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You Can’t Trust Microsoft’s Azure TCO Calculator

[UPDATE: As of January 2, 2018, the double counting of VMware compute category costs has been corrected. The other errors noted in the calculator remain.]

Last month, Microsoft posted an online “Azure TCO Calculator” that supposedly compares the cost of on-premises infrastructure, based on VMware vSphere, with the cost of running the same workloads in the Azure public cloud. Here at VMware, we pay a lot of attention to the Total Cost of Ownership (TCO) of on-premises vSphere versus public clouds. Our customers and industry analysts have told us that a well-managed private cloud often costs less than basic public IaaS clouds. We’ve recently written about a 451 Research study that found 65% of surveyed IT professionals felt their private clouds cost at most only 10% more than public clouds. So, when Microsoft’s blog posts and white papers claimed an 84% TCO advantage for Azure, we knew their figures needed scrutiny.

It didn’t take much digging to find numerous errors and biased assumptions in the Microsoft TCO calculator that wildly skew their results. In fact, the errors were so glaring, we wonder if anyone at Microsoft bothered to test it before going live.

What were they thinking?

The Microsoft calculator provides enough details in its listing of assumptions and in its expanded results breakdown to make it easy to replicate their TCO methodology in a spreadsheet. We did just that, and errors immediately became apparent. Here are just a few:

  • VMware license fees are paid every year of the selected timeframe! Selecting a 3-year TCO timeframe results in vSphere Enterprise Plus license costs being tripled. C’mon Microsoft, we know vSphere isn’t free, but our customers only need to buy it once, not every year.
  • vSphere hosts are grossly overconfigured for CPU and RAM. Using the scenario from the Microsoft white paper of 500 VMs, each with 2 vCPUs and 4GB, results in a server hardware requirement totaling 1,984 cores and 33TB of RAM. That’s 4x the CPU and 16x the memory that should be required! Perhaps they were using Hyper-V host configuration guidelines. Either way, you do NOT want these guys sizing your data center hardware.
  • For Azure Pay As You Go VMs, the calculator is using CPU-throttled B-series VMs that Microsoft describes as appropriate only for small dev/test-type uses.
  • VMs in Azure are powered on only 40% of the time with the calculator defaults. Perhaps a small dev/test team can turn off their VMs when they leave for the day, but the production enterprise workloads that run on vSphere are powered on 24×7, so hosting them on Azure should require the same continuous uptime.
  • The Microsoft calculator assumes vSphere Enterprise Plus, which includes features like High Availability, Dynamic Resource Scheduling, Fault Tolerance, vRealize Log Insight, and more. Azure VM instances don’t have those features – you would need to pay for extra Azure services like Premium storage and Operations Management Suite to come close.
  • On-premises servers, storage and networking hardware are assessed 20% per year maintenance fees in the Microsoft calculator. Are you paying that much? Didn’t think so.
  • The Microsoft calculator doesn’t apply any residual value for the on-premises servers and software at the end of the selected TCO timeframe. I guess Microsoft expects you to send all your servers straight to the landfill on their third birthday.
  • To cap it off, we found that a new math error was recently introduced into the Microsoft calculator. It now double counts all the costs in the “Compute” category for the VMware on-premises configuration – hardware, software, electricity, and virtualization costs are added twice. Really guys, this is getting absurd.

Let’s fix their calculator and see the effects

With all those errors in the Microsoft calculator, it’s not surprising to see that the 500 VM scenario noted above results in an enormous TCO difference between on-premises vSphere and Azure. Fortunately, we can make some simple corrections to their calculator and re-run the numbers. We’ll use vSphere Standard Edition, since it’s more comparable to Azure VM and storage features, and we’ll only charge for it once. We’ll reduce the vSphere server count to properly provision CPU and memory. A more reasonable 6% annual hardware maintenance fee will be assumed. The Azure PAYGO configuration will be upgraded to more realistic F2 VMs needed for steady workloads. Lastly, we’ll keep the Azure VMs running 24×7, as they would be for production workloads, by setting utilization to 100%.

With those simple corrections, the picture changes dramatically. Now, the on-premises vSphere TCO is lower than all but the 3-year reserved Azure TCO – a result much more in agreement with costs reported by customers.

