Overview & Sample Analysis - VMware ROI TCO Calculator

VMware ROI TCO Calculator: 

Overview & Sample Analysis 

© 2011 VMware Inc. All rights reserved

Table of Contents 

� Calculator Overview 

� Sample analysis: 

• Expected ROI/TCO analysis (forward looking) 

• Realized ROI/TCO analysis (backward looking) 

• Hybrid ROI/TCO analysis (mix of backward & forward) 

� Addi Additional i l Resources 

R 

2

VMware products covered 

Journey & 

Products 

3 

2 

1 

Cloud Services vCloud 

Delivery 

Desktop 

Vi t li ti 

SSavings i CapEx OpEx Business Agility 

Server HW Storage HW Networking 

HW 

Infrastructure 

Admin 

Productivity 

Power & 

Cooling 

Rack Space 

& Office 

Space 

Planned 

Downtime 

Unplanned 

Downtime 

Business 

Downtime 

Director $ $ $ $ $ $ $ 

Chargeback 

View 

$ $ $ $ $ 

Virtualization $ $ $ $ 

Business 

Continuity & 

Disaster 

Recovery 

Operations 

Management, 

Security & 

Compliance 

Server 

Virtualization 

Site 

Recovery 

Manager $ $ $ 

CapacityIQ 

AppSpeed 

vShield App 

$ $ $ $ $ 

$ $ 

& Edge $ $ $ 

vSphere & 

vCenter 

Server 

$ $ $ $ $ $ $ $ $ 

� “$” represents possible savings 

• Supported by succinct modules within calculator to help users evaluate 

3

Methodology 

4 

Total Cost 

Before 

minus 

Total Cost 

After 

equals Savings 

� There are two main outputs for this calculator: 

• Return on Investment 

• Equals Savings / Investment 

• …where investment represents the sum of incremental investment 

in transition from physical to virtual (new servers, shared storage, 

VMware licenses, services and training, etc.) 

• Total Cost of Ownership 

• Inclusive of IT Administration and downtime costs

Design & Scope 

� DDesign i 

• We are striking a balance between simplicity and credibility 

Simplicity 

Too complex, and the 

analysis becomes difficult 

to explain and repeat 

Too Simple and 

customers will not find Credibility 

outputs credible 

• Cash basis: no depreciation, amortization, time value discounting 

• Standardized time horizon: 5 year analysis 

� Scope 

5 

• ROI TCO Calculator is not meant to generate a definitive bill of goods 

• Our goal is to provide a credible understanding of cost and benefits 

• Users may need to engage additional resources (sales / finance) for transactions that 

require more custom models

Return on Investment (ROI) 

� % return t on iinvestment t t required i d to t transition t iti to t virtualized i t li d 

infrastructure 

6 

Total Savings 

• CapEx 

• OpEx 

• Downtime 

…reference slide 3 for more detail 

Total Investment 

• New Servers, Storage, 

Network Switches 

• VMware License & Support 

• Services & Training 

1

Total Cost of Ownership (TCO) 

� CCosts t associated i t d with ith operation ti of f datacenter 

d t t 

7 

CapEx p 

• Servers 

• Storage 

• Network Switches 

OpEx 

• Power & Cooling 

• IT Administration Labor 

• Rack Space 

Business us ess Agility g ty 

• Planned Downtime 

• Unplanned Downtime 

• Business Downtime

Workflow: Server Virtualization 

Start / Login 

MMy AAnalysis l i 

(create or open prior 

analysis) 

8 

Server 


1) Server 

Configuration 

2) Server 

Consolidation 

3) Product 

Selection 

4) Beyond Server 

Consolidation 

5) ROI 

Define configurations of 

physical servers, count of 

workloads, and consolidation 

ratio 

Modules for 5 basic datacenter 

elements: Server HW, Power & 

Cooling, Storage, Networking, 

Rack Space 

Select edition of vSphere / 

vCenter Server, and define 

level of SnS, discounts, input 

historical or ELA data 

Based on edition of vSphere p 

selected, calculator provides 

additional modules to review 

benefits of advanced features 

Summary of vSphere & vCenter 

Server Investment, Savings, 

ROI and estimated Payback 

Period over 3 years and 5 years 

� 

� 

� 

� 

� 

Capacity IQ 

AppSpeed 

vShield App & 

Edge 

Site Recovery 

Manager 

vCloud Director 

& Chargeback 

Choose to include additional 

management products. Product 

calculations leverage prior inputs 

and provides incremental ROI/TCO 

End / Analysis 

Summary 

(charts, tables, export)

