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<<Customer name>>Server Infrastructure Optimization <<date>>

Virtualization by Numbers:The Business Case

Spotlight on Cost

AgendaThe Theory

Hypothetical Company Profile

Opportunity

Approach

Solution

Value

Compelling Economic Advantages Proposed

The Practice

Case Studies

Next Steps

The Company – Contoso Aero

Enterprise ProfileMid size Aerospace and Defense business operating in the United States with 3,000 employees in 3 primary (suburban) locations

Business ProblemNeed to improve availability and quality of disaster recovery systems to meet requirements of the new set of government contracts without driving cost of IT operations up. No projects with Payback Period over 12 months will be approved by the CFOSoftware budget of $500K, Project budget $1M

IT environment 182 production servers and 82 Disaster Recovery servers in DC supporting 3 manufacturing locations growing at 10% annual rate (4 year server life cycle) supporting over 180 applications

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The Opportunity

Consolidation: currently runs at under 10% CPU utilization on averageDisaster Recovery: currently 0.4 DR servers for every Production server ratioHigh Availability: Currently, no clustering implementedGreen: over 60% of peak power usage on idle servers

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Approach

Use server consolidation with virtualization to “pay” for High Availability and Disaster Recovery solution

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As-Is To-Be

Production Server

# of Servers

Server Type

# of Serve

rs

Server Type

VMs to Support

File / print servers 100 2 CPU

Consolidate 182 production servers and 82 Disaster Recovery servers to 57 servers, a 4.6:1 consolidation ratio

E-mail servers 25 4 CPUApplication servers 20 2 CPU

Database servers 12 4 CPU

Web servers 25 2 CPUTotal Production 182 2/4 CPU 44 4CPU 182

DR servers 82 2CPU 13 4CPU 182Total 264 602 CPUs in

total57 4CPU 364

Benefit Overview

Three year net benefits $4,684,753

Three year investment in Microsoft Virtualization

$717,653

Return on Investment (Net Benefits / Total Investment)

553%

NPV Savings $3,719,792

Payback Period (in months) 61. Production server consolidation savings are supporting IT

services improvements in HA and DR2. Payback and Investment requirements met3. HA and DR contributes to the ROI4. Power and CO2 emission impact completes the picture

Three Year Benefit AnalysisBefore Costs

After Costs Difference % Difference

Production Server Consolidation and Management Benefits $6,826,946 $2,869,405 $3,957,541 58.0%

Production Server Consolidation Green IT Benefits $1,040,672 $308,157 $732,515 70.4%

Production Server High Availability Benefits (Indirect) $935,234 $236,566 $698,668 74.7%

Production Server Disaster Recovery Benefits (Indirect) $25,693 $12,011 $13,682 53.3%

Three year total benefits $8,828,545 $3,426,139 $5,402,406 61.2%

Benefits 1: Production Server Consolidation & Management

Three year benefit

analysis Before Costs

After Costs

Difference

% Difference

Existing Server Cost Avoidance

$2,889,600 $1,432,100 $1,457,500 50.4%

New Server Purchase Cost Avoidance

$620,800 $340,200 $280,600 45.2%

Networking Savings $275,880 $80,370 $195,510 70.9%

Networked Storage Savings $549,480 $157,890 $391,590 71.3%

Provisioning Efficiency Savings

$56,187 $6,914 $49,273 87.7%

Change Management Efficiency Savings

$976,732 $326,731 $650,001 66.5%

Operations and Administration Efficiency Savings

$1,458,267 $525,200 $933,067 64.0%

Total $6,826,946 $2,869,405 $3,957,541 58.0%

Benefits 2:Production Server Consolidation Green IT Benefits

Three year benefit analysis

Before Costs

After Costs

Difference

% Difference

Power and Cooling Savings $716,919 $261,899 $455,020 63.5%

Data Center Space Savings $323,753 $46,258 $277,495 85.7%

Total Financial Green Impact $1,040,672 $308,157 $732,515 70.4%

Carbon Emissions per Year (in metric tons)

1,469 464 1,005 68.4%

Number of Equivalent Cars Carbon Emissions (per year)

269 85 184 68.4%

Number of Equivalent Trees to Cover CO2 Emissions (per year)

37,667 11,897 25,770 68.4%

Number of Equivalent Homes Carbon Emissions (per year)

