Presentation v mware roi tco calculator

VMware ROI TCO Calculator:Overview & Sample Analysis

© 2011 VMware Inc. All rights reserved

Table of ContentsTable of Contents

Calculator OverviewSample analysis:• Expected ROI/TCO analysis (forward looking)

• Realized ROI/TCO analysis (backward looking)

• Hybrid ROI/TCO analysis (mix of backward & forward)

Addi i l RAdditional Resources

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VMware products covered

CapEx OpEx Business AgilityS i CapEx OpEx Business AgilityServer HW Storage HW Networking

HWInfrastructure

Admin Productivity

Power & Cooling

Rack Space & Office Space

Planned Downtime

Unplanned Downtime

Business Downtime

Cloud Services vCloud $ $ $ $ $ $ $

Savings

ProductsJourney &

Cloud Services Delivery

vCloudDirector $ $ $ $ $ $ $Chargeback $ $ $ $ $

Desktop Vi t li ti

View $ $ $ $

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Virtualization $ $ $ $Business Continuity & Disaster Recovery

Site Recovery Manager $ $ $

Operations Management, Security & Compliance

CapacityIQ $ $ $ $ $AppSpeed $ $vShield App $ $ $

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vShield App & Edge $ $ $

Server Virtualization

vSphere & vCenterServer

$ $ $ $ $ $ $ $ $1

“$” represents possible savings• Supported by succinct modules within calculator to help users evaluate

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Methodology

Total Cost

Before minusTotal Cost

After equals Savings

There are two main outputs for this calculator:• Return on Investment

• Equals Savings / Investment• …where investment represents the sum of incremental investment

in transition from physical to virtual (new servers, shared storage, VMware licenses, services and training, etc.)

• Total Cost of Ownership• Inclusive of IT Administration and downtime costs

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Inclusive of IT Administration and downtime costs

Design & Scope

D iDesign• We are striking a balance between simplicity and credibility

Too complex, and the analysis becomes difficult

to explain and repeatSimplicity

Too Simple and customers will not find Credibility

• Cash basis: no depreciation, amortization, time value discounting• Standardized time horizon: 5 year analysis

outputs credibleCredibility

• Standardized time horizon: 5 year analysis

Scope• ROI TCO Calculator is not meant to generate a definitive bill of goodsROI TCO Calculator is not meant to generate a definitive bill of goods

• Our goal is to provide a credible understanding of cost and benefits• Users may need to engage additional resources (sales / finance) for transactions that

require more custom models

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require more custom models

Return on Investment (ROI)

% t i t t i d t t iti t i t li d% return on investment required to transition to virtualized infrastructure

• CapExTotal Savings• OpEx• Downtime…reference slide 3 for more detail

1Total InvestmentTotal Investment• New Servers, Storage,

Network Switches• VMware License & Support• Services & Training

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Total Cost of Ownership (TCO)

C t i t d ith ti f d t tCosts associated with operation of datacenter

CapExp• Servers• Storage• Network Switches• Network Switches

OpExOpEx• Power & Cooling• IT Administration Labor• Rack Space• Rack Space

Business Agilityus ess g ty• Planned Downtime• Unplanned Downtime• Business Downtime

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• Business Downtime

Workflow: Server Virtualization

M A l i

Start / Login

My Analysis(create or open prior

analysis)


1) Server Configuration

Define configurations of physical servers, count of

workloads, and consolidation Capacity IQConfiguration

2) Server Consolidation

workloads, and consolidation ratio

Modules for 5 basic datacenter elements: Server HW, Power & Cooling, Storage, Networking,

Rack Space

AppSpeed

3) Product Selection

Select edition of vSphere / vCenter Server, and define

level of SnS, discounts, input historical or ELA data

Based on edition of vSphere

vShield App & Edge

4) Beyond Server Consolidation

5) ROI

pselected, calculator provides additional modules to review benefits of advanced features

Summary of vSphere & vCenter Server Investment, Savings, ROI and estimated Payback