Workflow: Desktop Virtualization 

Start / Login 

MMy AAnalysis l i 

(create or open prior 

analysis) 

9 

Desktop 


1) Desktop 

Configuration 

2) Desktop 


3) Product 

Selection 

4) Premier Edition 

Advanced 

Features 

5) ROI 

Define configurations of 

physical servers, count of 

workloads, and consolidation 

ratio 

Modules for 5 basic datacenter 

elements: Server HW, Power & 

Cooling, Storage, Networking, 

Rack Space 

Select edition of vSphere / 

vCenter Server, and define 

level of SnS, discounts, input 

historical or ELA data 

Based on edition of vSphere p 

selected, calculator provides 

additional modules to review 

benefits of advanced features 

Summary of vSphere & vCenter 

Server Investment, Savings, 

ROI and estimated Payback 

Period over 3 years and 5 years 

*Please Note: 

• Desktop Virtualization must be 

selected during New Analysis 

Creation 

• UUsers will ill not t be b able bl tto add dd 

Desktop Virtualization to an 

existing Server Virtualization only 

analysis later 

End / Analysis 

Summary 

(charts, tables, export)

Module Elements 

Example: Server Virtualization > Power & Cooling 1 Summary table, with key metrics, 

updates as users make changes and 

completes each module 

10 

3 

4 

5 

6 

8 

7 

1 

2 

2 

3 

4 

5 

6 

7 

8 

Key assumptions for each module are 

distilled and grouped together in 

hidden assumptions tab—click to 

unhide 

Scenario A represents extension of 

environment without benefit of 

vSphere 

Scenario B represents environment as 

users transition workloads to 

virtualized infrastructure 

(A – B) is the variance in Costs 

calculated in two scenarios, and 

represents savings for module 

Each module has a text box at the 

bottom to provide some context to 

module module analysis and or assumptions 

Links along the bottom direct users to 

additional resources 

Go to Analysis Summary for 

supporting charts and tables, including 

Green Savings, and Cost per App 

comparison to competing platforms. 

Users will also find document export 

functions here








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Server Virtualization 

1) Server Configuration 

12 

1 

2 

3 

4 

1 

2 

3 

4 

Define number of workloads and 

configuration of host servers assuming 

no virtualization (Year 0) 

Define number of workloads and 

configuration of host servers assuming 

100% virtualized 

Max Consolidation Ratio is a key part 

of this analysis… 

…Open assumptions tab and adjust 

VM’s per Core variable to refine. 

There is also an option here to change 

analysis to one based on leased 

servers (avg price per server then 

represents the annual lease cost)


2) Server Consolidation > Server Hardware (part 1) 

13 

1 

3 

1 

Number of workloads defined in 

previous module is the starting number 

in this module. Refine number of 

workloads thru Year 5 in Assumptions 

tab: 

• Change annual growth rate (linear) 

• For non-linear growth, locate switch 

for “manually adjust count of 

workloads”, change to “yes”, close 

tab tab, and input values into module 

2 By default, analysis assumes 100% 

refresh based on average useful life 

and average age assumptions. Define 

a staggered refresh if necessary in 

2 Assumptions tab: 

3 

• Locate switch for “manually adjust 

count of servers retired”, change to 

“yes”, close tab, and input values 

into module 

By default, analysis assumes 100% of 

workloads are migrated to virtualized 

infrastructure in Year 1. Adjust % 

virtualized to define a different 

schedule for migration



14 

2 

1 

3 

1 

2 

3 

Manually adjust count of workloads 

• By default, calculator assumes a 

linear workload growth rate—first 

assumption at the top of 

assumptions tab 

• For non-linear growth, locate switch 

for “manually adjust count of 


tab, and input values into module 

Manually adjust count of host servers? 


constant consolidation ratio each 

year, post-virtualization 

• To define a changing consolidation 

ratio each year, change to “yes”, 

close tab, and input values into 

module 

Manually adjust host servers retired? 

Caution: enabling all three functions adds 

great deal of flexibility to customize analysis, 

• By default and for simplicity, 

calculator uses useful life and 

average age assumptions to 

determine 100% refresh of servers 

but calculator may not be able to guarantee 

• TTo define d fi a staggered t d refresh f h (eg. ( 

logic in module is correct under all scenarios. 

