Nicholas Mortimer
Flash Research Assignment # 3 – Virtualization and Cloud Computing
9/22/2011
Not only will virtualization save our company $5,280,000 in maintenance costs, it will also reduce space, energy and cooling costs. It will provide better energy-efficient power supplies and enhance the efficiency of hardware use and application performance. Server consolidation will allow our company to utilize our hardware resources.
Virtualization enables smooth integration of many IT projects and functions. When implemented correctly, “virtualization allows a logically integrated and managed infrastructure, allowing fluid movement across the portfolio of virtual, logical, and physical platforms, while enabling a holistic view of all resources”(Gartner 2011). Virtualization creates a virtual version of everything from OS to storage. Cloud computing is the delivery of computing as a service rather than a product where shared resources, software, and information are provided to computers and devices as a utility over a network. According to Gartner, cloud computing services are becoming popular among enterprises. The cloud can provide multiple services: system infrastructure, application infrastructure, full applications, information services, and business services. In order to maximize the benefit of the cloud, proper research must be done on what will work best for our company. VMWare is currently the virtualization leader and believes virtualization is essential for cloud computing. Allowing VMWare to virtualize our company will be the smartest decision we have ever made.
In our datacenter there are approximately 1,000 servers which each cost $8,000. In addition to the $8,000,000 purchase for servers, each one is currently costing our company
$2,000 a year for hardware maintenance, software maintenance, technical support, and power and cooling. Adding another $2,000,000 a year for three years, means our datacenter costs total to $14,000,000. According to VMWare, 70% of current IT investment remains focused on maintenance. A move to Cloud Computing not only will increase our flexibility but will also lower our datacenter costs. If we moved 80% of our servers as virtual machines under VMWare we could consolidate 10 physical servers onto a single virtual machine. If we can take 800 of our current servers and turn them into 80 high powered servers, our company would benefit greatly across multiple areas. Each high end server costs $16,000 and $3,000 per year for hardware and software maintenance, technical support, and power and cooling. Initial costs to buy the servers will total about $1,280,000 and will cost $720,000 for the maintenance of the servers over three years. The difference between the old servers and switching to VMWare is a difference of $12,720,000 in hardware. Our company will save $5,280,000 dollars on the maintenance and support of these servers over three years.

Source: Gartner 2011
Source: Gartner 2011
Works Cited

Cearley, David W., and Drue Reeves. "Cloud Computing Innovation Key Initiative Overview."
Gartner.com
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Dawson, Phillip. "Virtualization Improves IT Functions and Processes." Gartner.com
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2011. Web. 3 Oct. 2011.
Smith, David Mitchell. "Key Issues for Cloud Computing, 2011." Gartner.com
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Web. 3 Oct. 2011.