Site Recovery Manager

vCloud Director & ChargebackROI and estimated Payback

Period over 3 years and 5 years& Chargeback

End / Analysis Summary

(charts, tables, export)

Choose to include additional management products. Product calculations leverage prior inputs

and provides incremental ROI/TCO

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Workflow: Desktop Virtualization

M A l i

Start / Login

My Analysis(create or open prior

analysis)

Desktop Virtualization

1) Desktop Configuration

Define configurations of physical servers, count of

workloads, and consolidation

*Please Note:Configuration

2) Desktop Virtualization

workloads, and consolidation ratio

Modules for 5 basic datacenter elements: Server HW, Power & Cooling, Storage, Networking,

Rack Space

• Desktop Virtualization must be selected during New Analysis Creation

U ill t b bl t dd3) Product

Selection

4) Premier Edition

Select edition of vSphere / vCenter Server, and define

level of SnS, discounts, input historical or ELA data

Based on edition of vSphere

• Users will not be able to add Desktop Virtualization to an existing Server Virtualization only analysis later

4) Premier Edition Advanced Features

5) ROI

pselected, calculator provides additional modules to review benefits of advanced features

Summary of vSphere & vCenter Server Investment, Savings, ROI and estimated PaybackROI and estimated Payback

Period over 3 years and 5 years

End / Analysis Summary

(charts, tables, export)

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Module Elements

Example: Server Virtualization > Power & Cooling Summary table, with key metrics, updates as users make changes and completes each module

Key assumptions for each module are distilled and grouped together in

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2

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distilled and grouped together in hidden assumptions tab—click to unhide

Scenario A represents extension of environment without benefit of vSphere

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vSphere

Scenario B represents environment as users transition workloads to virtualized infrastructure

(A – B) is the variance in Costs

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5

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(A B) is the variance in Costs calculated in two scenarios, and represents savings for module

Each module has a text box at the bottom to provide some context to module analysis and or assumptions

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module analysis and or assumptions

Links along the bottom direct users to additional resources

Go to Analysis Summary for supporting charts and tables, including

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Green Savings, and Cost per App comparison to competing platforms. Users will also find document export functions here

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Define number of workloads and configuration of host servers assuming no virtualization (Year 0)

Define number of workloads and configuration of host servers assuming

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1) Server Configuration

configuration of host servers assuming 100% virtualized

Max Consolidation Ratio is a key part of this analysis…

…Open assumptions tab and adjust

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4

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…Open assumptions tab and adjust VM’s per Core variable to refine. There is also an option here to change analysis to one based on leased servers (avg price per server then represents the annual lease cost)

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2

3

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Number of workloads defined in previous module is the starting number in this module. Refine number of workloads thru Year 5 in Assumptions tab:

12) Server Consolidation > Server Hardware (part 1)

• Change annual growth rate (linear)

• For non-linear growth, locate switch for “manually adjust count of workloads”, change to “yes”, close tab and input values into module

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tab, and input values into module

By default, analysis assumes 100% refresh based on average useful life and average age assumptions. Define a staggered refresh if necessary in Assumptions tab:

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2 Assumptions tab:

• Locate switch for “manually adjust count of servers retired”, change to “yes”, close tab, and input values into module

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By default, analysis assumes 100% of workloads are migrated to virtualized infrastructure in Year 1. Adjust % virtualized to define a different schedule for migration

3

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Manually adjust count of workloads

• By default, calculator assumes a linear workload growth rate—first assumption at the top of assumptions tab


assumptions tab

• For non-linear growth, locate switch for “manually adjust count of workloads”, change to “yes”, close tab, and input values into module

Manually adjust count of host servers?

• By default, calculator assumes a constant consolidation ratio each year, post-virtualization

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• To define a changing consolidation ratio each year, change to “yes”, close tab, and input values into module

Manually adjust host servers retired?3

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• By default and for simplicity, calculator uses useful life and average age assumptions to determine 100% refresh of servers

T d fi t d f h (

Caution: enabling all three functions adds great deal of flexibility to customize analysis, but calculator may not be able to guarantee • To define a staggered refresh (eg.

