inventory. We look at their apps, their network, the annual power costs, licensing costs for software, etc., to see what they pay for their environment, and we can now give a really good idea of the ROI with Microsoft Hyper-V and VMware,” Fink said.

Avande, which is partially owned by Microsoft, has the benchmark information on Hyper-V from the most recent release candidates and uses that to determine Hyper-V ROI. Hyper-V is scheduled for release in August.

“We look at the net costs of the environment without virtualization versus what they would pay if they virtualized, with specific server types, running ESX or Hyper-V. We can tell you how many systems can be virtualized, and you can see the cost of your virtual servers, the cost per OS and the cost of your virtual hosts, to determine your annual cost reduction from virtualized guests,” Fink explained.

Fink said consultants like him are often used to determine whether virtualization is worth the initial acquisition and licensing costs, which depends on businesses’ expectations when it comes to ROI. “If a company already operates efficiently and has a portfolio of apps that make them a poor candidate for virtualization – like very high CPU and high memory consuming apps or data base severs, virtualization may not be the answer for them,” Fink said.

Avanade uses the tool as part of its consultancy, and it is only available through Avande consultants – which, of course, comes at a cost to businesses.

Other virtualization calculator tools are available for free, like the one from VMware, but these aren’t as precise as Fink’s tool from what I can tell.

There are also plenty of experts offering advice on determining virtualization ROI that won’t cost you anything.

According to IT security and virtualization technology analyst Alessandro Perilli , to calculate ROI, “you need to apply simple math to the costs your company could mitigate or eliminate by adopting virtualization.”

He reported that virtualization can reduce some of the following direct costs:

* Cost of space (leased or owned) for physical servers
* Energy to power physical servers
* Air conditioning to cool the server room
* Hardware cost of physical servers
* Hardware cost of networking devices (including expensive gears like switches and fibre channel host bus adapters)
* Software cost for operating system licenses
* Annual support contracts costs for purchased hardware and software
* Hardware parts for expected failures
* Downtime cost for expected hardware failures
* Service hours of maintenance cost for every physical server and networking device

Scott Feuless, a senior consultant with Compass, based in Texas, wrote about how to quantify virtualization ROI recently, and IT consultant John Hayes of Avnet Technology Solutions also had some advice on figuring out the cost of virtualization that could help make the case for virtualization.

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  • Bridget Botelho
    Today, ROI is essential in order to gain approval for most large projects, such as server virtualization. As ex-Gartner ROI/TCO experts, and developers of several different ROI models for server virtualization, may I recommend another comprehensive ROI analysis tool independently developed for Microsoft at: http://www.microsoft.com/virtualization/ROItool/default.mspx In performing your own ROI analysis, you can use the vendor provided tools as a foundation / compare and contrast in order to make the most informed decision.
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