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VMware savings hindered by backup, ESX license costs

Virtualization promises big savings, but don't expect any miracles.

Beware of vendors promising massive cost savings thanks to virtualization. While technologies such as VMware ESX can save users boatloads of cash on hardware and power and cooling costs, those savings can quickly be consumed on the backend.

"The virtualization vendors are saying that if you use virtualization, you'll save 30, 40, 50% -- and that's just not true," said Dave Leonard, CTO with Infocrossing Inc., an IT outsourcer in Leonia, New Jersey.

The firm recently completed a cost analysis for a customer that compared hosting eight single-processor servers versus consolidating them onto a single four-processor system running VMware Infrastructure 3 (VI3). Over four years, Infocrossing calculated a savings of 15% -- hardly a jaw-dropping figure.

In Infocrossing's analysis, the customer saved money on "the things that everybody expects," Leonard said -- things like hardware, maintenance, power, network and cabling, as well as reduced license fees for infrastructure management software.

But Leonard also identified several areas of "anti-savings": the significant additional expense of a premium ESX Server license, an additional management server on which to run VirtualCenter, VMware's dedicated management console, and perhaps most surprisingly -- the cost of additional backup infrastructure.

Infocrossing uses IBM's Tivoli Storage Manager (TSM) for backups, Leonard explained, which performs incremental file-level backups. In a non-virtual world, TSM marks the changes on files within the environment. But since virtual machines (VMs) are represented as a single file, every time a file within the VM image changes, TSM marks the entire VM changed. This can dramatically increase the size of the backups and the storage capacity required to keep them.

Furthermore, in a highly utilized virtual environment, "you may have more difficulty scheduling backups within their windows," Leonard said, driving the need for additional SAN ports, network interface cards, tape drives and the like.

Infocrossing estimated that the cost of doing backup in a virtual environment should be 33% higher than if the machines were on dedicated hosts.

Exit polls inconclusive

The jury is definitely still out on average virtualization savings. "You see some wildly varying numbers based on what people decide to do with the technology," said John Humphreys, director of virtualization for IDC.

"We've talked to users that have saved $3 million on investments of $300,000, others that have saved just 15%," Humphreys said. Twenty-five percent is probably a pretty good conservative estimate, he said.

However, one area of consistent savings seems to be an increased server-to-admin ratio in virtualized environments. The industry average hovers around 20:1 and 25:1, Humphreys said. But with virtualization, he said, "We have seen some early adopters that have dramatically changed that ratio" from 50:1 all the way up to 200:1."

Leonard suggests recalibrating your usual IT practices to get better savings out of virtualization. Some of his suggestions may not be acceptable to production environments, but if you're running virtualization for test and development, they could deliver savings of 60- to 65%, he said.

For example, when it comes to backup, instead of doing nightly incrementals with TSM, Infocrossing has created some scripts to take nightly snapshots of the .vmdk files and store them on a disk device for seven days. And if there's a failure, "we tell the customer we're not going to fix the environment, we're just going to re-image," Leonard said.

Infocrossing also found it could scale back on service levels and man-hours: "We're not going to monitor the environment as aggressively; we're not going to patch nearly as often, and performance, well, it is what it is," said Leonard.

Over time, the single biggest line item cost in a virtualization project -- the ESX server license -- should all but "evaporate," Leonard said. As products such as Microsoft's Longhorn hypervisor and XenSource are released and mature, "there are going to be other viable hypervisor technologies."

Let us know what you think about the story; email: Alex Barrett, News Director

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