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7 Reasons Why Microsoft’s Cloud Math Needs Remediation

Microsoft has published a white paper claiming Microsoft’s private cloud solution costs much less than VMware’s. It is interesting to see that 75% of the white paper is actually about VMware!

The white paper uses distorted cost comparisons such as comparing Microsoft’s unreleased products with VMware’s released products, comparing Microsoft discounted prices with VMware’s list price, comparing dissimilar features and comparing software only costs and ignoring the total cost. When fairly calculated, the total cost of using VMware’s solution is actually 15% less than that of Microsoft’s.

Why Microsoft Private Cloud Cost Claims in the Paper are Invalid

(1) The paper compares Microsoft’s volume discounted prices with VMware’s full list prices. The paper uses prices that are available only with their “Enrollment for Core Infrastructure” (ECI) bundle. The bundle requires a minimum initial purchase of 50 processor licenses with 3 years of Software Assurance (SA). VMware vSphere has no such minimum purchase requirements. A fair comparison should compare the product list prices from both vendors or volume discounting from both vendors.

(2) The paper compares dissimilar functionality – Microsoft’s ECI bundle is not equivalent to the VMware Cloud Infrastructure Suite. The ECI bundle either does not have a fully equivalent solution or greatly lags behind in functionality for the following VMware products making the comparison an apples-to-oranges one.

VMware-exclusive features

VMware advantages over Microsoft ECI

Microsoft’s Solution


Adaptive, virtualization-aware security for virtual datacenters and cloud environments at all levels – host, network, application, data and endpoint.

Endpoint Protection is only an antivirus solution and not virtualization aware. It lacks a built-in network loadbalancer or firewall, requires in-guest agents and is prone to AV storms.

Site Recovery Manager

Out-of-the-box, automated datacenter-level disaster recovery solution that provides replication to a secondary site, management of recovery and migration plans and non-disruptive testing.

No integrated SAN/host based replication, tedious orchestration for site failover and failback and no full-scale failover testing with network isolation making disaster recovery limited and highly manual.

vCenter Operations

Purpose-built cloud management solutions that provides intelligent monitoring, self-learning analytics, proactive management and comprehensive visibility across the entire infrastructure.

Limited operations management for the cloud that offers basic analytics, uses static, reactive thresholds with limited visualization to aid monitoring and analytics.

vCloud Director

Accelerates provisioning on shared infrastructure. Allows migration of workloads between different clouds and integration of existing management systems using extensions, APIs, and cross-cloud standards.

Cannot fully isolate tenants and extensibility to various cloud providers is limited to the Azure platform.


(3) The paper uses VMware’s highest product editions for comparison when Microsoft’s products are closer in functionality to VMware’s lowest editions. Hyper-V R2 is actually is closer to vSphere Standard edition in functionality.

(4) The paper ignores total costs and the impact of VM density on total costs. The paper compares the cost of software licenses only and ignores the total cost of ownership. It also does not account for VM density. vSphere’s proven 20% VM density advantage over Hyper-V (proven in tests conducted by 3rd parties) lowers the total cost for a VMware cloud by reducing the spending on servers, network, storage, power and cooling and guest operating systems.

The paper also ignores the additional costs a customer has to incur with 3rd party solutions given the lack of various critical features in Hyper-V.

When fairly calculated, Microsoft’s costs are comparable to VMware’s. When the total cost using Microsoft undiscounted Windows Server 2008 and System Center 2012 list prices are compared to the total cost of using VMware vSphere Standard and vCenter, VMware is actually 15% cheaper. Following is a total cost and and cost per VM example using the same configuration cited in the Microsoft paper. It compares the cost of deploying 14 VMs/host for Microsoft and 17 VM/host for VMware for a 500 VM deployment using dual socket, 6-core servers.

Cost per Virtual Machine



VMware Savings

VMware Savings (%)

Infrastructure Cost

















Power and cooling (1 Year)





DataCenter Space (1 Year)





Total Infrastructure cost





Virtualization SW Cost



vSphere 5 (Standard) + SnS










Windows Licenses Cost





Win 2008 w/Hyper-V + SA





Virtualization Mgmt. SW Cost





vCenter Total (w/SNS)





vCenter and SnS





Windows for vCenter and SQL





SQL 2005 for vCenter





System Center and SA










Total Management Software Cost





Total Software Costs





MS Support (Assumption 20hrs/year @ $214/hr)




Total Costs





Total Costs per Application





% difference in VM density



 Based on average support usage, the computation adds 20 hours of support per year for Microsoft as Microsoft SA does not include support. Also the storage and networking costs are higher with the Microsoft solution as it requires more servers.

(5) The paper incorrectly claims that Microsoft costs will not increase as the number of VM increases. The paper claims that customers will have to pay more with VMware as the number of VMs grows, however with Microsoft the costs remains flat. This claim is not based on realistic growth models. We know from various performance testing reports that Hyper-V R2 supports fewer VMs per processor than vSphere 5, hence, as the number of VMs increases, a Microsoft solution will require more servers along with an increase in other associated costs.

(6) Customers will see 10-20% increase in Microsoft management costs with higher System Center 2012 pricing. Microsoft’s white paper doesn’t mention that customers will now be paying more for System Center. Based on the pricing and packaging changes announced by Microsoft for System Center 2012, there is a 37.5% increase in license price per processor for the Datacenter edition.


System Center (Current) – Datacenter Edition

System Center 2012 -Datacenter edition

Published list price including 2 years of SA


$3,607 covering up to 2 processors

License price per proc without SA



 Even after subtracting the cost of Management Server and SQL Server licenses, customers will experience a 10-20% price increase. In fact, our analysis shows that the impact increases as the number of VMs in the environment grows.

 Also, customers will be forced to buy the full System Center 2012 suite at a higher price as the individual components included in the new System Center 2012 cannot be purchased separately.

(7) Microsoft support costs are not included when comparing to VMware’s Support and Subscription Services (SNS). Microsoft’s SA is billed at 25% of license price and does not include “MS Support”. Customers either purchase “Support” separately from Microsoft [at $200+ per hour] or use 3rd party services. VMware’s SNS entitles a customer to not only all software releases and updates but also VMware’s Technical Support. The paper uses highest end support cost for VMware and completely ignores support cost for Microsoft!

Finally, the paper overlooks how VMware’s cloud infrastructure products are designed and built for virtual and cloud infrastructures and are far more efficient, reliable and robust compared to Microsoft’s. Check out the blog that outlines the key advantages VMware’s cloud Infrastructure Suite has over Microsoft’s products.

The Microsoft white paper is nothing but an attempt to artificially inflate VMware’s prices and distract customers from the shortcomings of their own products.


This entry was posted in Current Affairs on by .
Chanda Dani

About Chanda Dani

Chanda Dani has been with VMware since May 2010. She has worked in various product marketing roles across the Software-Defined Datacenter product portfolio and currently does product marketing for VMware's cloud management products - vRealize Suite, vCloud Suite and vRealize product lines. Follow her on twitter: @chanda_dani

One thought on “7 Reasons Why Microsoft’s Cloud Math Needs Remediation

  1. Mike

    Microsoft have also neglected to mention their far smaller range of supported Guest Operating system types, which of course will limit what you can virtualize. VMware’s wide range of supported OS types means a lot more can be virtualized, potentially increasing cost savings further.

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