Azure TCO Calculator Inputs

  • 500 compute VMs with Windows, 2 vCPUs and 4GB each, US East 2
  • VM density: 2 vCPUs/physical core
  • 100TB local disk/SAN storage
  • 3-year timeframe

If you really want a VMware-compatible public cloud with low TCO, look at VMware Cloud

So, now that we’ve shown that Azure doesn’t have a TCO advantage over on-premises vSphere, where should VMware customers look for a public cloud provider that can really save them money and increase agility with true hybrid cloud computing? The answer is the VMware Cloud offerings that provide vSphere-consistent infrastructure without the complexity of migrating workloads to an entirely different platform like Azure. You can choose VMware Cloud on AWS that features vSphere, vSAN and NSX with familiar vCenter management, all running on bare-metal AWS infrastructure with optimized access to AWS services. Or, select from the thousands of VMware Cloud Providers that offer VMware Cloud Verified infrastructure-as-a-service. You’re sure to find a provider that fits your needs and TCO budget when you’re ready take the easiest and most direct path to hybrid cloud.

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.

vmwareCostGraph

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.

VMware Bests Red Hat In OpenStack Performance, Cost Study

While the operating assumption is that the OpenStack framework works best on open source components such as KVM, a just completed study by Principled Technologies and commissioned by VMware showed otherwise. Tests showed remarkably higher performance and substantially reduced costs when using OpenStack with VMware technology including vSphere when compared to OpenStack with Red Hat components.

vmware openstack summary chart

In the study, OpenStack services were used to provision and manage the test configurations. The study equipment was identical except when published recommendations mandated a change. The test results showed:

  • VMware Virtual SAN (VSAN) provided 159% more IOPS than Red Hat Storage Server (GlusterFS)
  • A Cassandra NoSQL database installation performed 53% better on vSphere than on Red Hat KVM
  • Over 3 years, the total cost of infrastructure hardware and software was 26% lower on VMware than on Red Hat 

 The study recognized two trends in enterprise computing:

  • The emergence of hyper-converged architectures that can increase performance and lower costs associated with a virtualized infrastructure by having compute, network, and storage coexist closely on physical resources.
  • An interest in the OpenStack API framework as a way to provide efficient self-service provisioning and consumption of these underlying compute/network/storage resources to deploy applications on a large scale.

Cloud Performance

VMware innovations are helping customers get enterprise-class performance when exploring the OpenStack framework as a platform for large-scale application deployment. Among these innovations, the study showed that VMware Virtual SAN played an important role in providing performance advantages. Among the most significant findings related to VMware Virtual SAN, the study noted:

  • The use of direct-attached disks on the compute hosts brought proven benefits of shared storage in the VMware environment, such as High Availability (HA) and vMotion.
  • Tight integration with the vSphere [hypervisor]; scaled easily by adding more hosts to a cluster or more storage to existing hosts. In addition, VMware Virtual SAN can be managed directly through the familiar vCenter Server™ Web client console, alongside everything else in a VMware vSphere environment.
  • Every disk chosen for Virtual SAN storage belongs to a disk group with at least one solid-state drive that serves as a read and write cache. Additional storage or hosts added to the capacity and performance of a VMware Virtual SAN data store without disruption.

For the following tables, please refer to the full study for the complete test methodology and equipment setup.

Figure 1: The amount of YCSB (Yahoo Cloud Serving Benchmark) OPS achieved by the two solutions. Higher numbers are better.

Figure 1: The amount of YCSB (Yahoo Cloud Serving Benchmark) OPS achieved by the two solutions. Higher numbers are better.

Figure 2: The amount of IOPS achieved by the two solutions. Higher numbers are better. The workload was 70/30 R/W mix, random, and 4K block size.

Figure 2: The amount of IOPS achieved by the two solutions. Higher numbers are better. The workload was 70/30 R/W mix, random, and 4K block size.

Cost Comparison

The study showed that running OpenStack on VMware components required less hardware. Using VMware vSphere with Virtual SAN also lowered software costs. In total the study showed the 3 year costs were 26 percent lower. Because each OpenStack deployment and environment is different and support engagements vary widely from installation to installation, the costs of implementing the OpenStack framework were not included for either the VMware or the Red Hat platform.

Figure 3: Projected three-year costs for the two solutions. Lower numbers are better.

Figure 3: Projected three-year costs for the two solutions. Lower numbers are better.

