TCO and ROI Analysis of SAP Landscapes using VMware Technology

Transcription

1 TCO and ROI Analysis of SAP Landscapes using VMware Technology

2 TCO and ROI Analysis of SAP Landscapes using VMware Technology Version 1, September 2009

3 Contents 1 Executive Summary Introduction Overview of the TCO/ROI Methodology The Four TCO Categories Downtime Operation Administration Hardware and Software Direct and Indirect Costs TCO Calculation and Improvements for Virtualized SAP Systems TCO Calculation for SAP Data Center Server Hardware Requirements and Sizing for New and Reused Hardware Methodology for Calculation of Hardware Requirements Productivity Improvement with New Hardware SAP Data Center Storage TCO Calculation for Data Center Server Storage Calculation of Storage Requirements Storage Productivity Improvement SAP Data Center Networking TCO Calculation for Data Center Networking Methodology for the Calculation of Network Requirements Productivity Improvement due to Network Virtualization Data Center Server Space Data Center Power and Cooling TCO Calculation for Data Center Power and Cooling Calculation of Power and Cooling Requirements Productivity Improvement SAP Data Center Provisioning TCO Calculation for Server and Software Provisioning Methodology for the Calculation of Provisioning Savings SAP Deployment Provisioning Improvement SAP Data Center Server Administrative Costs TCO Calculation for SAP Administrative Costs Methodology for the Calculation of SAP Administrative Costs Improvement Reduced Business Risk TCO Calculation for Business Risk Methodology for the Calculation of Business Risk Improvements SAP Clustering TCO Calculation for SAP Clustering Methodology for the Calculation of SAP High Availability Improvement... 21

4 4.10 SAP and VMware Server Load Balancing TCO Calculation for Load Balancing Improvement SAP Installation and Upgrades SAP Installation SAP Downtime Minimized Upgrade Method SAP Resource Minimized Upgrade Method Building Up an SAP Landscape SAP Software and Hardware Maintenance SAP Support Packages SAP Kernel Patches Industry-Standard (x86) Hardware Maintenance Non-Industry Standard Hardware and Software Contracts SAP Enhancement Packages TCO Calculation for SAP Maintenance Improvement SAP Planned Downtime Methodology for the Calculation of SAP Planned Downtime TCO Calculation for SAP Planned Downtime Improvement VMware Infrastructure investment VMware Infrastructure Licensing VMware Infrastructure Training VMware Virtualized SAP Environment Design and Planning Heterogeneous or Homogenous SAP Migration Costs Investment for SAP Physical to Virtual Migration System Copy Categories SAP Heterogeneous System Copy SAP Homogenous System Copy Physical to Virtual Migration VMware Converter Customer P2V SAP Migration Costs Use Case Scenarios Before and After Virtualization SAP Solution Architecture Customer SAP Solution-Based Landscapes SAP Landscapes Before Virtualization SAP Landscapes After Virtualization Annual Hardware and Software Cost Savings Annual A/C and Power Savings Annual Cooling Costs for SAP Servers Deploying an SAP Solution with VMware Templates Cost of Deploying a Solution Before Virtualization Cost of Deploying a Solution After Virtualization High Availability and Clustering SAP Database SAP Message and Enqueue Service... 42

5 7.4.3 HA and Clustering Before Virtualization HA and Clustering After Virtualization Summary of SAP clustering and VMware high availability SAP Front End Client Systems Client Systems Before Virtualization Capital Investment in VMware VDI Client Systems After Virtualization SAP Upgrades and Patches Upgrades and Patches Before Virtualization Upgrades and Patches After Virtualization TCO Reduction: Three Case Studies TCO and ROI Summary for Customer TCO and ROI Summary for Customer TCO and ROI Summary for Customer 3 without VMware VDI TCO and ROI Summary for Customer 3 with VMware VDI Customer 1 TCO /ROI Summary with Planned Downtime Costs Customer 2 TCO /ROI Summary with Planned Downtime Costs Customer 3 TCO /ROI Summary with Planned Downtime Costs Customer 3 TCO /ROI Summary with Planned Downtime Costs and VMware VDI Virtualizing Large Enterprise Applications with VMware vsphere... 67

6 1 Executive Summary This study examines how VMware software reduces total cost of ownership (TCO) for SAP landscapes. It focuses on three German reference customers, representing three different industry sectors with different numbers of concurrent SAP users. SAP Customer Descriptions Customer Industry sector Implementation Scenario Concurrent SAP Users 1 Automotive Heterogeneous SAP migration from a 400 mainframe to x86 2 Pharmaceutical Heterogeneous SAP migration from a 200 UNIX Cluster/Oracle to x86 hardware 3 Government Homogeneous SAP migration from X86 physical servers into virtual with VMware Converter 100 Source: VMware partner AddOn These customers have virtualized their entire SAP infrastructure together with the associated databases. Some of the data was collected during the project phase using in-house questionnaires. All three customers run productive SAP systems on VMware Infrastructure 3. The projects have been finalized to the customers complete satisfaction. The detailed results for a three-year calculation before and after the SAP landscape virtualization have been combined and can be found in the appropriate chapters following. The following tables summarize the TCO and return on investment (ROI) calculations for the three companies based on their successful migration from physical SAP environments to VMware infrastructure. All pre-defined customer objectives have been fully achieved. The cost savings for SAP planned downtime is based on an estimate of $120,000 US per hour, which can vary in different use cases. The contribution to the TCO in this study is weighted at 30 percent. The planned downtime reduction is achieved with the use of VMware VMotion and the simplification of building clusters. Please note that all monetary amounts in this document are expressed in $US. TCO Savings with VMware Virtualization Customer Total costs Total costs with Savings TCO in % without VMware Infrastructure* VMware Infrastructure Customer 1** $1,991,280 $372,321 $1,618, Customer 2 $ 772,131 $131,628 $ 640, Customer 3*** $ 252,765 $128,546 $ 124, Customer 3**** $ 399,165 $240,646 $ 158, * Reference prices based on customer information and quotes for pre-virtualization environment ** Value for simplified SAP Upgrade is included ***Value for VMware VDI is not included ****Value for VMware VDI is included 1

