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tco_roi_methdology

tco_roi_methdology

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Published by bb989898
Original from Vmware for ROI preperation
Original from Vmware for ROI preperation

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Published by: bb989898 on Jul 25, 2009
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05/11/2014

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VMware TCO / ROI Methodology
 
 
 
2
Table of Contents
1
 
Executive Summary..............................................................................................................................3
 
1.1
 
VMware Infrastructure TCO / ROI Analysis Overview.................................................................3
 
1.2
 
Lab Manager TCO / ROI Overview.............................................................................................4
 
1.3
 
VDI TCO / ROI Overview.............................................................................................................5
 
2
 
VMware Infrastructure ROI/TCO Methodology....................................................................................7
 
2.1
 
Data Center Server Hardware.....................................................................................................7
 
2.2
 
Data Center Server Storage........................................................................................................8
 
2.3
 
Data Center Server Networking.................................................................................................10
 
2.4
 
Data Center Server Power and Cooling....................................................................................11
 
2.5
 
Data Center Server Space.........................................................................................................14
 
2.6
 
Data Center Server Provisioning...............................................................................................17
 
2.7
 
Data Center Server Administrative Costs..................................................................................18
 
2.8
 
Reduced Business Risks...........................................................................................................19
 
2.8.1
 
Data Center Server Disaster Recovery.............................................................................19
 
2.8.2
 
Data Center Server Unplanned Downtime.......................................................................20
 
2.9
 
VMware Infrastructure Investment.............................................................................................21
 
2.9.1
 
VMware Infrastructure Licensing......................................................................................21
 
2.9.2
 
VMware Infrastructure Design, Plan and Deployment Services.......................................22
 
2.9.3
 
VMware Infrastructure Training.........................................................................................23
 
3
 
Lab Manager TCO / ROI Methodology...............................................................................................24
 
3.1
 
Improved Lab System Consolidation.........................................................................................25
 
3.1.1
 
Lab System Consolidation Savings..................................................................................25
 
3.1.2
 
Future System Expenditure Cost Avoidance....................................................................28
 
3.1.3
 
Improved Labor Productivity.............................................................................................29
 
3.1.4
 
Improve Lab / Test System Provisioning Efficiency..........................................................29
 
3.1.5
 
Improve Bug Reproduction Efficiency...............................................................................30
 
3.1.6
 
Customer Support / Help Desk Efficiency Improvements.................................................32
 
3.2
 
Improved Business Agility..........................................................................................................32
 
3.2.1
 
Improve Application Time to Market.................................................................................33
 
3.3
 
VMware Lab Manager Investments...........................................................................................34
 
3.3.1
 
VMware Lab Manager Software Licensing Costs.............................................................34
 
3.3.2
 
VMware Lab Manager Storage Investment......................................................................36
 
3.3.3
 
VMware Lab Manager Services........................................................................................37
 
4
 
VDI TCO / ROI Methodology..............................................................................................................38
 
4.1
 
Desktop Capital Expenditure Avoidance...................................................................................38
 
4.2
 
Desktop Operating Expenditure Cost Avoidance......................................................................38
 
4.3
 
Capital Investment for Implementing VMware VDI....................................................................40
 
5
 
Conclusion..........................................................................................................................................43
 
 
 
3
1 Executive Summary
This document provides a methodology for capturing the reduction in Total Cost of Ownership (TCO) and Return onInvestment (ROI) from implementing any of VMware’s virtualization products and solutions, including:1. VMware Infrastructure (VI);2. VMware Lab Manager;3. VMware Virtual Desktop Infrastructure (VDI).
3
 The TCO / ROI methodology was validated with ex-Gartner ROI / TCO experts at consultancy Alinean, Inc. toquantify the cost savings and business value of VMware solutions. The methodology uses proven financialtechniques, industry research, VMware field and customer data and user provided metrics to quantify and comparethe TCO savings, required investments and business benefits of implementing VMware virtualization solutions. Thismethodology is applied in the VMware TCO / ROI Calculator, an on-line tool designed to help organizations collectkey information about their assets and opportunities for improvement, and quantify the value they can personallyachieve via deployment of VMware solutions. Using user-specific data, metrics and this methodology, all keyfinancials as to TCO opportunities, savings, investments, ROI, NPV savings and payback period are calculated.Users can also rely on industry standard metrics where data is not available and with a few simple inputs can get adetailed report.The TCO /ROI methodology first helps organizations quantify the current “Before VMware (As Is)” cost of ownershipfor server infrastructure, development / test lab and desktop infrastructure management. Against the currentopportunities, the methodology creates an “After VMware (To Be)” simulation, quantifying the cost savings,productivity improvements, risk reduction and business benefits of VMware Infrastructure, Lab Manager and VDI, andtallies any incremental investments to setup and deploy the proposed VMware solutions.These financial results are tallied into three key financial analyses over the analysis period – set for three years:
The TCO analysis formula subtracts the “After VMware (Projected – To Be)” scenario from the “BeforeVMware (As Is)” scenario to achieve the change in TCO – the net benefits from the VMware solution. Thesescenarios are referred to as To Be and As Is respectively in the analysis details.
The ROI analysis formula compares the net benefits with the incremental investment as a percentage toillustrate the ratio of returns versus investment (ROI = net benefits / investment).
The payback period formula determines the duration from project kickoff whereby the net benefits of theproposed solution exceed the cumulative investment in the project.
1.1 VMware Infrastructure TCO / ROI Analysis Overview 
For most organizations, Data Center Servers are under-utilized and more expensive than anticipated initially to run /manage. Examining the initial acquisition cost of a typical 2xCPU server, it is estimated to be a list price of $6,500,while the annual operating cost is more than $3,927 per year including:
$975 in additional annual maintenance and support contract costs,
$671 in annual server provisioning labor costs
$3,773 in annual server administration labor costs,
$650 in annual power and cooling costs per year, and
3
© VMware, Inc. All rights reserved. Protected by one or more of U.S. Patent Nos. 6,397,242, 6,496,847, 6,704,925, 6,711,672,6,725,289, 6,735,601, 6,785,886, 6,789,156, 6,795,966, 6,880,022, 6,961,941, 6,961,806, 6,944,699, 7,069,413; 7,082,598 and7,089,377; patents pending.VMware, the VMware “boxes” logo and design, Virtual SMP and VMotion are registered trademarks or trademarks of VMware, Inc.in the United States and/or other jurisdictions. All other marks and names mentioned herein may be trademarks of their respectivecompanies.

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