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From our Virtual Reality blog. Link: Microsoft’s Virtualization ROI/TCO Calculator: Our Take | VMware: Virtual Reality.

We Reviewed Microsoft’s ROI/TCO Model

Some of you may have seen Microsoft’s recently released
virtualization ROI/TCO calculator. Briefly, the model purports to offer
an accurate cost/benefit comparison between Microsoft’s Hyper-V
offering and a “Competitive Server Virtualization Solution” – gee I
wonder who the competitive solution is…?  Microsoft is beginning to
advertise the calculator broadly in its partner newsletter and other
email blasts – and we’ve even had customers bring it to our attention.
Mainly, the VMware customers that have alerted us to the Microsoft
ROI/TCO calculator were confused by many of the model’s assumptions and
by the generated results – they wanted our opinion. So, we took a look.

Unfortunately We Had to Give It A Failing Grade

Of course the results were all hypothetical, because Hyper-V is not
yet available, but what we found when running a realistic scenario
through the model and then from reading the report’s fine print, is
that like most Microsoft version 1.0 products, the initial release of
this calculator has numerous errors, contains critical design mistakes,
and completely misses its mark. Any results generated from this model
are so unrealistic as to be completely worthless for accurately
comparing costs and benefits of alternate virtualization solutions.
(Maybe we all need to wait for the SP1?)

In Sum:   ROI/TCO Analysis = Good Idea ; Inaccurate Model = Bad Idea

It goes into deep detail. Aside from the too-high pricing listed for VMware and comparing it to below-list pricing for MSFT, my favorite point:

The Model Incorrectly Calculates Microsoft Licensing Costs
In
the scenario we ran, Microsoft’s tool assumed 71 Windows Server
Standard Edition licenses for 414 virtual machines running on 71 hosts.
Since each Standard Edition license grants rights to run 1 VM, the
model’s results leave 343 VMs in our hypothetical datacenter running
out of compliance. Microsoft may claim that the TCO/ROI calculator is
not a licensing calculator, but how can it calculate accurate TCO
estimates using inaccurate licensing assumptions?