Virtual Environments or Cloud Computing? The Best Choice for SMBs


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Pressed to reduce IT costs, SMBs are investigating virtual environments and cloud computing. Both strategies reduce the size and control the expansion of data center to cut hardware, power and cooling, space, management and disaster recovery costs. Similar in their ability to reduce costs, virtual environments and cloud computing differ in initial and ongoing costs. Cloud computing introduces management risks that many SMBs are unable to hesitant to take. Implementing virtualization offers SMBs offers a way to start saving money and open a pathway to cloud computing. Complete virtual infrastructures provided by Dell and VMware allow SMBs to transform the cost structure of their data center while improving service to their growing business.

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Virtual Environments or Cloud Computing? The Best Choice for SMBs

  1. 1. Virtual Environments or Cloud Computing? The Best Choice for SMBs Contents Introduction/Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Unsustainable Costs of Physical Environments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 What are Virtual Environments and Cloud Computing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Budget Trimming Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Comparing Costs and Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Choosing the Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Implementing a Virtual Environment — the Dell/VMware Solution. . . . . . . . . . . . . . . . . . . . . . . . . 6 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Brought to you compliments of: Abstract Pressed to reduce IT costs, SMBs are investigating virtual environments and cloud computing. Both strategies reduce the size and control the expansion of data center to cut hardware, power and cooling, space, management and disaster recovery costs. Similar in their ability to reduce costs, virtual environments and cloud computing differ in initial and ongoing costs. Cloud computing introduces management risks that many SMBs are unable to hesitant to take. Implementing virtualization offers SMBs offers a way to start saving money and open a path- way to cloud computing. Complete virtual infrastructures provided by Dell and VMware allow SMBs to transform the cost structure of their data center while improving service to their growing business.©2011 Dell, Microsoft and TechTarget
  2. 2. Back to top The Unsustainable Costs of Physical Environments Sustainability. That’s the new watchword. Small and medium-sized businesses (SMBs) in every sector are looking for operational efficiencies that reduce their expense footprints in order to sustain profitability. (So much the better if they reduce environmental footprints as well.) IT certainly supports revenue generation but its contribution to costs is noticeable. That’s why SMB comptrollers are looking to IT managers to control costs while supporting business expansion. IT infrastructures sprawl as businesses grow. According to IDC research, corporate data grows at a rate of 60% each year. Data expansion requires the addition of servers and storage devices. Servers and storage require space which, in turn, necessitates data center expansion and additional power and cooling capacity. Disaster recovery plans that rely on system redundancy and backup procedures also add to new costs. And, IT management overhead takes a hit and staff grows in terms of headcount or overtime expense as technicians keep up with maintenance and oversight. Those increased costs are all occurring inside the data center. Out in the office, new employees require new laptops that can access the data they need from any location. And, since those assets carry important company data on hard drives, security, backup and restoration has to be in place and well managed. Consider a quick, back of the envelope annual cost estimate driven by a typical SMB that relies on a physical IT infrastructure. 10 new servers – Assuming that a new server will cost approximately $1,800, 5 new physical servers (which could be either replacements or new servers to run additional applications) would cost $18,000. 10 new employee laptops – There are a wide range of business laptops available but assuming a cost of $1,500/laptop, 10 new employee laptops would cost $15,000. power and cooling costs – At a cost of $200/server/month, the 10 new servers would add $24,000 to utility costs. space costs – These will vary by location but building owners never provide a discount on data center space. Look at the space currently consumed by a typical server and extend that to accom- modate new servers that will be needed to accommodate growth. management overhead – Every server, installed application, and installed operating system requires management in the form of repairs, updates, patch applications, security monitoring, and upgrades. Calculate the management cost of a typical server, application, and operating system and then extend it to cover additional servers and software installations that are anticipated. The multiplier effect that business growth has on IT budgets has made physical IT infrastruc- tures unsustainable. SMBs are finding ways to contain costs through virtual environments and cloud computing. Both strategies offer technology and financial benefits. And, as they reduce the size of the data center, or at least control growth, they are environmentally beneficial as well. Choosing the right cost cutting strategy depends on understanding how they are implemented, how they are managed, and what costs they impose.2 ©2011 Dell, VMware and TechTarget