1/3 of starting count of servers, 

Users will be required to review to ensure 

spread out over three years), 

changes lead to desired results. 

change to “yes”, close tab, and input 

values into module


2) Server Consolidation > Server Storage (part 1) 

15 

1 

1 

1 

2 

1 

2 

In addition to the GB’s of data store, 

this section also incorporates 

additional hardware required for 

different protocols of storage: 

• Fibre Fibre-Channel Channel SAN requires server 

HBA’s and SAN Switches 

• iSCSI SAN requires server TOE 

cards 

• NAS will not require additional HW 

Financial impact of GB’s of data store 

are calculated toward the bottom of 

each scenario


2) Server Consolidation > Server Storage (part 2) 

16 

2 

1 

3 

2 

1 

1 

2 

3 

Users can define the transition to and 

increased shared storage 

environment. Many of vSphere’s 

advanced features such as vMotion 

and Distributed Resources Scheduler 

are enabled by and require shared 

storage. Depending on whether the 

environment in this analysis starts with 

no shared storage or already has 

shared storage, the transition to a 

virtualized infrastructure with 100% 

shared storage, may require significant 

investment in additional hardware (FC 

SAN and iSCSI SAN). Two areas for 

users to define if there will be shared 

storage, and the degree of the 

transition 

Next, users can select applicable 

shared storage protocols, and define 

the mix (input box(es) for %’s) to the 

right 

Important for users to specify the 

average size of workloads in the 

lower-left corner of assumptions tab. 

Here too, users can choose to include 

storage savings from Thin Provisioning 

ffeature t within ithi vSphere S h (zero ( out t if not t 

applicable, or leveraging at the storage 

array level)


3) Product Selection > vSphere edition selection (part 1) 

17 

1 

1 

Cycling through each vSphere edition 

in the list box, users will be able to see 

which advanced features are included 

below



18 

3 

1 

2 

1 2 

1 

2 

Select the level of Support & 

Subscription and define number of 

years 

Define any applicable discounts 

(standard discounts available for 

government agencies and academic 

institutions) for license and SnS 

For Enterprise License Agreements 

(ELA’s), enable checkboxes above to 

input contract amounts into input 

boxes below. 

• For a $200,000 three year ELA, 

enable checkboxes above Years 1 

to 3, and input $200,000 into Year 1 

• Based on growth of workloads 

defined in Server HW section, 

calculator will then estimate 

additional licenses and SnS required 

for Years 4 and 5 

• To exclude calculator estimates for 

Years 4 and 5, enable checkboxes 

for those years--the default value for 

input boxes once enabled is zero



19 

2 

2 

3 

1 

1 

Unhide assumptions tab to 

select/deselect and or adjust cost of 

services and training through Planning 

and Design 

2 For annual services such as P2V 

Acceleration and Health Checks, users 

will be able to adjust cost per server to 

derive total cost for each year with 

input boxes in main module 

3 

If PSO credits are applicable, applicable enabling 

input boxes at the bottom of main 

module will over-ride itemized costs 

calculated above


4) Beyond Server Consolidation > Server Provisioning Labor 

20 

2 

3 

1 

1 

2 

3 

Unhide assumptions tab to adjust 

assumptions regarding labor savings 

from faster provisioning 

Labor savings, calculated as the 

difference between labor required with 

and without vSphere virtualization, is 

the first value calculated 

Faster provisioning translates into a 

reduction in end-user wait time. This 

is the value of Business Agility Agility. 