7 TCO savings with VMware Virtualization Including Costs of Planned Downtime * Customer Total costs Total costs with Savings TCO in % without VMware** VMware Customer 1*** $ 5,447,283 $2,100,321 $3,346, Customer 2 $ 4,228,131 $1,859,628 $2,368, Customer 3**** $10,188,765 $5,312,546 $4,876, Customer 3***** $10,335,165 $5,424,646 $4,910, *Achieved through VMotion and simpler cluster build **Reference prices based on customer information and quotes for pre-virtualization environment *** Includes value for simplified SAP Upgrade ****Value for VMware VDI is not included *****Value for VMware VDI is included Customers 1 and 2 used UNIX and mainframe hardware before moving to virtualizing on industry-standard x86 systems. Customer 3 used x86 systems before and after virtualization. For most medium-sized business customers this example fits best. Break even for all three customers was between one and six months. Customer Objectives for SAP Virtualization with VMware Customer Objectives Achieved Customer 1 Reduction of hardware costs Yes Reduction of hardware and software maintenance costs Customer 2 Reduction of hardware costs Yes Reduction of hardware maintenance costs Reduction of cluster costs Customer 3 Reduction of cluster software and maintenance Yes Reduction of external consultant know-how requirements Source: customers Replacing expensive mainframe and UNIX systems with x86 and VMware virtualization technology reduces costs significantly 1. Furthermore, customers achieve more flexibility and higher availability with all their SAP systems as well as simplified maintenance operations. This study looks at the first three years after virtualization. Once the SAP solutions have been virtualized and encapsulated in virtual machines, further projects such as a technology refresh (migration to faster hardware and storage) become much easier. Moreover, external consultant costs can also be reduced. 1 All customers had shared storage infrastructure in place prior to virtualization. As a result, the virtualization projects did not introduce additional costs in that area. 2

8 2 Introduction This document provides a detailed overview of how three organizations use VMware virtualization technology to reduce TCO and increase ROI for their SAP solutions. TCO is usually several times higher than merely the procurement costs. In addition to license costs for software, it is also necessary to consider hardware costs, maintenance fees, personnel costs for implementation and operation, and expenses for user training and licenses. The calculation of the total cost of ownership provides important information for planning and implementing projects and consolidating system landscapes, (defined as optimally combining components from different scenarios and integrating them on one physical server, as far as possible). Increasing cost pressures for companies make it necessary to merge systems, data, applications, and access to programs, and thereby achieve corresponding savings. There are various models for calculating TCO, including those devised by analyst firms Gartner Group and Alinean, each of which takes different costs into account. The common goal of all TCO models is to split the total costs into blocks to identify the cost drivers within the system landscape. In this study, together with three customers with different user requirements from different industry sectors, we have analyzed TCO and ROI using the VMware/Alinean model. For SAP landscapes several adjustments were necessary. In addition, SAP aspects like clustering, deployment and patch scenarios enhance this model. Several other TCO/ROI methodologies for VMware are available, but no single one covers the specific requirements and approaches for mission-critical Enterprise Resource Planning (ERP) applications such as SAP. Nearly all enterprise core business processes can be represented by this software. SAP software is complex, with many dependencies related to customer needs. High availability, flexibility, scalability and reliability are key requirements for its users. Before SAP solutions can be used, many customizations are required. SAP is a multi-user environment, where 500 or more users can work simultaneously in the same system. Different operating systems and database platforms are supported by SAP, including UNIX, Windows, and Linux. (In conjunction with VMware, however, only Windows and Linux operating systems are supported.) These conditions make it necessary to adhere carefully to specific requirements when installing, supporting, maintaining and upgrading an SAP landscape. To understand the benefits of running SAP solutions on VMware virtualization technology and the resulting calculation and measurement methods for the TCO/ROI study, this paper explains technical issues, procedures and best practices for running SAP solutions successfully in a virtualized environment. Following these procedures will result in customer cost savings. To summarize: This document describes a number of different areas where customers can save time and reduce costs by running SAP solutions on VMware virtualization platforms. Another topic is the performance improvement observed after virtualization. For example, background jobs run 40 percent faster than they did on the older hardware. 3

9 This TCO/ROI study was validated together with our partner AddOn, which hosts the SAP Virtualization Competence Center in Europe. The study analyzes three different projects planned and implemented by this partner. The intention of this paper is to help organizations quantify the current before VMware cost of ownership for SAP solutions-based landscapes. The study shows the after VMware scenario, quantifying the cost savings and the initial investments to set up and deploy the virtualized SAP data center. The methodology uses proven financial techniques, industry research, VMware field and customer data and user-provided metrics to quantify the values. The TCO/ROI analysis formula subtracts the after VMware scenario from the before VMware scenario to document the change in TCO and other benefits from the VMware solution over a three-year period. The ROI analysis formula compares the savings with the incremental investments as a percentage to illustrate the ratio of returns versus investment (ROI = Total Cumulative Savings / Total Cumulative Investments). 4

