5 traps that can spoil virtualization savings

How to keep unexpected expenses from eating up your return on investment

Predicting which next big thing in information technology will live up to its hype is tricky business. For example, it’s still anybody’s guess what kind of impact cloud computing will have on agency IT operations. For one former next big thing — server virtualization — the line is in, and the early calls were spot on: It is changing the way most agencies buy and manage IT.

The biggest selling point driving the move to server virtualization is cost savings. Agencies logically assume that by running fewer physical servers, reduced expenditures for hardware, power and data center real estate will create a collective bargain for IT budgets.

The benefits of virtualization

CDW Government asked federal information technology managers who have deployed server virtualization to identify what they see as the top benefits of the technology. Here is what they said:

  • 36% Improved utilization and capacity management of computing resources
  • 34% Reduced operating costs
  • 33% Reduced capital costs
  • 32% Improved continuity-of-operations plans

Source: CDW Government

“There is less procurement time and a perception, in some cases, that virtual servers are free or come at a much cheaper cost,” said Kent Armstrong, acting chief information officer of data center operations at the Agriculture Department.

Unfortunately, the savings that executives bank on with virtualization don’t always materialize. The problem is IT departments get hit with unexpected expenses that might not show up in the rosy return-on-investment calculators provided by virtualization software vendors.

“Virtualization often does save money, but the degree to which you can manage some of the unintended downsides will have an impact on how much savings you’ll actually see,” said Cameron Haight, research vice president at Gartner Research.

IT managers must do their homework to determine what cost savings are possible and then work to make those cuts a reality. Here are the five biggest cost drains agencies can run into and how to keep them from sinking anticipated virtualization savings.

Trap #1: Unanticipated management overhead

Rather than “set it and forget it,” server virtualization requires IT managers to actively configure and manage their virtual environments. The specialized tools required for virtual-server optimization can be pricey add-ons that expand the basic virtualization price tag.

“You’re typically looking at tool costs in the tens of thousands of dollars, depending on the size of the enterprise,” said Chris Wolf, senior analyst at the Burton Group.

Life cycle management utilities are essential because they help managers identify virtual machines that are no longer in use but still siphon funds for support and software licenses.

Configuration management tools help agencies ensure that all their virtual servers conform to security and regulatory compliance policies that guard against expensive breaches and noncompliance penalties.

By closely managing those areas, agencies can recoup some of the upfront costs of the tools. “Freeing up virtual resources that are no longer needed will control costs associated with hosting and software licensing charges,” Armstrong said.

Avoid the trap: Factor the cost of new system management tools into upfront ROI and cost analyses to avoid unexpected cost overruns when virtualization begins.

Trap #2: Running more hardware than you need

Until IT managers become familiar with virtualization, some will have trouble knowing how much physical computing horsepower is enough for their workloads. As a result, many managers excessively overprovision their servers to be safe. Caution becomes wasteful when agencies intentionally don't push the capacities of their hardware to avoid overloading processors.

Haight estimates that the average utilization of a virtualized server is less than 50 percent of its rated output. “That’s a lot of wasted capacity,” he said.

Adding to that problem, some hardware vendors or companies selling virtualization software provide skewed assessments to promote unnecessary investments in equipment and services, Wolf said. Vendors "may be selling overkill in terms of infrastructure to recoup the investment they’ve already made on the assessment,” he said.

Avoid the trap: Conduct audits using internal staff members or third-party consultants who don’t stand to gain by promoting overprovisioning.

A virtualization assessment should capture a profile of your server infrastructure and system utilization rates. It should also identify which applications are good candidates for virtualization and how many servers it will take to run the new environment.

“Instead of putting your finger in the air and saying, ‘I think I can put six applications per server,’ you can have a hard number that says you can put this many applications on this server for this profile,” said Jim Smid, data center practice manager at Apptis Technology Solutions, a systems integrator that includes assessments among its services.

The assessment will cut into cost savings, as some audits can cost tens or hundreds of thousands of dollars, depending on the size of the enterprise. “But it’s an investment that gives a clear picture of what’s really needed and what’s not needed,” Wolf said.

Trap #3: Licensing bloat

Agencies might face increased software licensing costs for additional operating systems, databases and application software when demand from business units results in a proliferation of virtual servers, USDA’s Armstrong said.

Licensing fees can also be unexpectedly high because software vendors enforce rules based on the number of processors that power applications. For example, an agency might own a two-processor software license purchased for a dual-core server that runs an application in the existing physical implementation.

But if the agency deploys the application on a virtual server that runs on a four-processor machine, a software vendor might require a license upgrade because of the additional number of available processors, “even though the application isn’t doing any more work,” Wolf said.

Another gotcha: Some vendors don’t support their software if it runs in a virtualized environment.

“If you have a problem and you call your software vendor, they may say, ‘Build [the application] in a physical server and then call us back if the problem continues,'” said Wayne Federico, CIO and vice president of technical services at Miro Consulting. “They may not be certifying their products on a virtual server.”

Avoid the trap:

Consider using software from vendors such as ManageSoft that use a database of vendor licensing policies to help organizations assess the licensing and compliance requirements of their applications, Wolf said.

Also, do a fresh request for proposals when it’s time to renew software licenses and negotiate terms favorable to virtualized environments.

Trap #4: Virtual server sprawl

Virtual server sprawl is an easy trap to fall into because the servers are relatively easy to launch and “there’s the perception that virtual means free,” Haight said. But he cautioned that agencies must monitor, patch, secure and maintain software licenses on all virtual servers, regardless of the frequency of use.

For example, some agencies mistakenly believe that fewer physical servers means fewer technical people needed to support virtualized servers. Armstrong noted that although agencies might become more efficient because of virtualization, the gains might not meet expectations.

“All of the server administration required on an operating system residing on a physical server is also required on operating systems residing on a virtual server,” he said. In addition, other personnel costs might accrue during the specialized training that IT staff members need to support a virtual-machine environment.

Avoid the trap: Institute a formal approval process for provisioning virtual machines so managers can control their numbers. Armstrong recommends that agencies should allow only a person with the authority to commit funding to request additional virtual servers.

“This ensures that customer program officials understand the cost implications associated with requests for additional virtual resources made by their technical teams,” he said.

In one case where virtual server sprawl was out of control, Armstrong’s group met with program officials to explain why costs were escalating and what they could do to get them under control.

The program officials formalized their configuration management processes and established a configuration control board to better control the growth of their environment, Armstrong said. They also started quarterly meetings with Armstrong’s office to review configurations and associated costs and identify systems that they can decommission.

Trap #5: Inadequate storage

Besides cost savings, one of the other benefits agencies seek with virtualization is improving computer system uptime. Agencies can achieve that goal by having a virtual server switch quickly from one physical machine to another when a failure occurs. That flexibility requires data to reside on pooled, networked storage arrays, such as storage-area networks, that multiple servers can access.

Most agencies have deployed at least basic SANs for some enterprise storage tasks, but those aren’t always efficient for supporting the rapid workload shifts among physical servers that take place when virtualization is in the picture.

Avoid the trap: Instead of adding more raw storage capacity to a SAN to accommodate new virtual servers, look for newer SANs that offer sophisticated, money-saving features, such as thin provisioning, which reduces the amount of unused storage space reserved for future needs. Another valuable feature is data deduplication, a strategy for eliminating large amounts of redundant data, thereby freeing storage space for new uses.

Without those capabilities, storage costs could get out of hand fast. “You might easily be talking terabytes of storage that would be needed to support a virtual infrastructure without those features,” Haight said.

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