One of the main drivers for a move to Cloud Services is the cost savings that can be realised through server consolidation and the replacement of hardware servers with virtual machines. The savings virtualisation delivers can be split into capital cost savings and operational cost savings.
Capital Cost Savings
Capital cost savings come in the form of reduced expenses for hardware acquisition and potential savings for the data centre estate.
• Server Hardware. Moving to a virtual environment helps cut capital costs by reducing the number of physical servers necessary to support your infrastructure. Typically server utilisation is between 10 and 15%. Consolidation ratios of up to 10:1 are therefore possible, leading to a reduction in expenditures of significantly greater than 50%.
• Storage Hardware. Data storage can also be consolidated. Through the use of pools of shared storage, and the more efficient allocation of storage, utilisation rates can be increased from less than 25% to as much as 80%.
Operational Cost Savings
In a virtualised environment, operational cost savings are also substantial. These savings result from a reduction in power and cooling costs, management costs and the costs associated with server downtime.
• Power and Cooling. The reduction in the number of physical servers enables escalating costs of power and cooling to be kept in check. Measured over 3 years the savings will be significant.
• Server Provisioning & Support Cost and Time Savings. Virtualisation enables servers to be deployed much faster, from weeks to days and even hours. This frees up staff time to work on more strategic IT projects such as application development. With fewer servers to maintain, staff time is further freed up. It could be that the profile of staff can be changed to have less of a focus on support and more of a focus of developing systems that drive business efficiencies.
• Server Downtime. There are significant cost reductions attributable to virtualisations ability to reduce planned and unplanned downtime. By moving Virtual Machines from one platform to another, either as a planned change or unplanned via a high availability configuration, the resulting reduction in downtime and improved recovery times reduces business losses.
These are just some of the ways virtualisation drives cost savings. Server virtualisation often leads to total savings across capital and operating costs of 50% over a three year period.