10 3 Overview of the TCO/ROI Methodology SAP recommends securing the productive SAP ERP system (PRD) with one or two additional systems in front called Development (DEV) and Quality Assurance (QAS). Furthermore, all other SAP solutions such as SAP Enterprise Portals, SAP Exchange Infrastructure Systems and SAP Business Warehouse (Business Intelligence) should be handled in the same way. The collection of three independent systems for each SAP solution is called an SAP landscape. The customers in this study, regardless of the number of users working concurrently, have followed this recommendation. As a result, these customers have to manage several servers with different requirements and high availability criteria. For all three reference customers in this study, physical DEV and QAS systems were underutilized in terms of CPU and memory consumption. One way to reduce the total costs of servers is to improve asset utilization through workload consolidation. Over a 24-hour period, we have seen utilization of DEV and QAS systems at less than 20 percent of x86 and other hosts (UNIX, mainframe) computing capacity. One of the reference customers has a worldwide presence and, as a result, some of its systems have no idle periods. Nevertheless, the customer is not an exception to the rule: most of its physical systems are under-utilized. Using these utilization values we can consolidate SAP DEV and QAS systems with a ratio of 4 or 5 to 1. This means that five SAP systems can be hosted on one well-sized VMware ESX host server. The number of virtual machines that can be hosted on one ESX host server is always dependent on the underlying physical hardware. The SAP PRD system is in all three customer cases a mission-critical enterprise solution. SAP defines some prerequisites for such systems: The SAP release must be supported, together with the VMware software The resources of SAP virtual machines should not be over-committed. In this study, all calculation parameters for hardware and software vendors are anonymous. This allows a better comparison among the three analyzed project implementations, focusing on the VMware benefits and features for SAP Landscapes. 3.1 The Four TCO Categories For our SAP / VMware study, we have chosen the Alinean/Gartner model with adapted contribution values for SAP implementations. This best reflects the Cost of Operation of an SAP solution. Costs are divided into four major categories. The following table shows the four cost categories and their contribution to the TCO. 5

11 Cost Category Contribution to TCO SAP Application Activities Downtime 30% Planned and unplanned downtime Users affected Operation 40% SAP maintenance Support Deployment Maintenance Process and planning Upgrades Energy consumption Administration 10% Asset management Firmware upgrades Procurement Training (IS, end-user) Hardware, software 20% Hardware, software Additional management software Supplies Cost categories and their contribution to TCO Source: Kagermann, Henning Prof. SAP Press book SAP-Solutions Downtime Controlling and reducing the downtime of a dedicated SAP system is a critical success factor in an enterprise. External consultants work in DEV systems, while most of the SAP application users work in the productive SAP system. In the event of massive failure or disaster, hundreds of SAP users are unable to read and write business data from the ERP system. One of our reference customers operates in the automotive sector. He told us that in the event of an unavailable SAP system, supply trucks would not be able to deliver or charge parts. The whole logistics department would come to a standstill. There are many examples of the business need for high application availability; without it, the business loses money. Downtime can be due to a user waiting for a service desk problem to be resolved, to planned maintenance, or to unplanned failures (e.g. network outage, database outage, application outage, etc.) Operation Day-to-day operation of an SAP system requires a great deal of attention. The architecture of an SAP system consists of: Operating system Database SAP software release Additional SAP servers for the dialog instance Each component must be integrated and monitored separately with system management software. SAP has an integrated Computer Center Management System (CCMS), but it only allows control and monitoring of an individual SAP system itself. Commonly, complex business processes are spanned over other application solutions as well. There is a need for additional system management software to take precedence and control over all business system members. 6

12 Operational elements comprise the technical staff resources including in-house staff, contractors, and outsourced management and support contracts. Included in this accounting are costs by operation subcategory (Technical Services, Planning and Process Management, Database Management and Administration, and Service Desk) and, for actual data collection, expense responsibility (Corporate IS, Business Unit IS). To help in evaluating this cost we have obtained global values from IS management and have evaluated management time surveys Administration Sometimes SAP administration interferes with SAP operation. However, we focused on asset management, firmware and hardware upgrades, procurement and training (for both IT staff and end-users) Hardware and Software SAP places very restricted requirements on hardware for different SAP solutions. For a productive use of SAP systems on virtualized hardware, SAP supports the virtualization solutions VMware ESX version 3.x. SAP exclusively supports 64-bit Windows as the operating system for virtual machines on AMD and Intel processors. On these operating system versions, all SAP applications (based on SAP NetWeaver Application Server ABAP and Java) that are supported on physical hardware are also supported on virtualized hardware. 3.2 Direct and Indirect Costs Besides the classification into categories, we have split the calculation of costs into direct (budgeted) costs indirect (unbudgeted) costs Direct (budgeted) costs are the capital, fees, and labor costs spent by the corporate IT department and business unit IS groups for delivering information technology services and solutions to the organization and users. Direct costs capture actual costs for all direct expenses related to clients (mobile and desktop), servers, peripherals, and the network in the distributed computing environment. Indirect (unbudgeted) costs measure the efficiency of IT in delivering expected services to end-users. If IT management and solutions are efficient, users are less likely to be burdened with self- and peer support as well as downtime. If IT management and solutions are inefficient, users typically must spend more time supporting themselves and each other (self- and peer support) and are affected by more downtime. Indirect costs by definition cannot be measured directly and there is not always a direct causal relationship. But efficient IT spending can have a direct positive impact on end-user productivity. On the other hand, inefficient spending or cuts can cost an organization more because of lost productivity. A very good example of indirect costs is energy costs. All three reference customers handle power for the SAP server as global costs. 7

