Virtualization Reality: Why Microsoft® Virtualization Solutions Deliver Value When Compared to VMware®

Hello everyone.  This week, I want to cover a topic that has been discussed on numerous blogs, articles, and even tweets over the last several weeks.  The topic is the cost comparison between Microsoft and VMware virtualization solutions.  As many of you know, we often cite the fact that for server virtualization, VMware's solution is 6x the cost of the comparable Microsoft solution.

The Microsoft Comparison

So how do we get to those numbers?  The calculations and how we get to those numbers is right on our cost comparison webpage.  On that page, we show a chart of the costs and features surrounding the comparison.  If fact, you can try the calculations yourself using the Cost Comparison Calculator.  To make it clear, this comparison uses the following parameters:

• Five servers with two processors each
• Includes the cost of the hypervisor and the management stack (including the associated management servers)
• 2 years of subscription/maintenance is included in both solutions
• List Prices for all software is used (Microsoft retail prices and VMware pricing off VMware’s pricing website)
• No Operating System cost

With those parameters, the results are pretty clear and the cost differential is very significant.  Some people point out that the vendors will discount their software.  That is true but the levels of discount differ amongst customers.  But just a quick check shows that even if VMware gave a 70% discount on their list price, the VMware software still costs almost twice as much as the Microsoft solution at retail price. 

This cost comparison also allows for one of the closest, apples to apples comparisons.  The cost comparison is based on the key differences that apply for most implementations, being the actual software and licenses that a company would have to buy to implement each individual solution.  It should be noted that all the features listed in the chart are included in the cost listed.  This is important because most VMware cost comparisons use the base cost figures but most VMware feature comparisons use features (such as Site Recovery, Lab Manager, AppSpeed) that cost thousands of dollars per host, the cost of which is never added to their comparisons.

There are other potential parameters, as we’ll discuss later, but the costs compared here will always be different between the Microsoft and VMware solutions, something that can’t be said of other parameters.  If you want to do your own comparisons, changing server numbers or different software editions from each vendor, you can use the Cost Comparison Calculator that is available off the Microsoft Virtualization website.

One question we get is why we didn’t include the cost of Windows.  The reason for this was based on feedback from our customers and partners.  It was pointed out to us that some customers already own Windows, so that cost isn’t involved.  Even for those who don’t own Windows, they would buy the Windows licenses for both solutions.  Finally, with our R2 releases, we have made Microsoft Hyper-V Server 2008 R2, our free, standalone hypervisor, available with true feature parity with the Windows Server 2008 R2 based Hyper-V.  Thus, customers can choose either Microsoft Hypervisor solution, have the same features and benefits, and in the end, the same net zero cost, allowing the removal of the OS cost from the calculations. 

Sharp eyed followers of this discussion will also note the cost comparison went from 1/3rd last year to 1/6th now?  How did that happen?  Two reasons:  We removed the cost of the operating system (which you can add back in via the cost calculator) and VMware introduced their Enterprise Plus SKU, which increased the cost of VMware for most Enterprise customers (since many of the newer features of vSphere are only found in Enterprise Plus and VMware is retiring the older, Enterprise SKU).

VMware’s Comparison

Not surprisingly, VMware doesn’t agree with our assessment.  :)  VMware challenges our statements but don’t actually challenge the cost comparison, as the numbers really speak for themselves.  VMware presents an alternative cost comparison method, which they label as Cost Per Application.  There are two very simple reasons why VMware went with this calculation.  First, by including additional costs such as Real Estate and Power, they attempt to cover the true cost differential in terms of the software purchased.  The second is that VMware then uses a white paper study to justify that VMware can run more VMs than Microsoft, claiming up to a two to one ratio. 

Let’s take a look at the first concept, the use of cost per application.  Like any other unit of comparison, a cost per virtual machine comparison is only as useful as the parameters it is based on.  In VMware’s case, there are several issues of note that you should consider.

• The comparison changes the cost ratios (since it adds cost, often the same costs on both sides) but the cost differential is still there. That means on like hardware, the Microsoft solution still costs less.
• Some of the cost parameters, especially for the Microsoft management infrastructure, seem focused on adding more physical servers to the configuration, thus more of the additional costs. 
• Other parameters can vary greatly, including what type of hardware (blades or 2U systems), how much memory is in each system, and what the cost of these systems are.
• The calculator ignores the fact that since the Microsoft Virtualization management infrastructure is an extension of the existing System Center tools, any company that already uses System Center can leverage their existing infrastructure.  That significantly reduces the cost of the Microsoft solution.

The most glaring parameter missing is that capability of the Microsoft System Center solution and the need to factor equivalent costs for the VMware side.  While VMware argues that their management solution is better than Microsoft (which we don’t agree with), VMware completely ignores the solutions that System Center brings to the application and service level.  This includes complete Patch Management, Software Distribution, Compliance, Inventory, Monitoring, and Backup and Recovery, for BOTH physical and virtual systems, from hardware to software, all the way to the service level.  To get the equivalent software solution for VMware, one would have to buy a significant amount of third-party software, most of which are licensed per VM, along with that associated infrastructure.  In fact, one of the most cost effective management solutions for VMware is the System Center solution, resulting in adding the System Center license cost and infrastructure to the VMware calculation.

The second concept is the use of memory overcommit, a feature that allows the running of VMs with more memory than is physically available.  The concept is essential to the calculator, as without it, the VMware solution just isn’t cheaper than the Microsoft solution.  Matt McSpirit, a Microsoft Technology Specialist, covers this pretty completely in his own response.

The increased consolidation ratios shown in the calculator is based on a single, VMware-sponsored study.  For an in-depth look at memory overcommit and the study behind the calculations, please read the Virtualization Reality white paper.  This white paper reviews the study itself, what the overcommit is, and what are the potential issues with it’s use.

Finally, the calculator doesn’t factor in the most important variable for a Cost Per Application calculation, which is the the application.  Without factoring in the application to be run, you can’t actually calculate the hardware and software cost or the consolidation ratios.  How much memory the VMs take, how they run, what additional software you might need, is all dependent on the applications that actually run in the VM.  If you factor in applications into the calculation, you get a much more accurate calculation but the results cannot be applied, implementation wide, to all VMs, which is what VMware is trying to do.

If the discussion on the merits of VMware’s calculator seems complicated, it is because it is complicated.  More importantly, while the calculator might be useful to estimate potential costs for virtual machines, what it is not good for is comparing differing solutions.  In the end, the final cost of implementation varies by company, technology, and applications.  Regardless of the various parameters, I’m confident that you find that the Microsoft solution will save money over an equivalent VMware solution.