Organizations implement or plan to implement virtualization for benefits such as cost savings, improved server utilization and to reduce hardware. Many of these benefits can be limited by problems caused by the additional complexity of management, configuration, monitoring, and reporting caused by the new layer of abstraction and the additional complexity it can cause.

 

Given the ease of creating new VMs and how dynamic most virtual environments are, it can be very difficult to manage manually using raw information provided by the hypervisor. As a result, one simple way to increase the return on investment is to adopt an automated virtualization management tool such as SolarWinds’ Virtualization Manager. A tool will aid in configuring, monitoring, and managing virtual servers. Moreover, a virtualization management tool automates the process of data collection and report generation (CPU usage, storage, datastores, memory usage, network consumed, etc…). Thus reducing the time and effort invested on manual processes of monitoring and administration.

 

All organizations consider time and money as valuable factors.  A virtualization management tool reduces both time and money spent. Some factors are:

  • Reduced number of admins needed to manage VMs
  • Faster problem resolution reducing downtime
  • Foresee upcoming issues and assist in proactive troubleshooting
  • Avoid VM sprawl and improve resource utilization
  • Reporting made easier and faster

 

Now, let’s take a look at some return on investment figures with examples that explain how a virtualization management tool reduces both time and money spent.

Consider an organization with 500 VMs running on about 50 hosts with 100 sockets (i.e., 2 sockets/ host). With an average of only 5 VMs per socket or CPU (it can easily be higher), you would get a system of about 500 VMs to manage. Below we look at some of the key factors driving cost and efficiency of the system and the potential cost implications of not having a management system.


Uptime:

Adopting a virtualization management tool in an organization definitely increases uptime, as the tool aids in faster problem resolution. Also, virtualization management tools can help foresee or predict the most pressing issues and, in turn, increase the uptime of VM servers.

According to this EMA whitepaper, the average uptime for a virtual environment is 99.5%. Utilizing a virtualization management tool easily increases uptime to 99.95% with best in class operations achieving 99.999%.


VM sprawl:

VM sprawl occurs when VMs are created and left without proper management. This situation causes bottlenecks in system resources and can lead to performance problems as well as the economic impact of wasted resources. Keeping track of IOPS, network throughput, memory, and CPU of the VM helps find VM sprawl. A virtualization management tool helps identify idle or zombie VMs and can eliminate resource waste in the organization.

An article by Denise Dubie using data from an Embotics study provides estimates that an organization with 150 VMs has anywhere from between $50,000 to $150,000 locked up in redundant VM’s. This includes costs from infrastructure, management systems, server software, and administration resources and expenses.


Admin headcount:

A VM admin should configure, monitor, and manage VM servers. To get the best VM performance, admins should configure the VM with only resources (processors, memory, disks, network adapters etc.) required by the user. A virtualization management tool will help monitor the performance (such as CPU utilization, VM memory ballooning, memory utilization etc.) of the configured VM servers.

Without a VM management tool in place, admins face constant challenges with monitoring VM environments. Some of these challenges include:

  • Identifying bottleneck issues, especially ones related to storage I/O. Identifying CPU and memory issues are fairly simple, however if the issue is a bottleneck with storage it can be difficult. This is because storage issues can stem from various metrics (slow disk, a lot of network traffic, a lot of VM’s on a SAN volume, etc.).
  • Monitoring usage trends, system availability, and resource bottlenecks. For these results, admins should correlate data from multiple places.
  • Storage allocation is also an on-going challenge when it comes to VM management.

 

Finding the true problem without a VM management tool can be a nightmare. A virtualization management tool provides insight into VM performance, delivers key metrics, visibility to root causes of resource contention, and optimizes virtual environments. A study by EMA indicates that on average a virtual admin can manage 77 VMs without a virtualization management tool. Conversely, experts say that virtual admins can manage up to 150 VMs with a virtual management tool in place. Moreover, this means that business will scale more easily with existing staff.

Also, do not forget the expense of downtime represented by MTTR (Mean Time to Repair) problems. Extra admins are required when an issue occurs. According to VMware®, it takes 79 minutes for an admin to fix an issue without a virtualization management tool and 10 minutes with a tool, thus reducing the downtime in a VM environment. Also, a virtualization management tool reduces the dollars paid to an admin as the time needed to resolve the issues lowers. 99.5% uptime a year means 43.8 hours of downtime per year and with a virtualization management tool the uptime is increased to 99.95 (4.4 hr downtime/ year). Assuming the average cost is $50/hour for two IT administrators to identify and solve each problem, an organization will pay $4380.00 (downtime *admin’s labor charge per hour (2*43.8*50)) in direct labor for virtual troubleshooting without a virtualization management tool, compared to $440.00 (2*4.4*50) with a virtualization management tool for an annual savings of $3940.