13 4 TCO Calculation and Improvements for Virtualized SAP Systems 4.1 TCO Calculation for SAP Data Center Server Hardware SAP data center server workloads can be consolidated with virtualization. Customers generally achieve a consolidation ratio for SAP development, quality assurance, training, and demo systems of between 4:1 and 5:1, depending on hardware. In mission-critical SAP environments, customers typically use a dedicated VMware ESX instance for the SAP production system, because SAP strongly advises against overcommitment of system resources for production environments. Prices used in this study are based on systems with two-core and four-core sockets from Intel and AMD. After consolidation, unneeded system hardware can be reused or reallocated to other applications and future server purchases can be delayed or avoided. The following table shows x86 hardware prices only: Annual Costs of Certified Servers for SAP Systems* CPU Capacity (Socket) Annual Server Cost 1 CPU $ 5,000 2 CPU $ 7,500 4 CPU $17,300 8 CPU $33, CPU $45, CPU $77,000 *Source: Internal customer information. Prices include chassis, CPUs, 32 GB RAM, and two local disks. Network and SAN are tallied separately. Within this document, when we refer to reuse of an application server we mean reuse as a VMware ESX host, because most of the reusable SAP servers are certified for VMware ESX as well. This is an important factor in the TCO/ROI calculation and lowers the cost for purchasing ESX host systems. All three reference customers described here have purchased new multi-core server equipment for VMware ESX version 3.5. To calculate servers for both the As Is and Projected environments, the consolidation savings are considered over the entire analysis period. We have examined the amortized server capital cost and the annual support and maintenance contract costs for the current installed base, as well as costs for the consolidated environment. For the TCO data center hardware calculation we have used the formula: Annual SAP hardware and software savings = Total servers * (cost per server) As Is Total servers with VMware ESX * (cost per server/useful life) Projected Useful life in SAP hardware cycles = 3 years. 8

14 4.1.1 Requirements and Sizing for New and Reused Hardware Reducing the number of physical servers definitely has a positive impact on the TCO calculation, but the virtualized SAP infrastructure must meet at least the same or, preferably, achieve even better performance values, availability, scalability, and reliability as the physical environment. To meet these demands, all three customers in this study have gone through an SAP virtualization assessment. This service is offered and delivered by VMware and AddOn Systemhaus, a VMware partner located in Walldorf, Germany. VMware and AddOn jointly host the SAP Virtualization Competence Center ( The assessment evaluated performance values of the existing physical SAP servers over a specific time period (in this case, between four and six weeks) to obtain information about the sizing of the VMware ESX hardware and the number of VMware ESX instances necessary to virtualize the existing SAP servers. Typical daily business workload and sporadic peaks occur in this measurement window Methodology for Calculation of Hardware Requirements VMware Capacity Planner is a tool used in the SAP Virtual Assessment. The tool discovers and catalogues relevant server information, and measures performance values over a defined time period. The measured data is stored locally or can be transferred to a VMware store called Hardware discovery occurs after the tool is installed and properly configured. The following figure shows an example of a Capacity Planner report on discovered systems and includes information about the server chassis. Figure 1 following shows an extract of an SAP server performance assessment: 9

15 Figure 1: Extract of Workload Characteristics of Customer SAP Systems After evaluating the data over a period of time, the number of VMware ESX instances is calculated. SAP Assessments help to calculate the number and sizing of the VMware ESX host servers needed to provide robust and well-scaled SAP systems in a virtualized environment Productivity Improvement with New Hardware All three customers have reported performance improvements with their virtualized SAP systems. According to the SAP basis team of one reference customer, after successful migration of the productive SAP system with approx. 400 concurrent SAP users, they have seen a dramatic improvement in SAP system performance. Hardware Av. Response Time DB Request Time in DB Direct Read Av. CPU-Time in SAP SAP in SAP As Is 900 ms 500 ms 9.5 ms 177 ms Projected (in a VM) 568 ms 326 ms 5.2 ms 10 ms The most surprising effect is the runtime of a Material Requirements Planning (MRP) background job. Physical hardware calculates the job in 10,000 seconds; with the virtualized infrastructure it takes only 6,000 seconds. Another customer has assigned more memory to the SAP system in the virtual machine, because legacy hardware did not have enough physical memory to increase the total amount. This has a positive impact on performance because of the settings of database and SAP buffers, e.g. the SAP Parameter abap/buffersize for the Advanced Business Application Programming (ABAP) programming buffer. 10

16 4.2 SAP Data Center Storage There are several ways to connect VMware ESX hosts to shared storage. Shared storage is a prerequisite for using the VMware High Availability (HA) feature. The following access technologies can be used with VMware and SAP solutions. Source: VMware All of the reference customers use Fibre Channel technology, because iscsi and NAS currently have 10 Gbit/sec network hardware limitations (driver availability) and prerequisites (10 Gbit/sec switches). Nevertheless, using iscsi or NAS can dramatically reduce costs for the network infrastructure. With NAS and iscsi, no Fibre Channel assets are necessary TCO Calculation for Data Center Server Storage One of the key cost factors in implementing a SAN architecture is the need for every server to be connected to a shared storage. This connection requires an investment in purchasing, deploying, and managing host bus adapters (HBA) to connect the servers to SAN fabrics. Each virtualized SAP system reduces the cost of implementing a SAN by reducing the number of SAN switches and HBAs needed. All of the customers in this study already have a Fibre Channel SAN; therefore an investment in new storage technology was not necessary. The following algorithms were used to calculate the storage TCO in this study: Savings on HBA = ((Number of HBAs) * Price per HBA)/Life per Server) As Is (same) Projected Savings SAN switches = ((Number of SAN Switches) * (Price per HBA) / (Life per Server) As Is (same)) Projected Each server is calculated with 2 HBA for trespassing reasons. SAN switches are calculated with 24 ports. 11

