VMware ROI TCO Calculator Guide

VMware ROI TCO Calculator:
Overview & Sample Analysis
2011 VMware Inc. All rights reserved
Table of Contents
Calculator Overview Sample analysis: Expected ROI/TCO analysis (forward looking) Realized ROI/TCO analysis (backward looking) Hybrid ROI/TCO analysis (mix of backward & forward) Additional Resources Addi i lR
VMware products covered

Savings S i
Journey &
Server HW
CapEx
Storage HW Networking Infrastructure HW Admin Productivity
OpEx
Power & Cooling Rack Space & Office Space
Business Agility
Planned Downtime Unplanned Downtime Business Downtime
Products
Cloud Services Delivery vCloud Director Chargeback Desktop Virtualization Vi t li ti Business Continuity & Disaster Recovery View Site Recovery Manager CapacityIQ AppSpeed vShield App & Edge
$ $
$ $
$ $
$ $
$ $ $ $ $
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
$ $
Operations Management, Security & Compliance
$ $ $ $ $
Server Virtualization
vSphere & vCenter Server
$ represents possible savings Supported by succinct modules within calculator to help users evaluate
Methodology
Total Cost
Total Cost minus
Before
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
4
Design & Scope

Design D i We are striking a balance between simplicity and credibility
Simplicity
Too complex, and the analysis becomes difficult to explain and repeat
Too Simple and customers will not find outputs credible
Credibility
Cash basis: no depreciation, amortization, time value discounting Standardized time horizon: 5 year analysis
Scope ROI 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
5
Return on Investment (ROI)

% return on i t investment required to transition to virtualized t t i dt t iti t i t li d infrastructure
Total Savings
CapEx OpEx Downtime
reference slide 3 for more detail
Total Investment
New Servers, Storage, Network Switches VMware License & Support Services & Training
Total Cost of Ownership (TCO)

Costs C t associated with operation of datacenter i t d ith ti fd t t
CapEx p
Servers Storage Network Switches
OpEx
Power & Cooling IT Administration Labor Rack Space
Business Agility us ess g ty

Planned Downtime Unplanned Downtime Business Downtime
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Workflow: Server Virtualization

Start / Login
My Analysis M A l i
(create or open prior analysis)
Define configurations of physical servers, count of workloads, and consolidation ratio Modules for 5 basic datacenter elements: Server HW, Power & Cooling, Storage, Networking, Rack Space Select edition of vSphere / vCenter Server, and define level of SnS, discounts, input historical or ELA data Based on edition of vSphere p selected, calculator provides additional modules to review benefits of advanced features Summary of vSphere & vCenter Server Investment, Savings, ROI and estimated Payback Period over 3 years and 5 years
1) Server Configuration
Capacity IQ
2) Server Consolidation
AppSpeed
3) Product Selection
vShield App & Edge
4) Beyond Server Consolidation
Site Recovery Manager
5) ROI
vCloud Director & Chargeback

Choose to include additional management products. Product calculations leverage prior inputs and provides incremental ROI/TCO
End / Analysis Summary

(charts, tables, export)
Workflow: Desktop Virtualization

Start / Login
My Analysis M A l i
(create or open prior analysis)
Desktop Virtualization
Define configurations of physical servers, count of workloads, and consolidation ratio Modules for 5 basic datacenter elements: Server HW, Power & Cooling, Storage, Networking, Rack Space Select edition of vSphere / vCenter Server, and define level of SnS, discounts, input historical or ELA data Based on edition of vSphere p selected, calculator provides additional modules to review benefits of advanced features Summary of vSphere & vCenter Server Investment, Savings, ROI and estimated Payback Period over 3 years and 5 years
1) Desktop Configuration
*Please Note:
Desktop Virtualization must be selected during New Analysis Creation U Users will not be able t add ill t b bl to dd Desktop Virtualization to an existing Server Virtualization only analysis later
2) Desktop Virtualization
3) Product Selection 4) Premier Edition Advanced Features
5) ROI
End / Analysis Summary

