The Virtualization Room

Apr 16 2008   1:48PM GMT

Saving money by using virtualization

Eric Siebert Eric Siebert Profile: Eric Siebert

As part of a business case to justify our server consolidation/virtualization project, I had to show the benefits of what the project would provide. Virtualization provides a lot of “soft” benefits like reduced administration, maintenance costs, head count, etc. but one of the “hard” benefits is from the reduced power and cooling costs. I put together a little spreadsheet of all my servers and the wattage of their power supplies to help calculate how much money we would save in that area. The end result was real numbers I could take to management to show them the ROI that virtualization provided.

In today’s world the cost of just about everything has been on the rise. Fuel costs in particular have a ripple effect on just about everything we buy which also affects computers. That’s why virtualization is a great way to offset those increased costs. Providing power and cooling to a data center can be a very big expense, virtualizing servers can dramatically reduce this cost. PlateSpin provides a nice power savings calculator on their website. If we plug in the following numbers:

  • 200 physical servers
  • average usage of 750 watts per server
  • average processor utilization of 10% before virtualization
  • target processor utilization of 60% after virtualization

The average power and cooling savings a year comes out to $219,000 with a consolidation ratio of 5:1 based on a cost per kilowatt hour of 10 cents. As the cost of power increases the savings become even greater, at 12 cents the cost savings become $262,800 per year and at 15 cents the cost savings become $328,500 per year.

Of course savings will vary based on a number of factors including how well utilized your physical servers are before virtualization, your consolidation ratio which can sometimes be as high as 15:1 and also your location. Different parts of the country average different costs per kilowatt hour, California and New York tend to be the highest at 12 – 15 cents per kilowatt hour where Idaho and Wyoming are the cheapest at about 5 cents per kilowatt hour. Power costs tend to rise a lot more then they go down so the argument for virtualization from a cost perspective becomes much easier when you factor in the potential savings.

Some power companies like PG&E even offer incentives and rebates for virtualizing your data center and reducing power consumption. A greener data center benefits everyone and besides reducing costs also helps the environment. Virtualization is one of the key technology’s to help make this possible.

2  Comments on this Post

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  • Randall Cole
    The example of 750 W/server is a bit high. PG&E uses 225 W/server for the average energy consumption of volume servers, as published in the August 2007 EPA report to Congress, to calculate the energy efficiency incentives for server virtualization/consolidation. According to that report, volume servers constitute 85% of the power consumption of all servers in the US. Manufacturers typically publish nameplate power consumption numbers for servers that are at least twice the actual power consumption. There is no reliable relationship between nameplate and actual power consumption.
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  • Eric Siebert
    Actual power consumption will vary based on how a server is configured. If you take a server like the HP DL380 it comes with dual 800W power supplies. How much of the 800 watts the server uses will be based on the type/number of cpu's, number of adapter cards, number of hard drives and the amount of memory. 750 watts was used because it was the default for the calculator.
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