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Small Virtual Infrastructure or Large Private Cloud, VMware TCO is Lowest – Here’s Proof

We’ve just updated the VMware TCO Comparison Calculator to help customers see the true Total Cost of Ownership differences between VMware and Microsoft. It’s easy to use – just enter the basic parameters for your virtual infrastructure or private cloud environment, such as the number of VMs, type of servers and storage, and the product edition or features you need. The calculator will generate a complete TCO analysis that includes all the necessary elements of capital and operational expenses.

We created the TCO Comparison Calculator after hearing from existing and prospective VMware customers who were being told that alternative solutions based on Hyper-V would be much less expensive, or even “free”. The calculator totals cost elements that our competition leaves out of their oversimplified comparisons, such as: the system administrator labor costs to operate the environment (the largest component of TCO and one that independent testing shows to be much lower for VMware); effects of VM density (where VMware has an advantage according to analysts like Gartner); 24×7 phone support; and the need for third-party software to fill feature gaps.

When all those cost elements are combined, the VMware TCO Comparison Calculator shows that VMware solutions, ranging from a small business virtual infrastructure built with vSphere Essentials to a full-featured large enterprise private cloud based on vCloud Suite Enterprise, have the lowest TCO – often by substantial margins.

When we updated the calculator, we saw that the VMware TCO advantage increased for some important reasons.

  • Our latest vCloud Suite editions now bundle the platform power of vSphere Enterprise Plus together with the management operations and automation efficiencies of vRealize Suite at very attractive pricing.
  • Log analytics powered by vRealize Log Insight is now included with any configuration that includes vCenter Server or vRealize Suite, making VMware solutions more economical than alternatives that must make up for that capability by adding third-party software.
  • Microsoft’s adoption of core-based pricing in their upcoming release of Windows Server 2016 and System Center 2016 makes their solutions more expensive on mainstream servers that have higher core counts. The calculator assumes both VMware and Microsoft hosts are licensed for Windows Server Datacenter edition, so its core-based pricing penalizes customers of both vendors, but the lower VM density of Hyper-V means more Windows Server licenses are needed for a Microsoft platform. Also, System Center is needed to manage Hyper-V and its higher costs with core-based pricing fall entirely on the Microsoft side of the TCO comparison.

Another important enhancement we’ve made to the calculator is local currency support. Users can select USD, AUD, EUR, GBP, or JPY and the calculator will apply VMware and Microsoft list prices from those geographies.

This example from the VMware TCO Comparison Calculator shows that the 3-year TCO for a 500-VM environment built with vSphere with Operations Management Enterprise Plus will be 33% less than a comparable solution based on Microsoft Windows Server Hyper-V and System Center.


Our customers in the trenches running enterprise virtual infrastructures often tell us they know VMware offers the best and most cost effective solution, but they need help making the case for selecting VMware with purchasing managers or CFOs that have heard from other vendors claiming to be less expensive. If you find yourself in a similar position, use the VMware TCO Comparison Calculator to arm yourself with solid proof that VMware provides the lowest total costs.

Memory Overcommitment in the Real World

There has been a lot of talk on this blog and others about memory overcommit. Several of the blogs have tried to discredit the power of memory overcommit by saying it’s never used by customers in the real world and can simply be overcome by adding more memory to the server (see the long discussions in previous posts on this blog). One VMware customer has already commented about how he architects his environment with memory overcommit in mind. I received a private response from another VMware customer who is getting ready to implement a very large VDI environment with some interesting numbers that I’ll walk through below. The customer is a large US bank and to protect the security of their environment I did black out some of the names in the screenshots.

About the Environment

This customer configured their standard Windows XP environment for their call centers to run in a virtual machine. Each virtual machine is granted 512 MB of memory and 1 virtual CPU. Each VM runs a series of applications including Marimba, Microsoft Office, a call recording application, a customer database application, and a BPO (business process off-shoring) application.

The host used is an IBM x3850 M2 quad socket, quad core system (total of 16 cores). The server is configured with 64 GB of physical RAM. There are 32 memory sockets in the server.

At the time the system was actively being used by call center employees reflected by this CPU utilization graph.

cpu chart.jpg

Running the Numbers

Below is a screenshot of their environment showing a total of 178 VMs running on the system. You can also see in the screenshot that less than 20 GB of RAM out of the total 64 GB of RAM is being used on the system. With a total of 178 VMs configured for 512 MB of RAM each they are currently allocating 89 GB of memory to running VMs which means they are oversubscribed on the host.


Below are screenshots of the price for an identically configured host coming from IBM’s website on March 18, 2008.

VDI Configuration Summary.png

VDI Configuration Memory.png

Total cost for the server is $24,623.00. Remember that this box is overcommitted on memory. In order to run the same setup with a competitive solution we would need to have a server configured with at least 89 GB of RAM – the total allocated to all of the running virtual machines. Going back to IBM’s website and reconfiguring the server with more memory gives us the following screenshots. The closest configuration that supported at least 89 GB of RAM was 92 GB of RAM because of the memory configurations allowed in the server.

VDI Configuration - Competitor.png

VDI Confiuration Memory - Competitor.png

The new cost of the server is $36,423.00. Compared to the original configuration this is a difference of $11,800.00 just to add more memory to the server to support a solution that does not have memory overcommit. The cost of a 4 socket VMware VI3 Enterprise license is $11,500.00 list price. As you can see the cost of a VMware license is actually $300 less than the cost of adding more memory. Not much of an advantage on the cost side but it still drives home the point that the VMware solution is not more than the competitive "free" solution. What’s more is now you get all of the enhanced functionality of the VMware solution that the competitive solutions are lacking. But enough of the marketing pitch, let’s go back to the numbers and this customer case study.

We’ve shown you a real world scenario from a real customer where adding more memory to the server is still more expensive than the VMware license cost. I want to take this one step further and show what designing the architecture to more closely match the true working set size of memory could do. Remember that’s we’re using less than 20 GB of RAM to run this environment of 178 VMs. We went back to the IBM website and configured the starting point for a VMware solution to have at least 20 GB of RAM. The closest we could get is a host with 24 GB of RAM as seen below.

VDI Cheaper Starting Configuration.png

VDI Cheaper Starting Memory.png

As you can see, by truly engineering the solution to what you actually need we’ve reduced the hardware cost to $20,023.00. If we compare that to the competitive solution’s hardware cost we get a difference of $16,400.00 for the extra memory. Subtracting out the cost of the VMware license the VMware solution comes in at $4,900.00 cheaper than the competitive solution.

It’s All for Charity

I would love for us to give all of that $4,900.00 to charity but the customer wouldn’t go for that. Instead they’re using it to pay for some of the thin clients they’ll use in this solution. After all the $4,900.00 they saved by going with a VMware solution over a competitive "free" solution will buy them 33 thin clients at their current price.

The good news from all of this is James O’Neill from Microsoft was kind enough to volunteer $270 of his own money if we could show a real customer running with memory overcommit where adding memory to the server wouldn’t make the Microsoft solution still cheaper than VMware. I think we’ve adequately met that goal here. So, James, the charity of choice is One Laptop Per Child. And just in case you believe that we’ve cherry picked a use case we’ll be more than happy to connect you directly via phone to any one of the numerous customers we have leveraging memory overcommitment in their environment today.