  3. 3. Back to top What are Virtual Environments and Cloud Computing Virtual environments and cloud computing have one important similarity. They both reduce the size of an SMBs IT infrastructure by limiting the number of required servers and storage devices and “thinning” the capacity requirements of employee laptops. In terms of implementation and management, they are quite different. Virtual servers reduce the size of physical IT environments by allowing a single server to host multiple operating systems and applications. That capability consolidates the number of servers at rates as high as 15:1. The net effect is a data center with fewer components and greater capacity. The multi-core processors inside virtual servers typically run at 80% capacity leaving 20% idle. That’s far more efficient that single core processors that run at only 5–15% of capacity. Downtime caused by routine maintenance, system failure or disaster is minimized by migrating an operating system or application to another virtual server. The ease of migration business-critical systems from server to server provides a valuable, no-cost, safety net. While virtualization does not reduce the number of employee computers required (a majority of employees always require access to their own laptop), the hard drive capacity requirements of end-user equipment is reduced. Virtual clients log into servers to access secure, individual identities. Those identities specify the operating systems, applications, and data that are available to the end-user. By moving operating systems, applications, and data off of hard drives and onto servers, end-user computing environments are easier to manage and maintain. Mobility is also enhanced as users gain access to their identities from any networked device. Cloud computing goes a step further to remove the physical instances of operating systems, applications, and data storage to an off-premise infrastructure managed by a service provider. (Large enterprises might deploy their own, private cloud.) The service provider operates a multi- tenant system that provides pay-as-you-go service for on-demand use. Pricing is a function of CPU usage, storage, bandwidth, and user accounts. Cloud computing replaces hard-wired resources with web-connectivity and secure access. A contract with a service provider can replace all or part of an SMBs data center and associated overhead. Budget Trimming Benefits Virtual environments and cloud computing both enable SMBs to reduce the number of servers inside their data center. That leads to a reduction in several significant costs. 1. Ongoing power consumption is reduced. As stated above, it costs $200 per month to power and cool a single server. That’s $2,400 per year. With virtual server consolidation rates as high as 10:1 and with cloud computing’s ability to negate the need for all or some servers, power and cooling savings alone can be significant. Power and cooling savings are also the largest component in the environmental benefit of virtualization or cloud computing. 2. Data center space requirements shrink or are controlled. It’s important to remem- ber that servers not only require the space they occupy but buffer zones for cooling and air circulation. According to an IDC Datacenter Trends survey, virtualization defers data center space costs by $1,000/square foot.3 ©2011 Dell, VMware and TechTarget
  4. 4. Back to top 3. Managed overhead is reduced or controlled. When there are fewer physical assets that require attention (replacing parts, updating or patching software, security, deployment, etc.), IT staff can forego new hires and focus on other strategic, revenue-generating projects. SMBs will derive different levels of savings from virtualization and cloud computing based on the extent of their investment in each strategy. However, the desire to save money alone doesn’t help an IT manager choose the strategy that will best serve his SMB. Comparing Costs and Risks The differences between virtual environments and cloud computing are highlighted by their associated costs and the risks they introduce. Since savings are realized in both strategies, it’s a careful consideration of costs and risks that helps SMBs decide which strategy is most appropriate for their operation. 1. Initial and ongoing costs – Virtual environments require upfront investment in virtual- ization software and servers with multi-core processors. (End-user computing hardware does not have to be updated immediately. Client savings come when “thinner” clients are purchased to outfit new employees or replace old computers.) However, returns on that investment are quickly apparent. A February 13,2009 Forrester Report, The Total Economic Impact™ of Dell’s Server Virtualization Solutions, found that organizations could experience return on investment, greater than 100% payback, in just one year. Virtualization can reduce the time it takes to reimage a desktop from three hours to a few minutes. Calculating that savings over the number of deployed desktops and time will show significant savings — some coming immediately after virtualization is deployed. Other immediate savings will come from disaster recovery; virtualization reduces downtime from hours or days to minutes. Downtime costs a lot both in terms of lost revenue opportunity and IT overhead. Return on investment will be realized the first time planned maintenance or an unplanned server outage occurs and then every time simple migration from one virtual server to another preserves operating system, application, and data access. Cloud computing does not require an initial investment in hardware or software though IT managers will have to specify number of users and estimate cloud usage in order to contract for a service level. Service costs vary according to