Reducing the cost of virtualization using Microsoft Hyper-V and System Center

Reducing the cost of virtualization using Microsoft Hyper-V and System Center

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My name is Elliott Morris, manager of what's known within Microsoft’s Server and Tools Business as the "War on Cost team." The team’s role is to collect operational data from business and public sector customers to understand their costs for deploying, operating and managing Microsoft server and desktop software. We use this information to improve our products, and we also use the opportunity to share our findings, as appropriate, with our customers and partners, such as this whitepaper on optimizing desktops and this whitepaper on managing servers. Why do I tell you this? To help you understand our role within Microsoft and to demonstrate Microsoft’s commitment to help our customers operate Microsoft software as efficiently as possible.

One of our recent studies was to understand the recurring labor costs in managing and operating Microsoft Hyper-V versus VMware’s competing platforms. The licensing costs of these products are an important consideration for customers, as are the benefits of physical-to-virtual server consolidations. Both items are often discussed to some length in the industry. However, I’ve seen no significant published research that compared the more important recurring operational costs of managing production virtual servers. Our study was originally intended to be used internally within Microsoft to feed into our product planning process, but the results were so eye-opening that they have been made public, which you can download here.


I would recommend reviewing the methodology of the study as the findings will be more meaningful. Here are some key points:

·        The respondents were located in the U.S. and were surveyed by an outside market research firm using a double-blind survey.

·        We focused on Hyper-V and ESX/vSphere only.

·        Respondents represent organizations having 500 PCs or more.

·        The one-time costs were either assumed to be well known (e.g., licensing) or similar enough (e.g., planning, setup) that these costs were out of scope.

·        The statistical “confidence interval” is 7.76% with a confidence level of 95%.


Here are a few summary points from the study:

·        The IT labor costs varied widely based on the customer’s IT process maturity, but the average costs were $10,357 per guest when hosted on Hyper-V versus $13,629 per guest when hosted on VMware, a 24% savings for Hyper-V versus VMware, and Hyper-V customers at every maturity level showed lower costs

·        The average density of Windows Server guests per server was 30% greater for Hyper-V (7.9) than VMware (6.1

·        Customers using Microsoft system management products to manage their hosts had 15.6% lower annual IT labor costs ($9,486) per virtual machine than customers using VMware vCenter ($11,238) and 36.7% lower costs than customers using management products from a mix of vendors ($14,988)


So what should you make of these results? First, don’t ignore the cost to operate, manage and support the products you are using or are considering to use. The acquisition costs are usually just a piece of the overall total cost of ownership. Second, be careful when reviewing claims, such as VM guest densities, from vendors. Our study used a statistically significant sample size of 154 companies, yet we have seen vendors make bold claims (example, see this whitepaper from VMware) when using a sample size of only 3 companies.


You should also know that we don’t have all the answers to where the cost savings originate. Microsoft focuses on building products that are well integrated and easy to use, and thus reduce recurring operational costsI'm confident that this explains much of what the study found. However, I'm in the process of studying, at a detailed level, how Hyper-V and System Center save customers time and thus money. Stay tuned.


Feel free to leave questions in the comments section below, and I’ll do my best to answer your questions.



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  • Very interesting, but with no study on the cost of the Strategic Planning, Deliver/Deploy, and Operate/Setup Costs, this study does feel incomplete. An argument could well be made that because ESX has been around longer, the planning is easier (since there is a history of deployments to draw from) and the costs are much lower. Whether that is enough to offset the expense of running costs being higher remains to be seen.

    I imagine not, given the $3,430 difference per VM. Assuming a lifespan of five years for the deployment, Hyper-V would need to be hideously complex to warrant that kind of Planning cost. Given that I find it easier than ESX, I assume everyone else does too.

    FD: MS Partner, used ESX for 5 years. Largely Virtualiser agnostic.

  • Peter,

    Thanks for your comments. When we looked at the lifecycle for deploying and managing virtual servers, and looked specifically at the activities involved, we felt that the processes, and labor involved, for planning and deployment would be essentially the same for either the Microsoft or VMware platforms. You bring up a good point, however, that there may (or may not) be some efficiencies gained by VMware customers due to more experience, and information, for that platform being available. This is something we need to investigate.

    However, I would argue that any difference, if there is any, would be negligible. The biggest cost savings will come from the day-to-day operations and management activities, as those activities are recurring, which is why we focused on those costs in this study.


  • What ?  I can fully appreciate the idea that VMware due to time in market and available IT market pool could be construed as being a potential cost savings.  Unfortunately having used both products I cannot for the life of me see VMware being as complex as it is .. requiring less time for planning and deployment.  In addition I believe if you start looking forward at potential upgrades the complexity of the product brings great cause for potential cost increases.  At least in the area of planning and deployment.

    Here I sit having left a Hyper-V shop.. and now in the doldrums of vSphere 4.1 .. thinking.. why would anyone continue to invest in what is by all accounts equivalent to Hyper-V .. for more initial and recurring costs in addition to the increased level of complexity brought on by the *nix hypervisor and bolt on products needed to manage it.  I suppose if you were in a heavily virtualized *nix environment it may be the best option.. I cant say .. since I have only been in primarily MS shops..

    Just ramblings worth less than .02 ;)