Conclusion

The study concludes:

“In our testing, the VMware vSphere with Virtual SAN solution performed better than the Red Hat Storage solution in both real world and raw performance testing by providing 53 percent more database OPS and 159 percent more IOPS. In addition, the vSphere with Virtual SAN solution can occupy less datacenter space, which can result in lower costs associated with density. A three-year cost projection for the two solutions showed that VMware vSphere with Virtual SAN could save your business up to 26 percent in hardware and software costs when compared to the Red Hat Storage solution we tested.”

As an enterprise customer, you have choices when it comes to implementing an OpenStack framework. Your selections will impact the performance and overall cost of your scale out infrastructure. With this study, VMware has demonstrated significant performance gains and cost savings in an OpenStack environment.

Read the full study here.

Partnership, Choice and the Hybrid Cloud

“There is much rhetoric these days about “cloud wars”.  Beyond the rhetoric, the hype is there for a reason: the value of hybrid cloud environments is becoming real, and the market opportunity even more real.  We are proud to serve our customers as a leading provider of virtualization software and cloud infrastructure.  And we’re equally proud of what our customers are achieving with VMware as a partner.”

You can take a break from the hype cycle by checking out the rest of the blog post by Bogomil Balkansky, Sr. Vice President, Cloud Infrastructure Platform here.

vSphere with Operations Management – Raising the Bar for Integrated Cloud Management

With the announcement of vSphere with Operation Management this week, it is truly exciting to not only see the advancements of management being tied so closely to the vSphere platform, but also bring our customers closer to the vision of the Software Defined Data Center.  As we see both the vSphere platform mature along with our customers’ use of it, we also see an evolution of VMware operations management accelerating and leveraging the value of the platform in our customers’ environments.

This new offering signifies a number a key aspects in the evolution of virtualization and cloud management:

First, our customers have experienced and expressed the need for accurate and automated solutions to proactively manage performance and capacity and vCenter Operations Manager, as part of vSphere with Operations Management, has delivered.  Leveraging a foundation of patented self-learning analytics, vCenter Operations Manager delivers the most comprehensive, scalable and automated management solution for vSphere.   Utilizing the vSphere health model, vSphere with Operations Management further extrapolates and presents data for managing performance and capacity more effectively than any other current or promised solutions.

 “We invested in vCenter Operations to support our large infrastructure of 500 VMs and 40 hosts. It has enabled us to predict capacity needs and to easily locate any performance issues.”

— Eric Krejci , Systems Specialist, EPFL

 

Second, vSphere with Operations Management leverages true automated operations for vSphere environments.  This VMware innovation reduces the administrative overhead and inaccuracies from tools using static thresholds (manual thresholds set for individual metrics) while analyzing all (not just a handful) of relevant vSphere performance metrics to ensure there are no performance or capacity “blind spots”.  Furthermore, to automatically correlate and expose the bottlenecks (with associated metrics) along with best practice remediation, vSphere with Operations Management ensures accurate management alignment that supports and further leverages our customer’s investment in VMware.

Advanced analytics easily identifies and shows root-cause to problem areas

Finally, vSphere with Operations Management raises the bar by redefining what operations management needs to be in today’s dynamic infrastructure.  Cloud customers simply were not finding effective solutions from their traditional, legacy IT management frameworks, or even 3rd party tools that are built on the same premise.   Even when considering other hypervisor / cloud products, the management ecosystem is at the heart of truly enabling the platform.  VMware vSphere with Operations Management clearly demonstrates the next step in simplicity of both cost and value through reliable, proven and innovative technology.

Going to VMware Partner Exchange 2013?  Be sure to check out these sessions on VMware management and the competition: MGMT1238, MGMT1369 & CI1523.

Twitter: @benscheerer

Study Shows Higher Costs and Complexity When Managing vSphere Using Microsoft System Center Virtual Machine Manager

The idea of introducing multiple hypervisors into your data center and managing them seamlessly from a single tool might sound appealing, but in reality, products claiming that ability today can’t deliver on that promise.  You introduced virtual infrastructure to simplify operational tasks for your IT staff, so why would you want to handicap them with a management approach that adds costs and complexity?  A study recently completed by the Edison Group and commissioned by VMware shows that is exactly what you will be doing if you introduce Microsoft System Center 2012 Virtual Machine Manager (SCVMM) with the hopes of using it to manage VMware vSphere hosts.