Default assumption is that 40% of 

reduction in time spent on provisioning 

is returned to the business


4) Beyond Server Consolidation > vMotion 

21 

2 

1 

1 


assumptions regarding downtime 

savings from planned server 

maintenance events 

2 Planned Downtime savings, savings calculated 

as the difference between downtime 

required with and without vSphere 

virtualization, is the value calculated


4) Beyond Server Consolidation > Storage vMotion 

22 

2 

1 

1 



savings from planned storage array 

maintenance events 

2 Planned Downtime savings, savings calculated 

as the difference between downtime 

required with and without vSphere 

virtualization, is the value calculated


4) Beyond Server Consolidation > High Availability & Fault Tolerance 

23 

3 

2 

4 

1 

1 

2 



savings from unplanned events 

• High Availability does not require 

any additional capital expenditures 

expenditures, 

and helps to automatically restart 

servers due to OS or HW failures 

• Downtime savings from virtualization 

and High Availability are not always 

positive due to consolidation ratios ratios— 

when a virtualized host server fails, 

it will bring down multiple workloads 

which may not be completely offset 

by ability to restart VM’s faster 

3 • This downtime can be fully mitigated 

with Fault Tolerance (FT) for 

mission critical workloads, but 

requires additional servers to host 

live shadow VM’s for failover— 

additional capital expenditures are 

calculated when FT is enabled in 


4 

Application downtime mitigated 

translates into a reduction in end-user 

wait time. This is the value of 

Business Agility. Default assumption 

is that 40% of reduction in downtime 

savings is returned to the business


4) Beyond Server Consolidation > Distributed Power Mgmt 

24 

2 

1 

1 

2 


assumptions applicability of distributed 

power management to further 

consolidate inactive workloads and 

power down excess servers during 

nights and weekends 

Incremental Power & Cooling savings 

calculated here


4) Beyond Server Consolidation > Server Admin Labor (part 1) 

25 

2 

3 

1 

1 


assumptions regarding labor savings 

from advanced management features 

in vSphere 

2 Labor savings savings, calculated as the 

difference between labor required with 

and without vSphere virtualization, is 

the first value calculated 

3 

Faster administration translates into a 

reduction in end end-user user wait time time. This 

is the value of Business Agility. 


reduction in time spent on 

administration is returned to the 

business


4) Beyond Server Consolidation > Server Admin Labor (part 2) 

26 

2 

3 

1 

1 

2 

3 

The number of Workloads per FTE 

Administrator, regardless of silo 

(server, storage, network, application, 

etc.), is the measure of administration 

productivity here. Most VMware 

customers have already virtualized a 

portion of their datacenters, and can 

readily speak to the difference 

productivity—input values here. 

For users who are new to 

virtualization, we have surveyed 

customers and VMware’s own IT 

Administrators, and have provided a 

way to calculate incremental added 

productivity from various advanced 

management features available in 

vSphere Enterprise+. Enter the 

“Existing – unvirtualized” metric in 

section 1, and adjust values in section 

2 to derive metric for “New – 

virtualized.” 

Faster administration translates into a 

reduction in end-user wait time. This 

is the value of Business Agility. 


reduction in time spent on 

administration d i i t ti iis returned t d tto th the 

business


5) ROI (part 1) 

27 

2 

1 

3 

1 

2 

3 

The final module in Server 

Virtualization provides details into the 

ROI starting with required Investments 

at the top. For VMware Software 

License & Support in this example, 

$ $129K of spend is required in Year 1. 

Then depending on time horizon (3 

Years vs. 5 Years), users can see 

additional spend required for Years 2 

and beyond, due to workload growth 

defined in Server Hardware module. 

Users will find input boxes for Other 

Investments not accounted for in the 

calculator. Also, should there be any 

sales tax considerations, tax rates can 

be adjusted here. 

Click on this button to bring up menu 

of additional server virtualization 

management products to add to 

analysis: 

• CapacityIQ 

• AppSpeed 

• Site Recovery Manager 

• vShield Edge 

• vShield Endpoint 

• Chargeback 

• vCloud Director


5) ROI (part 2) 

