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I keep hearing a lot about virtualization and a lot of claims that it helps reduce IT infrastructure costs.

How exactly is the latter achieved? Is the benefit coming from running several virtual machines on one powerful machine that is cheaper and occupying less space or is it coming from anything else?

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3 Answers 3

You seem to have hit the nail on the head - 1 VM host running say 8 VM's will likely be cheaper and much smaller than the 8 seperate machines. Don't forget the significant cost of extended (and maybe further extending of) warranties. Also if this saves purchasing various brand/generations of servers, this saves you familiarising yourself with the varying hardware.

However when virtualising, think of the cost of downtime as you are basically putting all your eggs in one basket to a varying extent, unless you have a 2nd backup VM host for high availability. This then probably requires a SAN which becomes a single point of failure unless duplicated.

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The "multiple VM hosts + redundant SAN + infrastructure" cost may still be less than having to buy discrete servers to provide the same level of redundancy. Apart from that, if all you require is availability to multiple VM hosts, the SAN can be iSCSI-based on commodity hardware at a fraction of the cost of a true SAN. –  adaptr Jan 18 '12 at 13:58
    
Initial costs are higher for proper redundancy, but you're supposed to make it back in savings to cooling and electricity use. –  Bart Silverstrim Jan 18 '12 at 14:01
    
Also, as long as the VM still presents the same interface to the guest OS (which is essentially a software thing), you can exchange the host machine, allowing one to move services to new machines without having to reinstall the OS. –  Simon Richter Jan 18 '12 at 16:39

Extensive studies show that on average, a production server utilizes only about 10~20% of its available resources (CPU, memory, disk).

The primary reason for this is simple: if you don't allow for headroom for future growth or daily or periodic traffic bursts, the system will suffer performance degradation.

However, if you can collect 5 or 10 of these server instances on a single piece of hardware, chances are that not all of them will require extra resources at the same time. So you still need the exact same amount of actual physical resources, but overhead can be managed and provisioned much more efficiently.

Don't underestimate the advantages of the ability to instantly migrate a complete server from dead hardware to working hardware, either.

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Desktops can now be virtualized with (for example) VMWare View and Teradici PCoIP zero clients. While the zero clients are less expensive than a traditional PC, you will still need high-end servers, a SAN, etc. just to get started. Therefore, from a cost perspective, you need to virtualize a lot of desktops just to break even. However, very large deployements (in the hundreds or thousands) can save money this way.

By using a VDI solution you also will save money by standardizing on system images which can very easily be updated or (if need be) reverted.

When PCs get outdated, swapping them out now becomes a thing of the past. It is much easier to swap out a few old servers for new servers than a bunch of PCs.

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