posted

1 Comment

This post is Part 2 of a 2-part blog series on how to best use and interpret the vCloud Availability for vCloud Director Business Calculator. Part 1 provides a broad overview of the market and VMware vCloud Availability for vCloud Director. Part 2 takes a deeper dive on how to utilize the Business Calculator. 

To read part 1 of this series, click here.

By Guy Bartram, Director, Product Marketing, VMware vCloud Air Network

Using the Business Calculator

You can access the business calculator at the Partner Central link: “vCloud Air Network Services IP”.

Capital Expenditure Modeling

On the sheet called CapEx Modeling 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 Modeling 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 Modeling. 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, you are able to 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:

vcapic1
  • 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.
vcapic2
  • 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 favourable to produce more revenue over the contract duration.
vcapic3
  • 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:

vcapic4

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:

vcapic5

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.

 

You can access the calculator at the Partner Central link: “vCloud Air Network Services IP”.

 

Learn more about the VMware vCloud Air Network Program.

 

For the latest updates around the vCloud Air Network, be sure to follow us on Twitter at @VMwareSP, and ‘like’ us on Facebook at Facebook.com/VMwareSP.