1/3 of starting count of servers, spread out over three years), change to “yes”, close tab, and input values into module

but calculator may not be able to guarantee logic in module is correct under all scenarios.

Users will be required to review to ensure changes lead to desired results.

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In addition to the GB’s of data store, this section also incorporates additional hardware required for different protocols of storage:

• Fibre Channel SAN requires server

12) Server Consolidation > Server Storage (part 1)

• Fibre-Channel SAN requires server HBA’s and SAN Switches

• iSCSI SAN requires server TOE cards

• NAS will not require additional HW

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NAS will not require additional HW

Financial impact of GB’s of data store are calculated toward the bottom of each scenario

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Users can define the transition to and increased shared storage environment. Many of vSphere’sadvanced features such as vMotion and Distributed Resources Scheduler

12) Server Consolidation > Server Storage (part 2)

are enabled by and require shared storage. Depending on whether the environment in this analysis starts with no shared storage or already has shared storage, the transition to a virtualized infrastructure with 100%

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virtualized infrastructure with 100% shared storage, may require significant investment in additional hardware (FC SAN and iSCSI SAN). Two areas for users to define if there will be shared storage, and the degree of the transitiontransition

Next, users can select applicable shared storage protocols, and define the mix (input box(es) for %’s) to the right

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Important for users to specify the average size of workloads in the lower-left corner of assumptions tab. Here too, users can choose to include storage savings from Thin Provisioning f t ithi S h ( t if t

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feature within vSphere (zero out if not applicable, or leveraging at the storage array level)

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Cycling through each vSphere edition in the list box, users will be able to see which advanced features are included below

13) Product Selection > vSphere edition selection (part 1)

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Select the level of Support & Subscription and define number of years

Define any applicable discounts (standard discounts available for


2(standard discounts available for government agencies and academic institutions) for license and SnS

For Enterprise License Agreements (ELA’s), enable checkboxes above to input contract amounts into input

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input contract amounts into input boxes below.

• For a $200,000 three year ELA, enable checkboxes above Years 1 to 3, and input $200,000 into Year 1

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• Based on growth of workloads defined in Server HW section, calculator will then estimate additional licenses and SnS required for Years 4 and 5

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3• To exclude calculator estimates for

Years 4 and 5, enable checkboxes for those years--the default value for input boxes once enabled is zero

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Unhide assumptions tab to select/deselect and or adjust cost of services and training through Planning and Design

For annual services such as P2V


2 For annual services such as P2V Acceleration and Health Checks, users will be able to adjust cost per server to derive total cost for each year with input boxes in main module

If PSO credits are applicable enabling

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If PSO credits are applicable, enabling input boxes at the bottom of main module will over-ride itemized costs calculated above

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Unhide assumptions tab to adjust assumptions regarding labor savings from faster provisioning

Labor savings, calculated as the difference between labor required with

14) Beyond Server Consolidation > Server Provisioning Labor

2difference between labor required with and without vSphere virtualization, is the first value calculated

Faster provisioning translates into a reduction in end-user wait time. This is the value of Business Agility

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is the value of Business Agility. Default assumption is that 40% of reduction in time spent on provisioning is returned to the business

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3

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Unhide assumptions tab to adjust assumptions regarding downtime savings from planned server maintenance events

Planned Downtime savings calculated

14) Beyond Server Consolidation > vMotion

2 Planned Downtime savings, calculated as the difference between downtime required with and without vSphere virtualization, is the value calculated

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1

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Unhide assumptions tab to adjust assumptions regarding downtime savings from planned storage array maintenance events

Planned Downtime savings calculated

14) Beyond Server Consolidation > Storage vMotion

2 Planned Downtime savings, calculated as the difference between downtime required with and without vSphere virtualization, is the value calculated

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1

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Unhide assumptions tab to adjust assumptions regarding downtime savings from unplanned events

• High Availability does not require any additional capital expenditures

14) Beyond Server Consolidation > High Availability & Fault Tolerance

any additional capital expenditures, and helps to automatically restart servers due to OS or HW failures

• Downtime savings from virtualization and High Availability are not always positive due to consolidation ratios