28 

1 

2 

3 

1 

2 

3 

Towards the bottom half of this 

module, users will find detail on 

Savings calculated 

Users will also find input boxes for 

Other Savings not accounted for in the 

calculator 

Finally, Investment and Savings 

enable for the calculation of ROI as 

well as Payback Period


Analysis Summary 

29 

1 

2 

1 

2 

Analysis Summary provides additional 

charts and tables to collect and 

present results of all products 

reviewed 

• Cumulative Investment Investment, Savings & 

ROI provides a view into results, 

each year, over the 5 year analysis 

horizon 

• Distribution of Savings: 5 Year Total 

provides a quick snapshot of where 

users can expect to savings 

• Distribution of Investment: 5 Year 

Total provides a quick snapshot of 

where users will need to invest 

• Total Cost of Ownership: 5 Year 

Total (1) compares CapEx, OpEx, 

and Other (downtime, tax, other 

user-defined costs) expenses 

between a fully Physical datacenter 

and one with the benefits of 


• Total Cost of Ownership: 5 Year 

Total (2) again compares CapEx, 

OpEx and Other expenses, but with 

expanded d dgranularity l it 

Charts Data provides all back-up data 

behind charts








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31 

1 

1 

For a Realized ROI analysis a key 

assumption is the virtualization 

schedule that defines how many 

physical workloads are transitioned to 

virtual machines each year 

Adjust percentages until count of 

workloads matches known history



32 

2 

1 

3 

1 

2 

3 

Manually adjust count of workloads 


linear workload growth rate—first 

assumption at the top of 


• For non-linear growth, locate 

switch for “manually adjust count of 


tab, and input values into module 

Manually adjust count of host servers? 


constant consolidation ratio each 

year, post-virtualization 

• To define a changing 

consolidation ratio each year, 


values into module 

Manually adjust host servers retired? 

Caution: enabling all three functions adds 

great deal of flexibility to customize analysis, 

• By default and for simplicity, 

calculator uses useful life and 

average age assumptions to 

determine 100% refresh of servers 

but calculator may not be able to guarantee 

• TTo define d fi a staggered t d refresh f h ( (eg. 

logic in module is correct under all scenarios. 

1/3 of starting count of servers, 

Users will be required to review to ensure 

spread out over three years), 

changes lead to desired results. 


values into module



33 

1 

1 

To input historical spend for VMware 

Software + SnS, toggle check boxes to 

enable applicable input boxes 

• For a three years of history with 

$50 $50,000 000 in spend each year year, enable 

checkboxes above Years 1 to 3, and 

input $50,000 into Years 1, 2 and 3 



for those years years--the the default value for 

input boxes once enabled is zero 

• If analysis is expanded to include 

server management products, 

include historical costs of those 

products here and set discounts to 

100% in respective management 

product modules to zero out 

additional calculator spend 

estimates



34 

1 

1 

To input historical spend of Services + 

Training, toggle check boxes to enable 

applicable input boxes 







for those years years--the the default value for 

input boxes once enabled is zero


Analysis Summary (part 1) 

35 

1 

1 

In Analysis Summary > Charts Data > 

Distribution of Investments, users can 

verify that inputs of historical spend for 

VMware Software + SnS and Services 

+ Training have been aggregated 

accurately by the calculator



36 

1 

2 

1 

In Analysis Summary > Charts > Chart 

1, Realized results (Investment, 

Savings, ROI) for Years 1, 2 and 3 are 

graphed 

2 Cumulative results for three years of 

history can also be found in small 

upper-right table, in the Over 3 yrs. 

column








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37



38 

1 2 

3 

1 

2 

3 

To input historical spend for VMware 

Software + SnS, toggle check boxes to 

enable applicable input boxes 





Leaving Years 4 and 5 unchecked will 

enable the calculator to estimate 

additional cost of vSphere and vCenter 

Server required for those years based 

on workload growth and virtualization 

schedule defined in Server Hardware 

Be sure to define any applicable 

discounts for Years 4 and 5 or 

calculator will estimate costs at list 

price



39 

1 2 

$ 92,324 

1 

2 

To input historical spend of Services + 

Training, toggle check boxes to enable 

applicable input boxes 





Leaving Years 4 and 5 unchecked will 

enable the calculator to estimate 

additional cost of services required 

based on selections defined in 

Assumptions Tab (unhide to adjust) 

In this case, the annual vSphere 

Health Check was selected, and 

incremental costs of $62 $62,324 324 have 

been added to the original $30,000



40 

1 

1 

In Analysis Summary > Charts Data > 

Distribution of Investments, users can 

verify that inputs of historical spend 

and calculator estimates for VMware 

Software + SnS and Services + 

Training have been aggregated 

accurately by the calculator



41 

1 

2 

1 

2 

In Analysis Summary > Charts > Chart 

1, Realized results (Investment, 

Savings, ROI) for Years 1, 2 and 3 are 

graphed. 

Results for Years 4 and 5 include 

projections of additional investments 

and savings 

Cumulative results over 3 years and 

over 5 years can also be found in 

small upper-right upper right table








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Additional Resources 

� ROI TCO Calculator Website: roitco.vmware.com 

� Frequently Asked Questions: FAQ document 

� Feedback & Questions: roitco.vmware.com/vmw/account/FeedbackQuestions 

43

Overview & Sample Analysis - VMware ROI TCO Calculator

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