(charts, tables, export)
Module Elements
Example: Server Virtualization > Power & Cooling
1 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 hidden assumptions tabclick to unhide Scenario A represents extension of environment without benefit of vSphere Scenario B represents environment as users transition workloads to virtualized infrastructure (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 Links along the bottom direct users to additional resources Go to Analysis Summary for supporting charts and tables, including Green Savings, and Cost per App comparison to competing platforms. Users will also find document export functions here
1 3
4 3 2 5 4 6 5 7 8 6
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Table of Contents
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1) Server Configuration
1 Define number of workloads and configuration of host servers assuming no virtualization (Year 0) Define number of workloads and configuration of host servers assuming 100% virtualized Max Consolidation Ratio is a key part of this analysis Open assumptions tab and adjust VMs 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)
3 4
1 4
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2) Server Consolidation > Server Hardware (part 1)
1 Number of workloads defined in previous module is the starting number in this module. Refine number of workloads thru Year 5 in Assumptions tab: Change annual growth rate (linear) For non-linear growth, locate switch for manually adjust count of workloads, change to yes, close tab, tab and input values into module 2 1 2 By default, analysis assumes 100% refresh based on average useful life and average age assumptions. Define a staggered refresh if necessary in Assumptions tab: Locate switch for manually adjust count of servers retired, change to yes, close tab, and input values into module 3 By default, analysis assumes 100% of workloads are migrated to virtualized infrastructure in Year 1. Adjust % virtualized to define a different schedule for migration
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1 Manually adjust count of workloads By default, calculator assumes a linear workload growth ratefirst assumption at the top of assumptions tab For non-linear growth, locate switch for manually adjust count of workloads, change to yes, close tab, and input values into module 2 Manually adjust count of host servers? By default, calculator assumes a constant consolidation ratio each year, post-virtualization To define a changing consolidation ratio each year, change to yes, close tab, and input values into module 3 Manually adjust host servers retired? By default and for simplicity, calculator uses useful life and average age assumptions to determine 100% refresh of servers T define a staggered refresh (eg. To d fi t d f h( 1/3 of starting count of servers, spread out over three years), change to yes, close tab, and input values into module
1 2 3
Caution: enabling all three functions adds great deal of flexibility to customize analysis, 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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2) Server Consolidation > Server Storage (part 1)
1 In addition to the GBs of data store, this section also incorporates additional hardware required for different protocols of storage: Fibre Channel SAN requires server Fibre-Channel HBAs and SAN Switches iSCSI SAN requires server TOE cards NAS will not require additional HW 2 Financial impact of GBs of data store are calculated toward the bottom of each scenario
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2) Server Consolidation > Server Storage (part 2)
1 Users can define the transition to and increased shared storage environment. Many of vSpheres advanced features such as vMotion and Distributed Resources Scheduler 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% 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 transition Next, users can select applicable shared storage protocols, and define the mix (input box(es) for %s) to the right 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 t feature within vSphere (zero out if not applicable, or leveraging at the storage array level)
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3) Product Selection > vSphere edition selection (part 1)
1 Cycling through each vSphere edition in the list box, users will be able to see which advanced features are included below
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1 Select the level of Support & Subscription and define number of years Define any applicable discounts (standard discounts available for government agencies and academic institutions) for license and SnS For Enterprise License Agreements (ELAs), enable checkboxes above to input contract amounts into input boxes below. 1 2 For a $200,000 three year ELA, enable checkboxes above Years 1 to 3, and input $200,000 into Year 1 Based on growth of workloads defined in Server HW section, calculator will then estimate additional licenses and SnS required for Years 4 and 5 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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1 Unhide assumptions tab to select/deselect and or adjust cost of services and training through Planning and Design 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 applicable input boxes at the bottom of main module will over-ride itemized costs calculated above
2 3
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4) Beyond Server Consolidation > Server Provisioning Labor
1 Unhide assumptions tab to adjust assumptions regarding labor savings from faster provisioning Labor savings, calculated as the difference 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 Agility. Default assumption is that 40% of reduction in time spent on provisioning is returned to the business
2 3
20
4) Beyond Server Consolidation > vMotion
1 Unhide assumptions tab to adjust assumptions regarding downtime savings from planned server maintenance events Planned Downtime savings, calculated savings as the difference between downtime required with and without vSphere virtualization, is the value calculated
21
4) Beyond Server Consolidation > Storage vMotion
1 Unhide assumptions tab to adjust assumptions regarding downtime savings from planned storage array maintenance events Planned Downtime savings, calculated savings as the difference between downtime required with and without vSphere virtualization, is the value calculated
22
4) Beyond Server Consolidation > High Availability & Fault Tolerance
1 Unhide assumptions tab to adjust assumptions regarding downtime savings from unplanned events High Availability does not require any additional capital expenditures expenditures, and helps to automatically restart servers due to OS or HW failures 2 Downtime savings from virtualization and High Availability are not always positive due to consolidation ratios ratios when a virtualized host server fails, it will bring down multiple workloads which may not be completely offset by ability to restart VMs faster This downtime can be fully mitigated with Fault Tolerance (FT) for mission critical workloads, but requires additional servers to host live shadow VMs for failover additional capital expenditures are 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 Business Agility. Default assumption is that 40% of reduction in downtime savings is returned to the business
1 3
2 3 4
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4) Beyond Server Consolidation > Distributed Power Mgmt