Microsoft touts SCVMM as a heterogeneous management tool with the ability to manage VMware vSphere and Citrix XenServer hosts in addition to those running Hyper-V.  IT managers might find Microsoft’s claims that they can, “easily and efficiently manage… applications and services across multiple hypervisors,” enticing. The suggestion by Microsoft is clear: don’t worry about complicating the jobs of your system administrators by introducing Hyper-V into a VMware environment because SCVMM provides a do-everything single-pane-of-glass control panel. Are their claims true?  Can Microsoft SCVMM really let you operate a multi-hypervisor data center without the cost penalties that come with staffing, training for, and operating across the isolated islands of management that would otherwise exist?

To find the truth behind Microsoft’s promises, we asked Edison Group to test VMware vSphere in their labs using both vCenter and the vSphere Client and Microsoft SCVMM 2012 to complete a set of 11 typical management tasks.  Edison’s analysts used their Comparative Management Cost Study methodology to measure the labor costs and administrative complexity of each task.  The tasks Edison Group studied were those that any vSphere administrator performs on a regular basis, such as provisioning new vSphere hosts, deploying VMs, monitoring system health and performance, configuring virtual networks, etc.

Higher costs and complexity when managing vSphere with SCVMM 2012

The results were clear and conclusive – managing VMware vSphere is much more efficient using vCenter than when attempting to manage it with Microsoft SCVMM 2012.  To complete the 11 typical management tasks Edison Group tested took 36% less time and required 41% fewer steps using vCenter and the vSphere client compared to SCVMM 2012.

Figure 1 Managing vSphere using vCenter takes 36% less administrator time than with SCVMM 2012

Figure 2 vCenter management of vSphere requires 41% fewer steps than SCVMM 2012

Jack of some trades, master of none

It’s not hard to understand why vCenter and the vSphere Client make life so much easier for vSphere administrators. As my colleague Randy Curry wrote, Microsoft SCVMM 2012 just doesn’t do a very good job of enabling vSphere management.  SCVMM’s incomplete or missing support for even basic tasks forces administrators to constantly jump over to the vSphere Client to get any real work done.  Microsoft was apparently more interested in being able to “check the box” for multi-hypervisor management when they built SCVMM 2012 than they were in providing a truly usable vSphere management tool. As Edison Group said in their report (available here or here):

Managing hypervisors using tools that are not specifically optimized to control all aspects of their operations risks impairing reliability, elegance, and ease of management, with potential adverse impact on the bottom line. Creating a truly successful solution requires deep integration and expertise in development.

Adding different hypervisors? Proceed with caution.

Multi-hypervisor IT shops are a trend that may be growing, but don’t expect a simple single-pane-of-glass management experience if you bring in a different hypervisor.  The testing by Edison Group clearly shows that management costs and complexity will be substantially higher if you attempt to use a partially implemented heterogeneous management tool like Microsoft SCVMM 2012 to manage a vSphere infrastructure. We at VMware realize that operating a 100% vSphere environment is not always possible and we’ve recently introduced our own multi-hypervisor management features with vCenter Multi-Hypervisor Manager and vCloud Automation Center to accommodate those cases. Rather than positioning those solutions as enablers of permanent multi-hypervisor environments, we’re offering them to help our customers manage heterogeneous pools of infrastructure until they can migrate their workloads to a VMware platform where they can benefit from our exclusive software-defined datacenter capabilities.

If you’re weighing possible benefits of introducing a second hypervisor, you may want to take the advice of Gartner’s Chris Wolf and stick to a single hypervisor unless you want maintain and pay for separate islands of management:

Multi-hypervisor… has serious tradeoffs if it’s the end goal for the production server workloads in your data center. Additional hypervisors for one-off siloed initiatives is often practical, but becoming less standardized in your data centers is anything but efficient.

Chris Wolf repeated that message at a session on heterogeneous virtualization we attended at the recent Gartner Data Center Conference. In fact, he stated there that no Gartner clients have succeeded in adopting a single-pane-of-glass multi-hypervisor approach. That’s refreshingly frank advice that should be heeded by anyone lured by Microsoft’s promises of multiple hypervisor nirvana.