As I posted last week, a lot of businesses are guilty of using virtualisation for the sake of it, rather than weighing up the advantages and disadvantages to see what benefit it will, or will not, bring. We'll start with a few of the main areas that I have come across as reasons for virtualisation:
- Saves money
- Maximises hardware utilization
- Easier to support
- Enables rapid (or agile) deployment
In all cases, these reasons can be right or wrong depending on the application of the technology. I have tried to keep this bit, as far as possible, technologically independent (meaning it can be applied to any virtualisation solution). This week I'm only going to talk about the first one of these, Saves Money, mainly because there is a lot to say about it. This is the one that management like to see in the 'benefits' column of a spreadsheet and, let’s be honest, everyone likes saving money. There are generally three areas where the cost savings from virtualisation may save you money, which are again all subject to how the technology is being used: Hardware costs The logic here is pretty straight forwards, if you can take a platform that would have been 10 machines and fit it onto a single server then you will have saved yourself a stack of cash. There are other considerations here as well however. The first is would you need to buy new hardware, and effectively write off your old kit? If this is the case then you are spending money, not saving it. You may be able to mitigate this by re-using the older hardware in another application or maybe your old kit is old enough to simply write off and needs replacing. Then again, you may just need to upgrade your existing kit - a bit of extra RAM isn't going to break the bank. Software costs This is more relevant to a Windows environment, where you can use virtualisation to cut out some of the expensive licensing costs on the operating System and software. On the flip side, for some licences you need to pay per-installation and the cost of software would not change and could rise. Whether this would save you money is very application specific but is something you would need to work out when deciding whether virtualisation is for you. Power, cooling and rack costs As you can see, hardware and software savings are a bit pie in the sky, you can't really say 'that will save me money' until you sit down and think about what you are doing in a fair amount of detail. There is one area you are going to save money, guaranteed - your power, cooling and rack rental costs. This is the hidden vampire of the technology industry and once you progress beyond a couple of servers in a shared colo into dedicated space it really begins to bite. A shortage of power, in London especially, is forcing companies to go to great lengths to ensure they have adequate power to match their planned expansion over the next few years. The maths is pretty simple and relates directly to how much you can virtualise. If you can take 10 servers and consolidate them down onto a single machine then you are saving, theoretically, 90% of your power and cooling costs. This figure is probably not going to be so high, since the hardware will have a higher utilisation and therefore be closer to its peak power usage, so a more realistic figure is probably ~80%. In addition to this, your only using up one server worth of space in the datacentre so you save on your up-front infrastructure costs (installation of racks and power/cooling infrastructure). The amount you save will depend on how much everything costs of course but let’s just look at power to start with. The first thing to note here is that these prices are going up, fast, with no indication of slowing down soon. The same global factors that push up your bills at home have an impact on the cost of commercial power, multiplied . The cost of commercial power varies greatly depending on how much you use (think huge, shared data centre environments like Telehouse) and, when you are renting. Underlying commercial power is currently ~£0.06 per kWh when purchased is very large quantities, but the price you pay in a datacentre will include the power requirements of your cooling on top and change based on location and how good you are at contract negotiation 
A price range of £0.15 to £0.30+ per kWh is a fair representation of the real cost, for a medium sized company anyway. As a pricing example, lets take an example power cost for a small server suite, £0.25 per kWh, and a Dell 1950 specced to match those used widely here at PlusNet. This is about ~350W (0.35kW) per server so: (server power usage in kW) x (hours in a year) x (kWh price) = (cost per annum) 0.35 x (24x365) x 0.25 = £766.50 per annum Now if we go back to our previous example of a replacing 10 servers with 1 and reducing the energy costs by 80%, that’s a saving of over £6000 a year just on power, without taking into account the initial savings on the infrastructure and ground rent (you would need less physical space in the datacentre). This figure is an annual saving as well, adding up year on year. As you can see, there are massive cost savings to be had from a well worked virtualisation strategy, especially for new deployments. The trick for moving an existing system over is either re-using your hardware or at least balancing the cost of new hardware against the savings you can make. If you've managed to get through all that and are still interested then I'll finish off next week by going through some of the remaining reasons why people choose to use the technology. Virtualising the Datacentre #3 - Other Benefits of Virtualisation