1 Unhide assumptions tab to adjust assumptions applicability of distributed power management to further consolidate inactive workloads and power down excess servers during nights and weekends Incremental Power & Cooling savings calculated here
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4) Beyond Server Consolidation > Server Admin Labor (part 1)
1 Unhide assumptions tab to adjust assumptions regarding labor savings from advanced management features in vSphere Labor savings calculated as the savings, 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 end-user time. is the value of Business Agility. Default assumption is that 40% of reduction in time spent on administration is returned to the business
2 3
25
4) Beyond Server Consolidation > Server Admin Labor (part 2)
1 The number of Workloads per FTE Administrator, regardless of silo (server, storage, network, application, etc.), is the measure of administration productivity here. Most VMware customers have already virtualized a portion of their datacenters, and can readily speak to the difference productivityinput values here. For users who are new to virtualization, we have surveyed customers and VMwares own IT Administrators, and have provided a way to calculate incremental added productivity from various advanced management 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. Faster 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 administration i returned t th d i i t ti is t d to the business
2 3
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5) ROI (part 1)
1 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, $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. 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. Click on this button to bring up menu of additional server virtualization management products to add to analysis: CapacityIQ AppSpeed Site Recovery Manager 2 vShield Edge vShield Endpoint Chargeback vCloud Director
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5) ROI (part 2)
1 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 calculator Finally, Investment and Savings enable for the calculation of ROI as well as Payback Period
2 3
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Analysis Summary
1 Analysis Summary provides additional charts and tables to collect and present results of all products reviewed Cumulative Investment Savings & Investment, ROI provides a view into results, each year, over the 5 year analysis horizon 2 1 Distribution of Savings: 5 Year Total provides 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 of Virtualization Total Cost of Ownership: 5 Year Total (2) again compares CapEx, OpEx and Other expenses, but with expanded granularity d d l it 2 Charts Data provides all back-up data behind charts
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Table of Contents
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1 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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1 Manually adjust count of workloads By default, calculator assumes a linear workload growth ratefirst assumption at the top of assumptions tab For non-linear growth, locate switch for manually adjust count of workloads, change to yes, close tab, and input values into module 2 Manually adjust count of host servers? By default, calculator assumes a constant consolidation ratio each year, post-virtualization To define a changing consolidation ratio each year, change to yes, close tab, and input values into module 3 Manually adjust host servers retired? By default and for simplicity, calculator uses useful life and average age assumptions to determine 100% refresh of servers T define a staggered refresh ( To d fi t d f h (eg. 1/3 of starting count of servers, spread out over three years), change to yes, close tab, and input values into module
1 2 3
Caution: enabling all three functions adds great deal of flexibility to customize analysis, 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.
32
1 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 $50 000 in spend each year enable year, 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 for years--the 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 to 100% in respective management product modules to zero out additional calculator spend estimates 1
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1 To input historical spend of Services + Training, toggle check boxes to enable applicable input boxes For a three years of history with $10,000 $10 000 in spend each year enable year, checkboxes above Years 1 to 3, and input $10,000 into Years 1, 2 and 3 To exclude calculator estimates for Years 4 and 5, enable checkboxes for those years the default value for years--the input boxes once enabled is zero
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Analysis Summary (part 1)
1 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 accurately by the calculator
35
2 2 Cumulative results for three years of history can also be found in small upper-right table, in the Over 3 yrs. column 1 In Analysis Summary > Charts > Chart 1, Realized results (Investment, Savings, ROI) for Years 1, 2 and 3 are graphed
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Table of Contents
37
1 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 $50 000 in spend each year enable year, checkboxes above Years 1 to 3, and input $50,000 into Years 1, 2 and 3 2 Leaving Years 4 and 5 unchecked will enable the calculator to estimate 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 calculator will estimate costs at list price
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1 To input historical spend of Services + Training, toggle check boxes to enable applicable input boxes For a three years of history with $10,000 $10 000 in spend each year enable year, checkboxes above Years 1 to 3, and input $10,000 into Years 1, 2 and 3 2 Leaving Years 4 and 5 unchecked will enable the calculator to estimate 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 have $62,324 been added to the original $30,000
2
$ 92,324
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1 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
40
2 Results for Years 4 and 5 include projections of additional investments and savings 2 Cumulative results over 3 years and over 5 years can also be found in small upper-right table upper right 1 In Analysis Summary > Charts > Chart 1, Realized results (Investment, Savings, ROI) for Years 1, 2 and 3 are graphed.
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Table of Contents
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Additional Resources
ROI TCO Calculator Website: roitco.vmware.com Frequently Asked Questions: FAQ document Feedback & Questions: roitco.vmware.com/vmw/account/FeedbackQuestions
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VMware ROI TCO Calculator Guide

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VMware ROI TCO Calculator:

Overview & Sample Analysis

2011 VMware Inc. All rights reserved

VMware products covered

Operations Management, Security & Compliance

vSphere & vCenter Server

Total Cost minus

Total Cost of Ownership

Design & Scope

Too Simple and customers will not find outputs credible

Return on Investment (ROI)

Total Cost of Ownership (TCO)

Business Agility us ess g ty

Workflow: Server Virtualization

vShield App & Edge

4) Beyond Server Consolidation

Site Recovery Manager

vCloud Director & Chargeback

End / Analysis Summary

Workflow: Desktop Virtualization

3) Product Selection 4) Premier Edition Advanced Features

End / Analysis Summary

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