Virtualization TCO: Fact or Fiction?

“The nine-month ROI that vendors might advertise for their latest and greatest technologies can actually average three or four years, according to our clients that have crunched the numbers for their hosted desktop virtualization deployments,” Forrester wrote. “Why? Because the upfront infrastructure and licensing costs far outweigh the upfront benefits.”

This is especially true when you consider the high cost of the storage infrastructure needed to support virtual desktop deployments. In fact, Wikibon recently posted an intriguing video interview on how storage represents the biggest drag to virtual desktops. It points out that for every $1 spent on virtual desktop deployments, $3 to $10 is spent on storage.

To offset these numbers and make the cost of storage seem reasonable, vendors have spread the large cost over thousands of desktops. But as desktop Guru Brian Madden points out on his blog, we can clearly see the problem when we consider trying to deploy a hundred desktops versus thousands of desktops. The ROI and total cost numbers simply don’t work. And in the IT industry, I think we’ll all agree that Total Cost of Ownership (TCO) remains one of the most critical metrics of success. But it’s also a metric that can very quickly lead to heated debate among vendors.

Just last week, Citrix spoke out to refute the suggestion that VMware’s View desktop virtualization product offers the same cost benefits as server-based client computing.

VMware cited data from Gartner to support claims that its View-based client computing deployment in the education market, in conjunction with thin client vendor Wyse, achieved TCO “8 to 13 percent lower than that of a locked and well-managed PC deployment, and up to 44 to 47 percent lower than that of an unmanaged desktop deployment.”

Suffice to say, Citrix, one of the world leaders in server-based client computing, is far from impressed or convinced. While we won’t comment on who is right or wrong on this issue, or refute the stated metrics, this public disagreement has highlighted some important points.

Vendors have metrics and measures in place to support their claims on the operational costs you will incur and of the ROI you can expect from a virtualization deployment – we are no exception – but these will always be an approximation at best of what a company will achieve in practice. Every company is different, every working practice is different, and every company mindset is different. All these will have a bearing on the operational cost of any IT project, and that’s even before we get into hardware and software. For that reason alone, TCO can never be considered a hard and fast guarantee of running costs or savings to be had. It’s merely a guide, a reference point to give you something to aim for and benchmark against. It’s also not a guarantee.

It also raises another important issue – the market’s understanding of the differences between server-based client computing and virtual desktop infrastructure (VDI), which is considered the more accurate description of VMware’s View solution. This is important, as perceived TCO for a VDI deployment does not mean you will achieve the same from your actual desktop delivery activities, of which VDI is a component of a larger server-based client computing whole.

For VMware and Citrix, the stakes are high. VMware leads the server virtualization market by a wide margin, but faces growing competition from the likes of Microsoft. Meanwhile, Citrix claims to account for around 70 percent of the desktop virtualization market.

Moves by an 800lb gorilla such as VMware into the lucrative and growing volume desktop virtualization space will present a big challenge not only for the existing vendor community, but also prospective customers. That’s why it’s important for buyers to be clear on the differences before making any purchasing decisions. Don’t misinterpret the costs and savings that may be achieved by going virtual at the desktop.

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