17 4.2.2 Calculation of Storage Requirements We used the inventory function of the Capacity Planner tool to analyze how many servers As Is had HBAs built in, since these HBAs were consequently attached to the SAN fabric as well. As a result, we got a percentage As Is of servers attached to the SAN. In the projected environment we assume 100 percent of servers are attached to shared SAN. Attached to shared storage, these new servers become highly available because they can leverage the VMware HA feature. As part of the VMware Virtualization Check, we obtained the I/O requirements for traffic between the SAN and the physical SAP machines. They are shown in Figure 1, in the Disk columns showing utilization in Transactions per second and MB per second. In addition, we checked and proved the results in the SAP systems with the help of SAP mechanisms (e.g. SAP Transaction ST04). Typically, a Fibre Channel Disk in a SAN environment is able to deliver 180 I/O per second. Taking the storage RAID level into consideration, the number of disks needed in a SAN can be calculated Storage Productivity Improvement In the beginning of SAP migration project discussions, customers were very skeptical about gaining SAN improvements from SAP virtualization. From a performance point of view they were right; there is no big difference between accessing data from a raw device (i.e. without using the VMware vstorage Virtual Machine File System) physically or virtually. Once we explained VMware Storage VMotion, however, customers saw the advantages immediately. This feature allows the movement of complete SAP system data (virtual OS, SAP and database files included) to other storage areas while the SAP system is up and running, and what is particularly exciting even to other SAN boxes, regardless of vendor and access type (iscsi, NAS or Fibre Channel). Just imagine how difficult it is to migrate data from one SAN storage provider to another. The cost benefit of this capability is hard to calculate in a study such as this one, but many external consultant days can certainly be saved. Another benefit for one of the reference customers was the ability to simplify his SAP offline backup strategy. Other features like data reduplication have not been analyzed. Specific storage tools from different vendors are being used by the customers, but this is outside the scope of this study. 4.3 SAP Data Center Networking An efficient SAP system has to communicate over the network, with adequate response times, with hundreds of SAP front end applications. SAP systems are typical client-server systems: a query is sent from the client; the result set is calculated and sent back by the server. To satisfy availability and Service Level Agreement (SLA) policies, typical physical SAP servers have redundant network team-enabled cards built in. 12

18 4.3.1 TCO Calculation for Data Center Networking The number of physical network components, and thus the necessity of implementing different team-enabled drivers for different operating systems, is reduced with VMware virtualization technology. With fewer physical servers attached to the network, fewer switches, ports, NICs, and cables are required to provide server connectivity for the corporate network. One customer said: After virtualization, we completely filled one office room with useless network cables. For this study we used the following equation to calculate savings on networking components: Annual network savings = round UP (Number of servers * Number of NICs per server * Number of ports per NIC) / Number of ports per network switch) As Is (Same) Projected Methodology for the Calculation of Network Requirements The total number of network cards is delivered by the discovery function of Capacity Planner in the Inventory section. We were able to see how many network cards in the SAP systems were built in, and with the aid of Capacity Planner, we could see the network traffic in MB/second Productivity Improvement due to Network Virtualization There are many NIC vendors in the market, each with different firmware, ports, and device drivers. With virtualization there is no need to pay particular attention to these details, because the network mechanism is part of the VMware tools. Apart from cost reduction and administrative simplification, one of the biggest benefits of virtualization for SAP projects is the ability to change the virtual network card connection to other defined virtual switches on the fly. Customers can clone complete SAP virtual machines for fallback, backup reasons, for the creation of a test system, or for freezing errors for reproduction during an upgrade. Due to identical hostnames and IP-addresses, the cloned virtual machine is redirected to an internal switch with no physical connection to the enterprise LAN. This switch reduces the risk of generating problems and errors in enterprise networks. It also saves time and costs for consultant services, since changing hostnames in SAP environments requires adjustments in operating system environment variables, share or mount points, SAP profiles, and SAP tables. An SAP system with ABAP and JAVA stacks is even more complex. 4.4 Data Center Server Space A reduction in the number of physical servers and SAN and network switches means reclaiming valuable data center space. Expansion of future data center facilities and power requirements can be avoided. Typically, special infrastructure (cooling racks and power systems, disaster resilience) is required for larger SAP systems due to redundant power supplies, multiple CPUs, and memory requirements. As a result of discussions with the customers who took part in this study we concluded that, for this TCO analysis and all three reference customers, the countable monetary value of saving a few square meters is low. As a result we have decided to exclude server, storage, and network space calculations from this study. One customer did avoid having to perform a cooling 13

19 efficiency upgrade of his air conditioning thanks to virtualization, but this is discussed in the next section. 4.5 Data Center Power and Cooling SAP systems are typically installed and integrated in the common customer data center. The largest SAP customer has implemented a redundant failover data center and replicates the storage data asynchronously to the failover site with SAN storage tools. Power consumption in a data center can be divided into three categories: Operating power for the computing infrastructure, including server hardware, network switches, SAN components Network critical physical infrastructure (NCPI), such as transformers, uninterruptible power supplies (UPS), power wiring, fans, lighting Cooling power for air conditioners, pumps, humidifiers TCO Calculation for Data Center Power and Cooling Virtualization allows the number of physical servers to be reduced, along with related networking and data center infrastructure. As a result, power consumption for operation and cooling decreases. Power saving is calculated by the differences in operating system power consumption and cooling power of hardware before ( As Is ) and after virtualization (Projected), as follows: Annual Server Cooling Power per Server = Operating Power per Server * Cooling Load Factor * Airflow Redundancy / Airflow De-rating To be fair, we have to acknowledge that, because of higher CPU utilization caused by higher consolidation ratios, a VMware ESX host system requires more cooling and energy than a physical server that is used less optimally. In addition to power consumption, servers produce heat and require substantial cooling to keep running. Furthermore, the analyzed data centers have shown so-called hot spots, in which heat density is greater than in other areas. Data centers require additional airflow to account for inefficiencies related to humidification. Humidification is required to reduce damage resulting from a static discharge. We used British Thermal Units (BTUs) for the calculation of the cooling device costs. One BTU is the amount of heat energy needed to raise the temperature of one pound of water by one degree F. This is the standard measurement for the amount of energy in fuel as well as the amount of output of any heat generating device million BTU = 1000 KW/h

