Interesting virutalization cost analysis

While I am not going to present the raw data and calculations, they are private property of my employer, I am going to share the rough 'bottom line' from a customer perspective.

Bottom line: Physical server ~$4,000, equivalent virtual server ~$3,000.

(Update: We continue our memory analysis and with the workloads we have - java app servers, web servers, vendor applications that used to one/server - we are seeing with 100 active slices average memory utilization of 12% of our available real memory and peak (several months of data so far) of just under 25% of real memory). That allows us to at least double our estimates of the number of slices - even if I leave a 20% safety margin, our costs can be lowered to about $270/slice/year! That changes the above vm comparison from $3,000 to ~ $2200 )


So two things need to be kept in mind here:

The costs are just about anything that can be identified as devoted to the servers which includes machine room operating costs (these are actuals since we are getting bill's every month), labor and a 5 year equipment depreciation. The calculations are audited by a financial group outside of my organization and they insist on pretty good documentation of the costs.

We are also getting some discounts on the hardware and software, but not so much that a very large ISP couldn't get the same or perhaps do even better.

So, without further ado:

A 8GB quadcore, dual socket server run's us a little under $4100/year to keep running.

A 640MB, single CPU virtual server 'slice' costs a little under $370/year.

Cutting the main server's memory down to about 2 GB, which is what most applications we have seen typically need, will really not change the cost's very much. Say it's goes to $4,000/yr. To make the equivalent of this server in 'slices' would take 3 slices to make up the memory (which only gives us 3 CPU's) or 8 slices to make the CPU's equivlent (which gives us closer to a 4GB server). So let's use 8 as the number. 8 X $370 = $2,960.

So, it's pretty easy to see why virtualization is a big win in operating expense (OPEX). But virtualization has much more going for it than that, labor resources get stretched very much further and limited floor space is much better utilized.....