Debunking virtualization and ROI calculation myths

Contrary to popular belief, virtualization does not always guarantee a positive ROI calculation. Deconstructing common myths will help organizations separate fact from fiction.

When calculating virtualization ROI, organizations must separate fact from fiction. Some common virtualization

misconceptions stem from vendors and others are often opinions restated as facts. 

To compound the problem, calculating any return on investment (ROI) is as much guesswork as it is mathematics.  Though the cost side of ROI calculation is usually easy to formulate, generating quantitative numbers for the benefits is harder -- especially for virtualization.

As a result, virtualization ROI calculation can be rife with errors. For an accurate ROI calculation, be sure to account for the following five virtualization myths.

1. A virtualized workload yields a positive ROI
If you listen to IT pundits, you’d think a virtual infrastructure is always a win over a traditional, physical servers. Virtualizing an infrastructure, however, does not always result in a net positive ROI. 

Virtualizing an application or server workload requires careful assignment of correct resource levels, tuning for performance and consideration of the impact other co-located VMs might have on that workload. Certain applications are more difficult to effectively virtualize than others, and may require different resource consumption models. Taking these differences for granted may not give you the virtualization ROI results that you seek.

2. Virtualization reduces personnel costs
Many organizations expect a new virtualization project to lessen an IT department’s workload. After all, a virtual infrastructure contains less physical hardware, which requires less support.  But server hardware support does not comprise the bulk of IT’s daily activity.

Most IT activity lies within the operating system and applications. Virtualizing an OS  relocates its processing atop a hypervisor, but it does little for reducing administrative workload.

3. Virtualization cuts storage costs
Virtualization often increases storage costs, which occurs when organizations move from direct-attached storage to a more expensive storage area network (SAN) for virtualization.

Most IT administrators desire high availability for virtual machines, which usually involves shared storage.  These requirements, combined with the added SAN management costs, generally drive storage costs higher.

4. Desktop virtualization saves money
Many organizations implement a form of a virtual desktop infrastructure to reduce desktop deployment and support costs.

Such desktop centralization requires SAN storage and additional servers, as well as added software and licensing costs. These requirements add to the established costs for managing a physical desktop infrastructure.

Moving to VDI also does not  eliminate physical desktops. Instead, it moves the  processing elsewhere. Organizations often overlook these additional costs when calculating ROI for virtual desktops.

5. Virtualization is always cheaper than the cloud
Too often, virtualization and the cloud are spoken together in the same breath.  Cloud computing often uses virtualization as one of its core services, but the two technologies are very different. 

Cloud computing is a manifestation of economies of scale, enabling hosting companies to sell services for a lower price than what most organizations could offer in-house. Economies of scale do not exist in smaller enterprise environments as they are simply not big enough to enjoy the scale. Virtualization in the cloud is often a less expensive option than hosting VMs. Public clouds allow these enterprise environments the option to purchase or rent a portion of an economy of scale.

Virtualization projects are about value as much as operational efficiency. Take care with your virtualization ROI calculation when justifying investments.  A close examination may find that some of your beliefs are, in fact, myths.

This was first published in November 2011

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