Virtualization

Cut variable and fixed costs using VMware

VMware can replicate multiple workstations on a single machine, potentially saving you thousands in hardware costs. Here is an accountant's view of VMware to help you determine whether it will help you weather any budget crisis you might be facing.

Companies today are responding to the shaky financial environment by reducing budgets and cutting costs. Meeting reduced budgets often requires reducing equipment and staffing. However, businesses that depend heavily on server farms may be able to save money and maintain service levels by using a program called VMware, especially if a business is in that critical stage of replacing or repurposing aging equipment or needing to expand its server base. If your enterprise is approaching either stage, you may want to consider using VMware to consolidate operations.

Made by VMware Inc. of Palo Alto, Calif., the "VM" in VMware stands for Virtual Machine. VMware offers the ability to set up multiple, independent virtual workstations or servers on a single piece of hardware. Savings realized when consolidating servers include fixed costs such as new machines, rack mounts, cabling, and operating systems, and variable costs such as utility bills and IT staff hours devoted to testing, deployment, maintenance, and configuration. Let’s take a closer look at VMware and the cost savings its company purports.

Becoming more VM-aware
There are four VMware applications: Workstation, ESX Server (for servers of up to eight CPUs), GSX Server (for servers of up to four CPUs), and the latest app, currently in beta, Virtual SMP (which adds symmetric multiprocessing to applications). Each virtual machine in a VMware setup is isolated from the others and from the host operating system and its hardware. The number of virtual machines is limited by factors such as hard drive space and RAM, but with the right setup it's possible to operate as many as 64 simultaneous virtual machines.

These guest operating systems, as the virtual machines are called, run within a host operating system in all cases except for ESX Server, which is a server OS. VMware Workstation hosts can be Windows NT, 2000, XP, or most distributions of Linux. VMware Server hosts are the corresponding server operating systems. Within VMware you can run any version of Windows from 3.1 and most Linux distributions.

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You can view more detailed specifications online for VMware Workstation, ESX Server, GSX Server, and Virtual SMP.

Achieving cost savings
Information on cost savings is based on data and case studies provided by VMware and an October 2002 report by IT analyst Giga Information Group Inc. that compared the benefits of server resource managers to virtual machines (see "Server Workload Consolidation—Best Choices for Intel Server Environments"). It would be wise to be skeptical of self-reported claims made for Total Cost of Operation (TCO) savings of 40, 50, or even 60 percent. This need for caution is especially true when conclusions are based upon projections of "what would have been" if a non-VMware, one-application-per-server setup was chosen. In addition, enterprise expenses are unique and variable; a lot depends upon location, wages, hardware and software standards, contracts negotiated, and changing market prices of equipment, software, and support. Yet even a small percentage decrease in TCO can total many thousands of dollars, and it's clear from the data that savings are possible. This article will speak of cost savings in general and leave it to IT departments to chart their specific percentages.

Saving variable costs
Installing new servers often calls for a tedious process of testing configurations prior to going online. One of the advantages of VMware is that it enables IT departments to test hardware and software configurations without risking damage to the host machine. Using VMware can save labor costs related to testing, because when a virtual machine crashes, it can quickly be rebooted or reinstalled. The virtual disks (files with the filename *.vmdk) are easily copied, moved, backed up, and restored.

In the case of server hardware upgrades, since VMware translates between the host hardware and the guest operating system, it's easy to move a virtual disk to new hardware without extensive reconfiguration. The following example, though based on a workstation, demonstrates this ease of configuration and deployment:

I run both Red Hat Linux 7.3 and Windows 98 SE within Windows 2000, through two instances of VMware Workstation. Should I decide to add new devices or change the amount of RAM installed, all I would need to do is open the VMware Configuration Manager and make updates. Should I want to move my Red Hat setup to another machine, I would simply copy the .vmdk file, open it on the new host operating system within VMware, and configure any hardware changes. In contrast, repairing or reinstalling the host workstation and its operating system, or setting up an OS under new hardware, could take hours of work, even days.

Saving fixed costs
Fixed-cost savings occur when installing multiple guest operating systems on the same hardware. This type of installation saves the costs of separate hardware. It allows you to invest once in the best hardware you can afford—for example, in the best server, CPU, monitor, video card, sound card, RAM and hard drives—and use it for all guest systems. Savings increase as the scale of the operation increases. In businesses with many custom applications and a mixed-OS environment, the ability to run several operating systems and even incompatible applications on the same machine, or even applications used by different customers, results in savings. Such a company's help desk staff will benefit from the ability to quickly switch between OSs and even replicate Blue Screen of Death customer problems without risking a test machine.

The bigger, the better
If the scale is large enough, the high cost of VMware Server licenses is more than compensated for (GSX Server costs $3,025 per license for a two-CPU server and $6,050 for a four-CPU server). Also, VMware licenses include a year of support and upgrades.

In one 2002 case study provided by VMware, an e-business training lab (it wasn't named) reported savings of $25,000 for rack mounts and associated installation hardware. It installed VMware Server on 16 desktops (instead of building 16 servers) in order to emulate a server environment. The company spent $40,000 on hardware and RAM upgrades necessary to run the virtual machines. It saved slightly less than one-third of the $144,000 cost of 16 servers. The e-business training lab case study also claimed annual savings of $10,000 in electricity bills, $20,000 in maintenance, $35,000 in setup costs, and $42,500 in IT personnel costs.

Another company used VMware Server software for application development, testing, and production of three-tier applications (applications in which a client user interface is connected to two servers, one to run the business application and one to store the data). The company's consolidation plan reduced the number of hardware servers by eight, from 14 to six, and met its ancillary goal of decreasing the time taken to reset the server environment (down from one-and-a-half hours to about 10 minutes per reset), saving an estimated 400 hours and $13,400 in labor during the year.

VMware savings can add up
While you should retain a healthy skepticism for the high TCO savings you might realize using VMware server products, these case studies do reveal significant possible savings in utilities, IT staff time, and downtime that can result in lost business. And don’t forget the hardware and maintenance costs savings, especially for companies that have an excess of servers they can consolidate.
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