158 50 108 68.4%

Indirect Benefits

Production Server High Availability

Three year benefit analysis Before Costs

After Costs

Difference

% Difference

Total Downtime Avoidance Benefits $935,234 $236,566 $698,668 74.7%

Production Server Disaster Recovery Benefits

Three year benefit analysis Before Costs

After Costs

Difference

% Difference

Production Server DR Benefits (Indirect)

$25,693 $12,011 $13,682 53.3%

Investment: To achieve these benefits, the investment in Microsoft is expected to be as follows:

Microsoft Virtualization Investment (costs) Total Costs Over Three year

Microsoft Integrated Virtualization Licensing Costs $524,283

Production Server Virtualization Professional Services Costs $156,750

Production Server Virtualization Implementation Labor Costs $36,620

Production Server Virtualization Training Costs $0

Three year total costs $717,653

Software Investment

Licensing Components:Full WS08 licensing and CALsFull SMSE licensing

Competitive Comparison Table

Competitive Cost Comparison

With Microsoft Server

Virtualization Solution

With Competing

Server Virtualization Solution

Competitive Savings

with Microsoft

Virtualization

Competitive Savings with

Microsoft Virtualization

(%)

Production Server Virtualization - Competitive Cost Comparison $458,426 $1,165,096 $706,670 60.7%Return on Investment (Net Benefits / Total Investment) 552.8% 244.9% 307.9%

Three Year potential net benefit: $4,684,753

Case Studies

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Hawaii bank saves money and time by consolidating server environment

“One of our goals was to reduce total cost of ownership. By consolidating the server network with Hyper-V, we did lower ownership costs, including hardware, software, and operational expenses.”Rick Shibata, Technology Infrastructure Services Manager, American Savings Bank

Cut hardware costs Reduced power

consumption Anticipated $30,000

annual savings in server maintenance

Decreased server management and provisioning time

Meeting business needs at lower cost

Implemented Hyper-VTM

virtualization technology in Windows Server® 2008

Installed multiple virtual machines on individual physical servers

Will consolidate up to 30 percent of server environment

Growing server network created increased hardware, licensing, and power costs

Mounting time and staff resources to manage server environment

Needed to efficiently manage server-refresh process

SolutionBusiness Challenge

Results/ Benefits

With virtualization, newspaper reduces costs, gains infrastructure flexibility

SolutionBusiness Challenge

Results/ Benefits

• Reduced Costs -Consolidated Servers with 10-20 to one ratio

• Improved Server Utilization

• Better Disaster Preparedness

• Infrastructure Flexibility

• Less Time Provisioning and Maintaining Servers

The AJC worked with Microsoft and Dell consultants to implement the Windows Server® 2008 Enterprise operating system with Hyper-V™ technology and Microsoft® System Center Virtual Machine Manager 2008

• The newspaper’s IT staff faced critical power and cost problems due to server proliferation

• Needed a better disaster preparedness solution

• Needed a more flexible infrastructure

“With Hyper-V, we get four free Windows VM licenses. We can run virtualized Linux. And we can use off-the-shelf or repurposed hardware. This gives us significant flexibility and cost savings.”Brent Register, Client/Server Engineering Manager, The Atlanta Journal-Constitution

Hospital uses virtualization to speed rollout of new services and improve uptime

SolutionBusiness Challenge

Results/ Benefits

Faster introduction of new services

Higher application availability

Deploy 100 servers instead of 400,

Saved approximately U.S.$1.5 million in hardware costs

Saved $150,000 in additional project-related hardware

Use Windows Server® 2008 with Hyper-V™ technology to speed server rollout

Use Microsoft® System Center Virtual Machine Manager 2008 to reduce server deployment chores

Expand physician and patient-care services

Simplify server requisitioning and provisioning

Reduce server count Reduce the number of

presentation virtualization servers

“We are using Hyper-V to quickly and cost-effectively roll out new services, which makes our hospital a more attractive partner to physicians and other organizations.”Paul Acampora, Manager of Customer Service, Saint Raphael Healthcare System

Next Steps

Use the Microsoft Integrated Virtualization Calculator to measure the financial benefit of implementing virtualization

Use the MAP tool to analyze your IT infrastructure and determine the level of impact of virtualization

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Schedule a meeting to discuss operational costs in your IT infrastructure

Ready Your Team - learn about the Microsoft virtualization solutions that align with your needs.