Server virtualization is one of the best ways for IT managers to meet cost savings goals, and most are well underway with thier virtualization programs.


Microsoft's Hyper-V is a little late to the game, but as less funds are available to invest in virtualization programs, many are taking a hard look at the licensing costs for thier virtualization software, and considering Hyper-V as a way to acheive the cost savings of virtualization (a average of $8,000 per physical server consolidated per year) for minimal investment.


Microsoft offers a compelling initial value proposition with Hyper-V and System Center Virtual Machine Manager, integrating virtualization and virtualization management in tools that most Windows server managers are very familiar with, have license rights to, and for what Microsoft claims is 30% less costs than competitive solutions.



In these analyses, Microsoft indicates that consolidation ratios / performance are on par between competitive solutions, meaning that you cannot get more consolidation with one solution versus another.



Verifying the performance claims is difficult for us as we don't have a benchmarking lab, so we will let others fight out who can provide more consolidation and feature by feature accounts, As Even though we are not verifying these particular claims, we don't won't to discount the importance of these claims the value analysis and should be verified by organizations who wish to compare the solutions, particularly with the selected target host configuration and specific workloads.




What we did do is model the licensing and implementation cost advantage claims independently, comparing typical environments and using list price for all competitive licenses and Open pricing for Microsoft (available to most organizations). It should be noted that license discounts are available from Microsoft and the competition and should also factor into your own analysis.



In very small server environments of 10 or less, for organization that need to implement a new System Center infrastructure overhead (requiring at least one additional server, and more depending on the configuration) the cost of the Microsoft deployment per server is more than in larger environments, and we found that 10% licensing cost and infrastructure savings was all that could be acheived. Advantage Microsoft, but not by much.



However, in environments of 20 servers or more, 20 to 30% licensing and infrastructure cost savings was indeed the normal cost differential between Microsoft and the competition. Advantage Microsoft.



As TCO studies have taught us however from the time Bill Kirwin first developed these models for Gartner, it is important to look not only at purchase cost of the solution, but the ongoing costs over the entire ownership lifecycle. To help keep on-going costs lowe, Microsoft's competitors have delivered some powerful management tools and utilities to help keep the cost of managing the virtual environment as low as possible (upgrade management, lifecycle management, live update, etc.). While Microsoft has virtualization integrated in the operating system, and integrating VMM into System Center making the administration of the environment simple for anyone familiar with managing the environment, the lack of more powerful management features gives the nod to the competition, making the ongoing VM managament less expensive, particularly for dynamic environments. Advantage to the competition.



Do these features yield cost savings that make the purchase price savings moot? Every environment is unique so it is important to understand first the purchase cost differences for the competitive solutions. Then calculate the potenital additional benefits of the management features and see if the virtual management TCO advantages make up for the cost savings.

In all of this:

1) use your own testing to determine if consolidation ratios and capabilities of the core hyperserver are the same.

2) Work with each vendor to understand the roadmap of future capabilities, as you will be living with and expanding your virtualization environment, and your selection of the best partner to reduce TCO is important not only in gaining immediate cost savings, but even larger capabilities as your virtualization initiatives expand to encompass all data centers, workloads, development / qa labs and virtual desktop.



For your own cost comparison you can use this helpful tool to compare licensing costs (be sure to review the configurations and put in your own unique pricing proposals from the vendors):
http://www.microsoft.com/virtualization/tco-roi.mspx

As one source for determining if competitive features can deliver cost advantages to make up for licensing deltas, use the following:
http://www.microsoft.com/virtualization/tco-roi.mspx