20 100 servers retired is equivalent to taking 122 cars off the streets per year. A typical car over an annual operating period produces nearly 12,000 pounds of CO2 emission or 600 gallons of fuel) 3 The electricity average price per hour in Germany in 2008 = USD $0.28 per 1 KW/h. The data center operating hours of the participating customers = 8736 (24/7/52) hours Calculation of Power and Cooling Requirements The operating power consumed by server hardware has been calculated by adding up the power ratings of each server in the data center. Because this number represents the maximum power used, it should be de-rated to achieve steady-state power consumption. In SAP environments we have seen an average running load factor of 50 percent and higher. This indicates that X86 servers consume between percent of maximum rated power on average. For the TCO calculation we used BTUs available for the cooling environment and the average energy price per KWh in Germany in 2008 (see section 4.5.1). Together with the customers, we analyzed the operating manuals of the server and cooling units, in order to work out how many KW/h are used before and after virtualization. The following table shows the power consumption of an X86 server: Server with Power Watt/h Power / Day in kwatt Power / Year in kwatt Cost / $0.28 kw/h 1 CPU $ 1,165 2 CPUs $ 1,349 4 CPUs $ 2,820 8 CPUs $ 3, CPUs $10, CPUs $22,565 Source: Power Consumption: Alinean 2007 and average electrical power price in Germany in Productivity Improvement The best improvement we saw was in a customer data center that was filled with physical hardware where the cooling system was operating at its limit. Decreasing the amount of physical hardware with virtualization saved the customer from having replace its cooling environment. With regard to energy and power consumption, there are a number of social and economical aspects to be considered as well. Under the heading Green IT and carbon reduction, customers can use these savings as an instrument to show the company s contribution to the fight against global warming. For simplicity, we have not taken these criteria into consideration in our calculation model. 3 Shulz, Garry, Storage Power and Cooling Issues Heat Up, May 21, storageforum.com. 15

21 4.6 SAP Data Center Provisioning With virtualization, it is easier to acquire, set up and deploy SAP hardware and software to meet increasing demand. Typical customer SAP landscapes consist of development, quality assurance, and productive systems. One customer in this study enhanced the landscape with a training system and an SAP Solution Manager. The hardware setup consists of server unpack, network and power cabling, rack installation, and disk setup. The SAP software deployment includes the installation of the operating system, database and the SAP software. In a physical environment, a high availability cluster-enabled software must be installed as well TCO Calculation for Server and Software Provisioning Provisioning savings are measured as the working hours saved in not having to provision servers manually. The savings are calculated by multiplying the hours and the saved hourly wage of an SAP basis administrator. For the installation of an SAP system we have calculated two full-time administrator days (16 hours) = Person hours per Provisioning Event. Included in the installation are the pre- and post- installation steps of an SAP Solution. Annual data center SAP deployment provisioning savings = (Systems provisioned per year * Person hours per provisioning event * Average hourly labor rate for SAP basis staff) As Is (Same) Projected + Annual data center server provisioning savings = Server provisioning per year * Person hours per server * Person hours per provisioning event * Average hourly labor rate for SAP basis staff) As Is (Same) Projected * 0.5 (improved deployment time) Person hours per provisioning event = 3 hours Average hourly labor rate for basis staff = US$ Methodology for the Calculation of Provisioning Savings With the aid of the SAP Virtualization Check we discovered the count of physical SAP systems, size of the SAP landscape, and consequently the number of VMware ESX host servers required to meet the performance and HA requirements for the virtualization project. With the aid of the HR department and in collaboration with the stakeholders, we created an average hourly wage for the SAP basis administrator for each customer. Besides the normal server installation, the SAP software deployment is considered and added to the TCO SAP Deployment Provisioning Improvement VMware virtualization technology enables very fast deployment times to build up SAP landscapes. Depending on the systems involved, we can reduce the provisioning time for a three-system SAP landscape from six days to just under three days, for a 50 percent reduction in deployment time. 16

22 Initial SAP deployment savings = (Initial SAP Deployment) As Is (Same) Projected * 0.5 (improved deployment time with VMware template technique) 4.7 SAP Data Center Server Administrative Costs Reducing the number of physical assets helps to lower administrative costs. Physical server administration includes changing the amount of physical memory and adding more CPUs (sockets) to asset inventory, and managing security, disaster and recovery planning, as well as compliance management, vendor and contract management, chargeback and financial budget management. In terms of software, fewer monitoring tools are necessary, which also reduces administrative costs. The following table lists additional physical resource requirements for newer SAP releases. Resource requirements for newer SAP releases SAP Release Additional CPU Usage Additional Memory Usage Additional Disk Space SAP R/3 Enterprise (4.7) Baseline Baseline Baseline SAP ECC 5.0* 10% 10% 5% SAP ECC 6.0** 15% 20% 10% Source: *SAP Note **SAP Note The reason for higher CPU and memory usage is that newer SAP releases need additional indexes, use larger table rows, support more database users or show different behavior of the cost-based optimizer of the databases. Like every other software vendor, SAP follows a specific support and maintenance strategy. Some customers have to upgrade to a newer SAP release due to the extended maintenance costs. 17