length of contract, geographic region, number of reserved instances, hours of baseline use and hours of peak use. Gener- alized costs might be around $100 per user per year but that’s for a base level of services. Cloud computing costs are typically much higher as end-users want to add-on features like iPhone accessibility or scheduling applications. Other getting-started costs could include changes in internal architecture to integrate cloud and non-cloud applications, the replacement of legacy applications that won’t work in the cloud (which might also require end-user training), and operational or technology changes needed to determine when capacity has be boosted or turned-off. (Service providers don’t provide that kind of monitoring). Data backup costs can also be surprising, especially if data growth is fast and unmonitored.4 ©2011 Dell, VMware and TechTarget
  5. 5. Back to top 2. Security – In virtual environments, IT management sets and implements corporate security policies for in-house virtual environments which include authorization, security controls, and staff access to applications and data. Data in the cloud is secured by external service providers. It is not resident on internal servers or under the watch of corporate IT. 3. Control – Virtual environments are owned and controlled by the SMB. The quality and condition of servers and storage devices is known and there is visibility into maintenance tasks and schedules. Monitoring allows IT staff to understand usage patterns, plan for maintenance, and anticipate needed upgrades in bandwidth or CPU capacity. Cloud computing services and the hardware that runs them are controlled and managed by service providers. Maintenance is typically assured by a service level agreement but clients have no direct knowledge of the overall replacement or maintenance policies and schedules. An SMB does have to find ways to monitor cloud computing service usage in order to increase or decrease capacity. Service providers do not automatically toggle ser- vice up and down as needed which means that SMBs could be paying for more capacity than is necessary or suffering productivity loss by not contracting for enough service. Given the lack of control over cloud computing service providers, IT departments have to make contingency plans should service levels or security assurances not be met. Will it be possible to move to another cloud without making infrastructure changes? Will a new cloud serve the same applications and data for the same costs? If services have to be brought back into the corporate data center, will it be possible to deliver them from the current infrastructure or will new investment have to be made? 4. Platform service and reliability – Virtual environments are highly reliable. Easy and automatic migration of operating systems, applications, and data from one server to another provides a built in safety net for planned and unplanned outages. Service level agreements hold cloud computing providers accountable and responsible for uptime. It’s critical that clients receive assurance that services providers can actually meet SLAs which typically fall just short of 100%. Should a server fail and data loss occur, service providers will often provide monetary compensation. Lost data is lost data. Restoring information takes time and imposes costs. Choosing the Strategy Given the lack of control over cloud computing management, it’s often very difficult for SMBs to move entire data centers into the cloud. Trust in the service provider is essential and must be earned so SMBs might choose to experiment with less essential applications first. Compli- ance issues — HIPAA, SOX, and other mandated regulations that specify data security and include auditing — often preclude companies from placing core applications and data in the cloud. Other applications, even those that are not bound by compliance mandates, might be so central to customer service, product development, or marketing strategy that an SMB doesn’t want to remove them from internal management and control. There is a clear financial case that favors SMB adoption of virtual environments or cloud computing. The decision of which strategy to choose is less clear simply because the stakes are so high. Saving money is important. Protecting data and supporting productivity is even more essential.5 ©2011 Dell, VMware and TechTarget
  6. 6. Back to top Virtualization offers SMBs a pathway to cloud computing. Implementing virtualization offers immediate financial benefits for all parts of the IT infrastructure, core and less essential applications, and allows the end-user community to experience logging into identities and accessing applications and data from the network rather than their hard drive. They also learn how to access work environments from any number of connected locations. That will make their move to the cloud extremely easy. Meanwhile, IT departments can analyze usage of various applications, sort out compliance or other security issues, and eventually invest in cloud computing relationships and contracts that make the most financial and operational sense. Implementing a Virtual Environment — the Dell/VMware Solution Implementing a virtual environment does require investment in hardware and software. Together, Dell and VMware offer a solution that eases implementation in the data center and end-user community and ensures that SMBs are getting the greatest, most immediate benefit, from virtualization. Virtualization Software VMware vSphere4 and VMView virtualize SMB data centers and end-user computers. vSphere 4 allows SMBs to achieve server consolidation rates as high as 15:1. That means that operations currently running on 15 physical servers can reside on one physical server