Goals and overview
Demonstrating economic value can always be a challenge, especially when you need to cost justify investments in infrastructure modernization as part of a larger enterprise-wide transformation project. This is even more difficult when trying to estimate the financial benefits before a project has even started, which is typically when these types of cost justifications are scrutinized the hardest. The biggest gaps that most TCO tools have is that they are not based on real customer data. As a result, any subsequent total cost of ownership (TCO) outcomes from the model can be easily discounted because they are not grounded in reality. We took a very different approach when building the VMware Cloud Foundation TCO Calculator.
When we kicked off the VMware Cloud Foundation Total Cost of Ownership Calculator project, we took a very different, but ambitious approach to building the model. The goal was to create a tool that was relatively easy to use and didn’t require a lot of up-front information, but provides measurable benefits without requiring a phd to decode the results. It was important that the tool was built from real customer data, using a solid basis for the assumptions and outcomes for the model. It was also important that the tool was available as part of a catalog of business and technical tools that help VMware customers to learn, evaluate and validate solutions to their specific challenges. This criteria led to some important decisions to be made as the project was being scoped and defined.
One of the more obvious decisions that was made was to host the calculator in the business tools section of VMware Pathfinder page, mainly because Pathfinder provides one-stop shopping for all VMware products and solutions. The Pathfinder team was great to work with and this provides a great environment to host the tool. If you haven’t given VMware pathfinder a test drive, take a closer look at https://pathfinder.vmware.com/.
Figure 1: VMware Pathfinder
The other key decision was to build the tool using actual customer data, so we worked closely with the Data Integrated Customer Engagement (DICE) team, using proven assumptions and methodologies as a basis for the model. This enables the DICE tool, which was originally developed as an internal sales tool, to utilize (anonymized) data points providing an economic model that serves as an excellent framework for the TCO calculations. DICE highlights the clear capital and operational cost savings of VMware Cloud Foundation deployments and uses this economic data to build a defensible business case. DICE highlights how VMware Cloud Foundation and the Software-Defined Data Center (SDDC) provides efficiencies at scale for companies across many market verticals. The business outcomes are provided via detailed charts and custom data views to allow customers to model current and future savings. It was a key goal of the TCO tool to closely model the business value and value drivers behind the cost savings.
While the VMware Cloud Foundation TCO calculator provides savings estimations based on VMware customer averages, the model assumes that customers have already deployed existing VMware products (e.g., VMware vSphere®, VMware NSX®, etc.) and then compares that to the benefits of the fully integrated VMware Cloud Foundation full-stack HCI solution.
The models for VMware compute virtualization represent customers up to 3,600 hosts, and up to 53,000 virtual machines deployed. Customers included in this sample represent 26 countries across 22 industry segments including Government (15), Healthcare (12), Education (5), Financial Services (21), and Business Services and Communications (5). The outcome of all this is a 3-year estimation of the combined Capital and Operational cost savings comparing before and after scenarios with VMware Cloud Foundation as shown below.
Figure 2: VMware Cloud Foundation TCO Savings
Keep in mind that your mileage will vary and that’s exactly the point. This tool is intended to provide directional guidance for the savings that you can achieve by moving to a cloud operating model. Estimated savings are based on aggregate data that combines customer-specific data gathered in interviews and business case modeling conducted with individual companies. The metrics for the individual company data used to project savings can include but not be limited to personnel costs, infrastructure hardware and operating costs, as well as typically expected resource utilization and operational process efficiency improvements.
Take a Test Drive
The best way to experience the VMware Cloud Foundation TCO Calculator is to take a test drive at pathfinder.vmware.com. Once there, simply enter your industry, vSphere deployment parameters, IT initiatives and some basic information about your organization. From there, you’ll get some basic TCO savings and once logged into Pathfinder, you can download a detailed analysis of the TCO calculations with all of the value drivers and justifications.
The business value of VMware Cloud Foundation is also clearly detailed in this infographic titled the VMware Cloud Foundation Business Case which you can download here.