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positive due to consolidation ratios—when a virtualized host server fails, it will bring down multiple workloads which may not be completely offset by ability to restart VM’s faster

• This downtime can be fully mitigated3 • This downtime can be fully mitigated with Fault Tolerance (FT) for mission critical workloads, but requires additional servers to host live shadow VM’s for failover—additional capital expenditures are

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calculated when FT is enabled in assumptions tab

Application downtime mitigated translates into a reduction in end-user wait time. This is the value of

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Business Agility. Default assumption is that 40% of reduction in downtime savings is returned to the business2

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4

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Unhide assumptions tab to adjust assumptions applicability of distributed power management to further consolidate inactive workloads and power down excess servers during

14) Beyond Server Consolidation > Distributed Power Mgmt

nights and weekends

Incremental Power & Cooling savings calculated here

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1

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Unhide assumptions tab to adjust assumptions regarding labor savings from advanced management features in vSphere

Labor savings calculated as the

14) Beyond Server Consolidation > Server Admin Labor (part 1)

2 Labor savings, calculated as the difference between labor required with and without vSphere virtualization, is the first value calculated

Faster administration translates into a reduction in end user wait time This

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reduction in end-user wait time. This is the value of Business Agility. Default assumption is that 40% of reduction in time spent on administration is returned to the business

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3

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The number of Workloads per FTE Administrator, regardless of silo (server, storage, network, application, etc.), is the measure of administration productivity here. Most VMware

14) Beyond Server Consolidation > Server Admin Labor (part 2)

customers have already virtualized a portion of their datacenters, and can readily speak to the difference productivity—input values here.

For users who are new to 2

1

virtualization, we have surveyed customers and VMware’s own IT Administrators, and have provided a way to calculate incremental added productivity from various advanced management features available inmanagement features available in vSphere Enterprise+. Enter the “Existing – unvirtualized” metric in section 1, and adjust values in section 2 to derive metric for “New –virtualized.”2Faster administration translates into a reduction in end-user wait time. This is the value of Business Agility. Default assumption is that 40% of reduction in time spent on

d i i t ti i t d t th

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administration is returned to the business

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The final module in Server Virtualization provides details into the ROI starting with required Investments at the top. For VMware Software License & Support in this example, $

15) ROI (part 1)

$129K of spend is required in Year 1. Then depending on time horizon (3 Years vs. 5 Years), users can see additional spend required for Years 2 and beyond, due to workload growth defined in Server Hardware module.

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defined in Server Hardware module.

Users will find input boxes for Other Investments not accounted for in the calculator. Also, should there be any sales tax considerations, tax rates can be adjusted here.

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be adjusted here.

Click on this button to bring up menu of additional server virtualization management products to add to analysis:

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• CapacityIQ

• AppSpeed

• Site Recovery Manager

• vShield EdgevShield Edge

• vShield Endpoint

• Chargeback

• vCloud Director

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Towards the bottom half of this module, users will find detail on Savings calculated

Users will also find input boxes for Other Savings not accounted for in the

15) ROI (part 2)

2Other Savings not accounted for in the calculator

Finally, Investment and Savings enable for the calculation of ROI as well as Payback Period

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1

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Analysis Summary provides additional charts and tables to collect and present results of all products reviewed

• Cumulative Investment Savings &

1Analysis Summary

• Cumulative Investment, Savings & ROI provides a view into results, each year, over the 5 year analysis horizon

• Distribution of Savings: 5 Year Total provides a quick snapshot of where

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1provides a quick snapshot of where users can expect to savings

• Distribution of Investment: 5 Year Total provides a quick snapshot of where users will need to invest

• Total Cost of Ownership: 5 Year Total (1) compares CapEx, OpEx, and Other (downtime, tax, other user-defined costs) expenses between a fully Physical datacenter and one with the benefits ofand one with the benefits of Virtualization

• Total Cost of Ownership: 5 Year Total (2) again compares CapEx, OpEx and Other expenses, but with

d d l itexpanded granularity

Charts Data provides all back-up data behind charts

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For a Realized ROI analysis a key assumption is the virtualization schedule that defines how many physical workloads are transitioned to virtual machines each year


Adjust percentages until count of workloads matches known history

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Manually adjust count of workloads

• By default, calculator assumes a linear workload growth rate—first assumption at the top of assumptions tab


assumptions tab

• For non-linear growth, locate switch for “manually adjust count of workloads”, change to “yes”, close tab, and input values into module

Manually adjust count of host servers?