23 Figure 2: SAP Maintenance Strategy TCO Calculation for SAP Administrative Costs Reducing the number of physical servers can reduce server administration labor costs, allowing reallocation of resources to more strategic uses. Total server FTE (Full Time Equivalent) = Total physical servers / Physical servers per FTE Total server administration labor costs savings = Total server FTEs required * Average annual burdened salary of SAP basis administrators) As Is (same) Projected Methodology for the Calculation of SAP Administrative Costs We pooled the information for the salary and external consultant support from the SAP basis team. The salary information was obtained directly from the employees. This kind of information is very critical, and no HR department was willing to give detailed information about the average annual salary. However, to verify what we learned from the employees we compared the information with an IDC Alinean survey conducted in Improvement As the SAP enterprise solution evolves to address more complex business problems, new versions of SAP software and current capabilities are introduced. VMware virtualization can provide capacity on demand for SAP functionality with minimal service interruption. 18

24 After the virtualization of physical SAP systems was completed, incentive pay for overtime of the SAP Basis Team was reduced by 20%. Subsequently, fewer people have been necessary to administrate the SAP Landscapes. External consulting services have been reduced. All three customers benefit by encapsulating their SAP systems into a virtual machine. Figure 2 shows how long SAP estimates the lifetime for an SAP NetWeaver Version (6.40, 7.00), with the aid of mainstream maintenance. Typical hardware amortization, due to lifetime and service contracts with the vendor, is between three to four years. As a result, SAP customers need to redeploy the SAP release to a new piece of hardware once during its lifecycle. Due to operating system and database dependencies, these are complex projects. All three reference customers need support from different vendors and consultants (e.g. storage vendor, SAP consultants) for these hardware refresh cycles. With virtualization, SAP systems can be cold migrated to any new VMware-certified system with no change to the core SAP application inside the virtual machine. 4.8 Reduced Business Risk In case of a disaster, virtualization reduces risk because if provides hardware independence and built-in mechanisms to reduce the downtime of SAP systems. Traditional disaster recovery solutions require redundant productive hardware. An active-passive cluster for the database is also a mandatory failover mechanism to prevent downtime. Server configuration and complex multi-step processes in bare-metal environments are difficult and time consuming TCO Calculation for Business Risk The following mathematical algorithm is used in this study. Data center server disaster recovery savings = (Amount of disasters per year * Recovery time * Downtime cost per hour) As Is (Amount of disasters per year * Recovery time * 25 percent (Reduced recovery time with VMware) * Downtime cost per hour) Projected The 25 percent reduction of recovery time is achieved with VMware Consolidated Backup in combination with third-party backup and recovery solutions Methodology for the Calculation of Business Risk In our projects we have tried to investigate the downtime costs per hour. These costs include the labor for IT and the indirect impact of lost user productivity. Unfortunately, opinions and calculations varied greatly within the companies; therefore we deferred to a study from IDC Alinean published in IDC Alinean costs for downtime for typical applications are shown in the next table. 19

25 Cost per Application Downtime/Hour Application Type Cost per Downtime Hour by Application Collaboration and Messaging $ 60,000 ERP * $120,000 Infrastructure/Productivity Tools $ 42,000 Line of Business Applications $120,000 Retail / Point of Sale $400,000 Scientific / Technical $ 85,000 Supply Chain Management $120,000 Trading $600,000 * SAP solutions are ERP applications Source: IDC/Alinean Alternative formula: Downtime cost per hour = (Productivity impact to SAP end-user in %)* End-user burdened salary + costs for, say, production stop, delivery bottlenecks, contract penalty, loss of reputation Improvements VMware virtualization works alongside SAP solutions to deliver enhanced infrastructure and high availability of applications for critical business functions. Using VMware infrastructure, customers can implement a unified disaster recovery (DR) platform that allows many production SAP virtual machine servers to be recovered in the event of a failure, without investing in an exact replica of the production hardware. VMware infrastructure capabilities such as VMware VMotion, VMware High Availability (HA) and VMware Consolidated Backup (VCB) deliver enhanced levels of availability to virtualized SAP environments. 4.9 SAP Clustering Two of the reference customers require an uptime of 24 hours 7 days a week, because they have worldwide subsidiaries across global time zones with different working hours. Virtualization helps to reduce both planned and unplanned downtime. In a physical environment, SAP offers SAP cluster solutions in conjunction with database and storage vendors, which must be additionally implemented. This situation is described in one of the case studies below TCO Calculation for SAP Clustering Clustering implementation costs are higher than hardware and software costs. We have used the following formula: Annual SAP high availability savings = ((Hourly labor rate for IT system administrator staff) * (Person hours to implement and test an SAP cluster) * Size of SAP solution + (Costs for additional cluster software) + (Volume of additional server costs)) As Is (Same) Projected. 20

26 The SAP customers told us that to implement an initial physical SAP Cluster you need approximately five work days. An additional eight hours in maintenance time is necessary for SAP support stack scenarios in comparison to a NON-cluster environment Methodology for the Calculation of SAP High Availability We worked with the customers to analyze the need for SAP high availability. Traditionally, each SAP productive system is a candidate for SAP high availability, as described earlier. With VMware virtualization, all SAP solutions including those in DEV and QAS can benefit from the VMware HA feature, at no additional cost. Together with the customers, we analyzed the average baseline prices for the following products: Microsoft Cluster HP/Digital TruCluster HP ServiceGuard IBM HACMP On average, the price for a two-node cluster in Unix environments is approximately $20,000 per year. A Microsoft Cluster is calculated at approximately $2000 per year. The customers told us that the implementation of an initial SAP Cluster requires approximately five additional work days. An additional eight hours is necessary in SAP support stack scenarios in comparison to a NON-cluster environment Improvement VMware HA provides cost-effective high availability for SAP applications running in virtual machines. In case of a physical server failure, SAP virtual machines can be automatically restarted on other servers within the pool that have spare capacity. VMware HA minimizes downtime and IT service disruption, while eliminating the need for dedicated stand-by hardware. It provides high availability across the entire virtualized IT environment, without the cost and complexity of failover solutions tied to either operating systems or specific applications. The VMware HA feature is part of the enterprise license and can be activated in five minutes for each kind of SAP solution. The customers in this study report that single point of failure components like message server, enqueue service and database components run reliably and need no additional attention from cluster service monitor components. To monitor these SAP components, SAP CCMS features are used. VMware heart beat alarm settings prevent unresponsive SAP operating systems SAP and VMware Server Load Balancing SAP provides distributed transaction processing, automated load balancing, and replicated service framework offering high levels of scalability and resource optimization for the application environment. SAP environments also have a built-in logon group load-balancing mechanism. This mechanism can be combined with the VMware Distributed Resource Scheduler feature to assist with optimizing the infrastructure resources used by SAP and non- SAP applications. 21

