Home > Blogs > vCloud Architecture Toolkit (vCAT) Blog


How to use and interpret the vCloud Availability for vCloud Director Business Calculator

Foreword:

In this blog we will run though how to use the vCloud Air Network vCloud Availability for vCloud Director Calculator to see how a multi tier DR solution could benefit your business. It has been created to provide indicative revenues and margins based on a multi-tiered Disaster Recovery solution using vCloud Air Network vCloud Availability for vCloud Director as the middle tier option.

Using the calculator

Please access the calculator at the Partner Central link: “vCloud Air Network Services IP”

https://vmware.my.salesforce.com/apex/page?name=set.hybrid

Capital Expenditure Modelling

In the sheet called CapEx modelling you can change any cell highlighted GREY and with Bold Red Text

  • Input your number of VM for Premium / Standard and Basic Tiers of Disaster Recovery Service.
  • Input the approximate number of virtual CPU (vCPU), virtual RAM (vRAM) and storage for each VM in each Tier
  • Input the contention ratio of compute (vCPU) for each tier, usually the lower the service, the higher it is contented with other resources.

The Calculator will then work out the total vCPU, vRAM and storage that would be required based on volume and contention. Other fields that are relevant are:

Column name / field Identifier Meaning and implication
Storage Accelerator This is to allow you to add a multiplier to the resulting required storage – this is for un-interrupted replication whilst offering DR testing.
Hosts in HA cluster The most common size for an HA cluster is a two-node cluster, since that is the minimum required to provide redundancy, but many clusters consist of many more, sometimes dozens of nodes. Please input the total HA hosts in this model – this will be used in the Premium tier offering only.
pCPU Number of physical CPU a host server can support
Core Number of core per pCPU
GB RAM Amount of physical RAM in host server
Contract term Number of months the DR service will run (assumed contract term with customers)
Estimated Price per unit Price per physical host loaded to the specification provided for pCPU, Core, GB RAM. (Storage assumed SAN)
Estimated Server Maintenance Maintenance % over term for each machine

The output from the CapEx Modelling sheet is a simple monthly cost for each tier of service based upon the estimated CapEx costs divided by the term of contract.

Operational Expenditure Modelling

The next sheet that requires some date input is the OpEx Modelling. This sheet is focused on the operational costs such as licenses and Full Time Engineer (FTE) costs to build and manage the service. As with the previous sheet please change any cell highlighted GREY and with Bold Red Text to suit your specific environment. The following table details the specific fields that can be changed:

Column name / field Identifier Meaning and implication
Please input your vCAN point price per vGB RAM This is your per point buy price from your aggregator.
Premium Cost / VM The cost for your Premium Disaster Recovery Service; market prices vary considerably, please enter your average cost for premium DR replication.
Basic cost / VM The cost for your Basic Disaster Recovery Service; market prices vary considerably, please enter your average cost for backup.
Commitment Some vendors demand a minimum commitment for licenses in estates, in these cells please put in any minimum commitment for either the Premium or Basic Data Protection vendor solution
 Estimated Daily rate Operations FTE This is an all-inclusive estimated daily cost to the business for an FTE (inclusive all holiday pay, insurances etc). This is used to calculate the cost to setup the appliances, the ongoing management of the appliances, DR testing and any Add, Move, Change, Delete (AMCD) operations during the full term of the contract.

The output from this section is to get a monthly OpEx cost for each tier of service, note that this calculator has not included an OS (possibly used by appliances), nor data centre infrastructure costs.

Results

The sheet ‘DR Service Tier Comp Results’ contains some additional cost input to finalize the calculations:

Column name / field Identifier Meaning and implication
Estimated Market rate per VM / Month This is what you will charge your customers for the service, based on this input, measured against the known CapEx and OpEx previous inputs, the revenue can be projected.

Based on your input the following charts are output:

  • Pie Chart detailing the profit share across the differing tiers of service

profit-share

Naturally differing tiers will have differing levels of investment, differing price and cost points and hence differing profit margin over time.

This pie chart looks at the monthly profit difference and is a visual view of the most and least profitable tier of service

  • The number of months until the service tier is profitable:

revenue-positive

Looking that the gross profit (month on month cumulative profit), it is interesting to see when the initial cost outlay is neutralized by profit and whether the service is profitable within the contract period. Faster time to profit is obviously more favorable to produce more revenue over the contract duration.

  • The gross profit number over the term of the contract

gross-profit-time

Understanding the return over the contract is key to revenue projection before interest and tax – this is operating profit and can be used to provide an EBITDA (Earnings Before Interest and Tax, depreciation and amortization) calculation. Depreciation and amortization has not been considered in this calculator.

More detail regarding these charts can be seen in the tables:

tables-view

An alternative way of looking at the model is to view the proposition for a desired profit margin output perspective; which will dictate the sell value upfront. To use this please input your desired profit margins into the cells:

profit-up-front

This will then work out your sell value price necessary to maintain the profit margin required – you can then plug these figures into the market rate column to see the resulting profit share, months to revenue and gross profit for each tier.


Any questions, please use the comments section to ask.

Please access the calculator at the Partner Central link: “vCloud Air Network Services IP”

https://vmware.my.salesforce.com/apex/page?name=set.hybrid

Save

3 thoughts on “How to use and interpret the vCloud Availability for vCloud Director Business Calculator

  1. vikrant

    Great article Thank you very much for sharing this great information.You show how to use vCloud Availability for vCloud Director Business Calculator . It is really helpful. I have done by the help of your article.Operational Expenditure Modelling is the best way to find the operational costs such as licenses and Full Time Engineer (FTE) costs to build and manage the service. Thanks for sharing . The way you explained each and everything is really great. Thanks once again.

    1. Guy Bartram

      Thank you for your kind comments! There will be more coming soon.

  2. vikrant

    Thanks for your instant reply. I will wait for your next article.

Comments are closed.