• By default, calculator assumes a constant consolidation ratio each year, post-virtualization

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• To define a changing consolidation ratio each year, change to “yes”, close tab, and input values into module

Manually adjust host servers retired?3

3

• By default and for simplicity, calculator uses useful life and average age assumptions to determine 100% refresh of servers

T d fi t d f h (

Caution: enabling all three functions adds great deal of flexibility to customize analysis, but calculator may not be able to guarantee • To define a staggered refresh (eg.

1/3 of starting count of servers, spread out over three years), change to “yes”, close tab, and input values into module

but calculator may not be able to guarantee logic in module is correct under all scenarios.

Users will be required to review to ensure changes lead to desired results.

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To input historical spend for VMware Software + SnS, toggle check boxes to enable applicable input boxes

• For a three years of history with $50 000 in spend each year enable


$50,000 in spend each year, enable checkboxes above Years 1 to 3, and input $50,000 into Years 1, 2 and 3

• To exclude calculator estimates for Years 4 and 5, enable checkboxes for those years the default value forfor those years--the default value for input boxes once enabled is zero

• If analysis is expanded to include server management products, include historical costs of those products here and set discounts toproducts here and set discounts to 100% in respective management product modules to zero out additional calculator spend estimates

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To input historical spend of Services + Training, toggle check boxes to enable applicable input boxes




• To exclude calculator estimates for Years 4 and 5, enable checkboxes for those years the default value forfor those years--the default value for input boxes once enabled is zero

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In Analysis Summary > Charts Data > Distribution of Investments, users can verify that inputs of historical spend for VMware Software + SnS and Services + Training have been aggregated

1Analysis Summary (part 1)

accurately by the calculator

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In Analysis Summary > Charts > Chart 1, Realized results (Investment, Savings, ROI) for Years 1, 2 and 3 are graphed

Cumulative results for three years of


22 Cumulative results for three years of

history can also be found in small upper-right table, in the Over 3 yrs. column

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1

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To input historical spend for VMware Software + SnS, toggle check boxes to enable applicable input boxes




Leaving Years 4 and 5 unchecked will enable the calculator to estimate additional cost of vSphere and vCenter

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additional cost of vSphere and vCenter Server required for those years based on workload growth and virtualization schedule defined in Server Hardware

Be sure to define any applicable discounts for Years 4 and 5 or

33discounts for Years 4 and 5 or calculator will estimate costs at list price

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To input historical spend of Services + Training, toggle check boxes to enable applicable input boxes




Leaving Years 4 and 5 unchecked will enable the calculator to estimate additional cost of services required

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additional cost of services required based on selections defined in Assumptions Tab (unhide to adjust)

In this case, the annual vSphere Health Check was selected, and incremental costs of $62 324 haveincremental costs of $62,324 have been added to the original $30,000

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$ 92,324

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In Analysis Summary > Charts Data > Distribution of Investments, users can verify that inputs of historical spend and calculator estimates for VMware Software + SnS and Services +


Training have been aggregated accurately by the calculator

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In Analysis Summary > Charts > Chart 1, Realized results (Investment, Savings, ROI) for Years 1, 2 and 3 are graphed.

Results for Years 4 and 5 include


2Results for Years 4 and 5 include projections of additional investments and savings

Cumulative results over 3 years and over 5 years can also be found in small upper right table

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1small upper-right table

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Additional Resources

ROI TCO Calculator Website: roitco.vmware.comFrequently Asked Questions: FAQ documentFeedback & Questions: roitco.vmware.com/vmw/account/FeedbackQuestions

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Technology

Presentation v mware roi tco calculator