Getting a bit drunk on enterprise dollars.

It's official - Gartner's Thomas Bittman thinks VMware might be drunk.

Denise Dubie has a great article on virtualization management capabilities and a great quote describing the upcoming battle between VMware and Microsoft for the x86 virtualization market, he is quoted as saying:

"The enterprise is going to be very leery of Microsoft, but the on-ramp to VMware is a bit steep for small businesses. VMware doesn't want to lose that potential business, but the company was getting a bit drunk on enterprise dollars," says Thomas Bittman, Gartner vice president and distinguished analyst.

The abundance of enterprise dollars spent on virtualization is because virtualization fixes so many problems, reduces power, reduces physical requirements, makes x86 hardware more efficient, increases uptime, allows resource management at the OS workload level, etc.

One of my favorite reports is one that IDC did in 2006 – it depicted– IT investment to be higher spending in Year 1 on a VMware / virtualization project but that in Year 2 and Year 3 and possibly Year 4 – IT departments would avoid spending on server hardware – you would just fill up the empty capacity of the system you built in 2006.

It looked good on paper, spend more now, avoid spending later.

Unfortunately, multiple issues caused IT departments to run out of capacity, VM sprawl occurred, single core and dual core servers could not hold as many VMs as the equivalent quad core servers.

Often P2V migrations went unchecked, servers have excess CPU capacity but not enough Memory, VMs are consuming too many resources and as a result enterprises are oversizing virtualization projects or not driving up VM density to get the biggest bang from their investment.

Avoid the hangover from “getting a bit drunk” and having to purchase new hardware, more memory, bigger servers, etc. by getting a resource management tool in place and understanding what resources your VMs are using and where you have capacity in virtualized environments.

The Calm Before the Storm

Rakesh Kumar of Gartner published a white paper last fall entitled "U.S. Data Centers: The Calm Before the Storm".

In it he says U.S. Data Centers "are facing considerable disruption during the next three or more years" and they are facing it from a few things:

• Energy
• Green IT initiatives
• Floor space demands
• New technology

No mention of virtualization unless it's the source of all of the above - impacting energy, trying to be a green IT initiative, trying to help with floor space and it is a new technology.

What should CIOs be going now to prepare for this storm?

• Consider Data Center Colocation - see who has a data center nearby and see who has fiber to it - you will need 1 GB or 10 GB links depending on the size of your enterprise and hire some good financial people to determine if there is a decent ROI on moving your Data Center to a third party provider.
  
  Also ask the beancounters to factor in running your own fiber, this may not be as expensive as it once was, carriers may have available strands and you may only have to do the last mile to your location.
  
  
• Worry about your power bill - energy costs have increased, consider off peak times, VMware's introduction of DPM is the ability to power on ESX hosts and then move VMs to take advantage of lower density environments (think your overnight routines that chew up alot of CPU) with DPM you can spread them out to take advantage of lower power costs.
  
  
  Before 6 AM and after 6 PM may be lower rates ($$ per kw/hr).
  
  
  
• Invest in Systems Management tools - get something that helps you identify who is using your resources and driving up your costs. Chargeback by VM will allow you to fairly delivery charges for Data Center usage by the business unit using the most resources.
  
  This type of transparency will priortize which business unit needs to fix their Data Center problems - be it running highly transactional reports during the day that could be run at night, poorly coded applications that use too much memory, too much CPU, etc.
  
  Start a list of power supplies in the Data Center - servers, SANs, etc - you will be shocked to see newer servers may have power supplies running at 900-1300 watts - that's nearly 1 KW per hour per server.

Remember its this simple:

Servers = Power A = Heat = Cooling = Power B.

To fix this:

1. Reducing your physical servers
2. Reduces your power A
3. Reduces your heat
4. Reduces your cooling
5. Reduces your power B.

Now just get the financial data lined up to show that a server reduction project (i.e. virtualization) may costs some $$ but it be offset by the cost saving of reducing power A and B.

One Quad or Two?

One of the best resources on the Internet for VMWare implementation is the VMTN community forums - its top notch.

This week there was a discussion about budgets and performance (where finance always mixes it up with IT (that and Chargeback)).

The post asks about the value of two medium-speed (1.6 - 2 Ghz) QuadCore CPU's ($$) vs. one high speed (3.33 Ghz) QuadCore CPU ($$$$).

I liked William Bishop from Huntsville Hospital response - "You'll get better density on the dual socket". He prefers the "dual proc, quad core setup" and has been "adminning vmware from some of the first dual cores to the newest quad cores."

I wonder if he has done anything with 4 socket x QuadCores?

Density is important - it's going to help you drive down your per VM costs and generate better ROI on the dollars invested in a virtualization product.

It's all about the ratio.

VKernel is an advocate of running your hardware at high levels of capacity. I know that we would see record-breaking ratios of virtual machines to server hardware.

• A major worldwide financial services organization achieved a 12:1 consolidation ratio and increased its central processing unit utilization by 30 percent.
  
  
• An Indian petroleum refining and distribution company achieved a 17:1 consolidation ratio and expects to increase that to 30:1 with additional CPUs and RAM.
  
  
• One of Italy's largest banks improved its server utilization rates by 100 percent.
  
  
• A leading US faucet manufacturer saved $250,000 in hardware costs by reallocating existing units instead of purchasing new, achieving a 10:1 consolidation ratio.
  
  
• A South American energy company consolidated its servers by a 20:1 ratio.
  
  
• A federation of trade unions in Singapore consolidated its servers by 46:1, achieving a 26 percent savings.
  

Smallest is 10:1 and largest is 46:1.

It's all about the ratio.

Virtualized Dataceter Brings New Challenges

Right now an average US corporation has about 7% of its Datacenter virtualized. As organizations continue to virtualize servers they will face 3 new management challenges:

1. Explosion in the number of virtual servers. User have already figured out just how easy it is for IT to create new virtual servers. The number of requests for new virtual servers will continue to skyrocket

2. Sharing of resources: memory, cpu, storage and network . In the traditional data center where one application server was dedicated to one application, no sharing of resources took place. That's not the case anymore in the virtualized datacenter

3. Servers have grown "legs". In the traditional datacenter we did not need to worry about servers moving around the network from one location to another. Now we do.

In the next post I will explore how VMWARE administrators can address the 3 new challenges