Project Management

The Economics of Virtualization: Moving Toward an Application-Based Cost Model

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Executive Summary

Server virtualization technologies have quickly become the default platform for today's datacenters. IT organizations are putting in place formal virtualization deployment policies and are strongly incenting application owners to use virtualized servers rather than offer standalone, dedicated servers on a per-application basis. In fact, IDC estimates that more than 50% of all server workloads today are deployed in a Virtual Machine (VM). As a result of this adoption, customers are now rethinking their approaches to quantifying the up-front and ongoing management costs associated with supporting their new virtualized server environment. Leading IT organizations are switching from the traditional server-based cost model to an application-based cost model because many applications, each in their own virtual machine, can now run on a single server.

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