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4 Ways a Software-Defined Data Center Reduces TCO

By Aernoud van de Graaff

I worked with several IT organizations last year to develop TCO studies to determine the financial impact of moving toward a software-defined data center (SDDC). And for each customer, an SDDC reduced TCO in one or more of the following areas:

1. Lower hardware (and hardware-related) costs

  • Server, storage and network consolidation, pooling, and virtualization enable you to get the most out of your existing hardware investment.
  • Automation of performance and capacity management, and dynamically optimizing hardware utilization, reduce your hardware footprint even further.
  • If you have dynamic workloads, making use of a hybrid cloud model to instantly burst workloads to a public provider eliminates the need for peak-sized capacity.
  • Less hardware directly translates into reduced power consumption maintenance and data center footprint requirements.
  • You are now hardware-agnostic and vendor-neutral. Your applications will run on any hardware, which allows you to choose your vendors, demand better discounts, and / or make the move to other (cheaper) vendors.

Example: A large service provider more than doubled the number of VMs running on its cloud environment after implementing capacity management tools. And, based on our recommendations, decided to add more memory, avoiding a $1.3M USD hardware investment.

2.  IT operations automation

  • Through automation you can now monitor, adjust, heal, and optimize your infrastructure without human intervention. This will significantly reduce the operational tasks for your system administrators, freeing them up to work on higher-value projects.
  • Automation will also reduce the number of human errors, reducing fire-fighting and limiting the need for dedicated operations roles.

Example: Another client needed 45 percent fewer admins to manage the enterprise’s virtual environment after implementing automation. The automated environment also lowered OpEx costs by 25 percent and increased efficiencies, including the number of projects that IT can now run for its business users. The organization is on track to manage its 10-20 percent projected growth without additional headcount.

3. Cloud automation

  • Automated provisioning gives your users direct control over what, where, and when to (de)provision the infrastructure he/she requires, without manual intervention from your IT staff.
  • A policy-based deployment ensures that your Dev, Test, and QA workloads run in the same conditions as the Production environment. You avoid technical problems (and costly errors) with workloads that may, for example, run fine in QA but have issues in Production due to different security settings.

Example: An IT department I’m currently working with has transformed its traditional environment to a private cloud, reducing the number of incidents related to implementations by 85 percent.

4. Cloud use in practice

  • The traditional way to set up and provision infrastructure to end users (such as developers) takes time. Once the infrastructure is delivered, your users have a tendency to not let go of it. Some users will hoard infrastructure just to make sure they have it available when they need it.
  • When infrastructure is delivered almost instantly, there is no need for your users to hang on to unused capacity. And, with the right management tools, you can determine whether infrastructure is actually being used (or not).
  • If your users don’t pay for infrastructure, hoarding tendencies will continue. However, implementing a pay-per-use policy (or at a minimum, showback of cost incurred) will sharply curb this behavior.
  • Providing infrastructure as a service can also result in increased usage, because it’s so much easier to get it up and running. To keep costs down, you will need active management to ensure that each provisioned environment adds value to the business.
  • Projects will also run more efficiently, as there is no need for users to wait for available infrastructure when projects kick off and also throughout the project when extra capacity or an additional test environment are needed.

Example: My recent engagement with a financial services customer revealed that 25 percent of the provisioned infrastructure was not actively used.

A software-defined data center can reduce the TCO of your infrastructure, allowing you to redirect IT resources to innovation initiatives that will add true value to the business. That’s why more and more IT executives are incorporating the software-defined data center into their strategic plans.


Aernoud van de Graaff is a business solutions architect with VMware Accelerate Advisory Services and is based in the Netherlands. You can follow him on Twitter @aernoudvdgraaff