that houses 15 virtual servers. vSphere4 also provides IT staff with central management and performance monitoring. They gain visibility on application usage, monitor server performance, and proactively adjust the environment to maintain or boost productivity levels. IT productivity is boosted as well with automatic patch and update management. Hardware independent failover allows IT to migrate the work of any virtual server to any different physical server. Agentless data backup and recovery eliminates the need to install software on servers and supports automatic backup processes. VMview turns traditional desktops into virtual, managed service desktops. Identities, each one particular to an end-user, are delivered from a central location. Desktop image and storage requirements are reduced, as is the need for expansive hard drives on end-user computers. Desktops can run multiple operating systems or application versions without being specially configured. The creation of desktop pools simplifies provisioning shortens IT task lists. Identities are available from a wide-range of LAN or WAN connected, end-user devices. Anit- virus, anti-malware, and user-authentication capabilities protect corporate data. And, with no single point of failure in the system, access to applications and data is highly reliable. Hardware Configured for Virtual Environments Dell offers a broad array of servers, storage devices, and laptops that support high performance and reliability across virtual infrastructures.6 ©2011 Dell, VMware and TechTarget
  7. 7. Back to top Servers – Powered by Intel multi-core Xeon processors and equipped with dual internal SD (Secure Digital) modules and redundant components (fans, power supplies, etc.), Dell PowerEdge servers have no single points of failure. Redundant components are hot pluggable; IT staff can swap out components that have failed while servers are up and running. End-users do not lose access to applications when fixes are being made. Intel Xeon multi-core processors offer 6.36 times better performance per watt than single core processors. That means that intense data retrieval processes, for example, run fast. Intel Xeon processors are also known for energy efficiency. Power consumptions is scaled to workload. Even if servers are left on to accommodate around the clock workers and off-hours processing, less energy will be used at off-peak periods. That adds power savings benefits above those gained through server consolidation. Storage – Dell EqualLogic storage devices, which like Dell PowerEdge servers come in a broad array of configurations, are built to support virtual environments. All devices assume database growth and can scale out performance and capacity. SMBs purchase only the storage they need knowing that expansion can easily happen at any time. This prevents over purchasing and under- utilization. It’s also why these devices are considered extremely cost-effective. Like PowerEdge Servers, EqualLogic storage devices have redundant, hot-swappable compo- nents (fans, power supplies, disk drives with hot spares). Those features along with a fault- tolerant, redundant controller and enterprise-class RAID protection enable devices to offer 99.999% availability. Desktops and Laptops – Dell offers a broad array of desktop and laptop configurations. Under- standing how end-user computers will be used, what processes they will run, and what level of mobility they have to support will enable you to choose a computer that meets requirements. Specification and Implementation Services Since a virtualization strategy is typically driven by a need to keep IT costs from spiraling upward, it’s important to start realizing financial benefits upon implementation. Fast return on investment is incumbent on implementing a virtual environment that is tuned for the work and people it supports. Dell offers a high-value vendor relationship for SMBs that are implementing virtual environ- ments. Dell consultants help IT managers specify the servers, storage devices, and desktops and laptops that are needed for initial deployment. Complete solutions are fully configured and tested before they are shipped. Servers and storage units are ready to go right out of the box; software is installed and options set. Dell technicians understand SMB business models and technology environments. Technicians are able to offer one-on-one advice and help IT managers inside SMBs anticipate and plan for growth. They are able to walk through expansion plans and make suggestions for ways to further consolidate servers, implement security, scale storage for growing databases, and reduce power and cooling requirements. Given the broad range of Dell products and services and experience with virtual environments, SMBs can consolidate vendor relationships at the same time they are consolidating equipment. Reducing the number of vendor contacts is another way of reducing IT workload.7 ©2011 Dell, VMware and TechTarget
  8. 8. Back to top Conclusion Virtual environments and cloud computing both cut data center budgets by reducing the number of servers required, power and cooling costs, floor space requirements, management overhead, and disaster recovery expenses. However, the risks of downtime and inability to directly manage security, maintenance, system monitoring, and information access often present roadblocks for SMBs that must comply with federal regulations or are hesitant to relinquish control. Many SMBs will benefit from implementing virtualization for its own benefits and as a pathway to cloud computing. Together, Dell and VMware are providing complete virtual environment that significantly reduce IT costs while increasing the computing capacity of growing SMBs.8 ©2011 Dell, VMware and TechTarget