Revenue:

It’s important to consider how revenue as an outage/downtime will impact revenue. Revenue differs from one organization to another. Based on the report from National Centre for the Middle Market at Ohio State University, most of midsize organizations revenue is between $10m and $1 billion per year. Organizations these days are heavily dependent on their IT environment. During VM downtime, let’s assume the organization loses half of its revenue earned during that time period. Consequently, a loss of $571 per hour occurs (assuming an organization with revenue of $10m/ year) when the VM environment fails.

Using publicly available data sources, we compiled the data to estimate the type of savings that could be possible using an automated virtualization management tool. We then compared it to manually managing the virtual environment using virtual infrastructure/hypervisor information. The virtualization management software licensing costs are based on SolarWinds Virtualization Manager published prices and may be higher for other management products.


Table 1 -Estimated Cost Savings with Virtualization Management (based on a 500 VM environment):

 

CategoryQuantityQuantity UnitsCost Per UnitCost UnitsCost ($/yr)Comments
No virtualization management tool
Downtime
  1. 43.8
hr / year$571 per hour$24,999
VM sprawl500VM's$50K per 150 VMs$166,665 150 VMs will have $50,000 to $150,000 lost in VM sprawl. So let’s take the minimum $50,000. Hence $333 per VM.
Admin's  daily routine6persons$50 per hour$360,000 50 weeks x 5 days x 8 hrs x $50/hr *number of admins= (100000 * number of admins)
Admin's - to work on issues
  1. 43.8
hrs$100 per hour/2 admin$4,380 # of hours downtime* number of admins * cost per unit/hour
Total$556,044
1st year of virtualization management tool
Downtime
  1. 4.4
hr / year$571 per hour$2,511
VM sprawl500VM's$41,666 And with a VM management tool assume VM sprawl will decrease to 25%
Admin's - daily routine3persons$50 per hour$180,000 50 weeks x 5 days x 8 hrs x $50/hr*number of admins= (100000 * number of admins); VMs per admin ~ double from 77/adm to 150/adm
Admin's - to work on issues
  1. 4.4
hrs$100 per hour/2admin$440# of hours downtime* number of admins * cost per unit/hour
Cost virtualization management tool (SolarWinds)$23,995 List price of a VM112 license (up to 112 sockets) for SolarWinds Virtualization Manager
Total$248,612
2nd year onwards of virtualization management tool
Downtime
  1. 4.4
hr / year$571 per hour$2,511
VM sprawl500VM's$41,666 And with a VM management tool assume VM sprawl will decrease to 25%
Admin's - daily routine3persons$50 per hour$180,000 number of admins * cost per unit/hour *8 hours * 365 days
Admin's - to work on issues
  1. 4.4
hrs$100per hour/2 admins$440# of hours downtime* number of admins * cost per unit/hour
Maintenance cost virtualization management tool ( SolarWinds)$4,799Estimated annual maintenance charge
Total$229,416

 

Using this data, Table 2 provides a summary of cost savings estimated at $307K for the first year, and slightly more for the second year with a very strong ROI.


Table 2 - Virtualization Management Estimated Savings


Virtualization Management Estimated Savings
Costs with No VM Mgmt Baseline$556,044
Cost with VM Mgmt - Year 1$248,612
With VM Mgmt - Year 1 Savings$307,432
Year 1 ROI12.8
Cost with VM Mgmt - Year 2+$229,416
With VM Mgmt - Year 2 Savings$326,628
Year 2 ROI

68.1


While these costs will vary for each company, they help illustrate how quickly an automated virtualization management tool can pay for itself. Using a similar methodology, a company could plug in alternate values that are applicable to their situation to customize the estimate for their company. These ranges may be high, but the opportunity to produce meaningful savings is certainly there and as a result it’s probably worth the effort to evaluate potential savings in your environment.

 

To conclude, new VMs are constantly created and become even more dynamic, making it very difficult to manage manually. The facts and numbers indicate there’s a substantial upside to utilizing a virtualization management tool. You can find out more about SolarWinds’ Virtualization Manager on our product page.