27 TCO Calculation for Load Balancing There are no real formulas to calculate a TCO value for load balancing. The load balancing mechanism in VMware can guarantee the performance values and thresholds defined in service level agreements Improvement VMware infrastructure solutions support load balancing capabilities by addressing resource management across the entire data center infrastructure and across multiple distributed SAP application servers. VMware Distributed Resource Scheduler (DRS) dynamically allocates and balances computing capacity across a collection of hardware resources aggregated into logical resource pools. VMware DRS continuously monitors utilization across resource pools and intelligently allocates available resources among the virtual machines based on pre-defined rules that reflect business needs and changing priorities. When an SAP virtual machine experiences an increased load, VMware DRS automatically allocates additional resources by redistributing virtual machines across the physical servers. VMware DRS optimizes IT environments to align resources with business goals, while ensuring flexibility and efficient utilization of hardware resources SAP Installation and Upgrades SAP solutions can run in physical environments on different operating systems and database platforms. Only Windows and Linux (Red Hat, SUSE) operating systems are supported in a VMware virtual infrastructure. There are some pre-configuration steps on the operating system level that are required before an SAP installation takes place SAP Installation The installation steps in a virtualized environment are the same as in the physical world and can be performed in two days. With a virtualized environment, however, we have seen three benefits in SAP installation scenarios. SAP software DVD media management can be simplified Installation steps can be captured and recovered with the help of the VMware snapshot manager in VMware vcenter Once an SAP system is installed, templates and clones can be made easily In all three customer projects, the required SAP media DVDs were copied to a VMFS Disk and attached as a temporary installation drive. After installation, this drive can be reassigned to other virtual machines. An SAP installation typically consists of four phases: Installation of the operating system Installation of the database Installation of the SAP executable Initial import and load of the database with tables, fields, and data After each successful installation phase, a VMware snapshot was made to allow roll back to a know clean state in case of a serious error. 22

28 SAP upgrades consist of two phases: Prepare SAPup In the SAPup phase there are two methods for importing the new release objects into the database. These methods are: Downtime-minimized Resource-minimized The following is a brief explanation of both SAP upgrade methods SAP Downtime Minimized Upgrade Method Due to the size and volume of SAP packages (SAP support packages, SAP add-on installation packages, and SAP add-on upgrades), import of the packages has a large impact on the duration of system downtime, when no end-user is able to work. To reduce the downtime when importing SAP support packages, the downtime-minimized import mode assists with importing the majority of the objects during production operation of the system. In this mode, the objects are imported into the database in an inactive state, in which they are largely invisible to the system. The system can continue to be used productively. For this upgrade methodology, we strongly advise against the using VMware snapshots while end-users are working productively. Data can be lost in the case of a rollback to older snapshots SAP Resource Minimized Upgrade Method In resource-minimized environments, the system is down during SAP package import. The advantage of this method is that the database log files do not really increase, because no endusers produce additional data. This method is faster than downtime-minimized, but causes more downtime for the productive system. With this method, VMware snapshots can prevent long running backup jobs performed by different departments and people Building Up an SAP Landscape Once an SAP system is installed in a virtual environment, VMware templates and the clone mechanism can be used to create an SAP landscape of two to five systems. SAP recommends the establishment of a three system landscape with development, quality assurance, and productive systems SAP Software and Hardware Maintenance From time to time, SAP publishes changes and corrections to its solutions in support packages. These support packages are first applied to the development systems. After a successful test they are implemented in the downstream systems. Maintenance of the physical machines is also necessary, including such activities as doing a firmware upgrade of a network card, a Host Bus Adapter Controller, or the addition of more memory or CPU capacity. 23

29 SAP Support Packages An SAP system consists of different software layers, also called software components. All layers are regularly updated using support packages; that is, errors are corrected and new functions are provided. The SAP system should always be kept at the current correction status to prevent errors in the standard release. In addition to the standard functions in an SAP system, additional functions are sometimes required for a particular industry solution (IS). Each SAP support package has a stack number based on an SAP release number. If a customer has different SAP solutions and components, he has to deal with different SAP support package stacks. In the table below the stack number 15 was released in the first quarter for SAP ERP 6.0. The next, number 16, is scheduled for August Support packages and add-ons are installed in ABAP with an SAP transaction called SPAM and SAINT. For the Java stack a tool called JSPM (Java Support Package Manager) is used. SAP Support Package Schedule for 2009 and SAP Solutions 24

30 We recommend instantly rolling back SAP virtual machines using snapshots during patch problem resolution SAP Kernel Patches The executable SAP programs are written in C and called SAP kernel. Each SAP release and SAP solution has its own subset and version of these executables. The programs must be patched from time to time, due to database, operating system, and release dependencies. Replacing these SAP programs causes SAP system downtime. SAP kernel patching is a procedure in which the SAP programs are exchanged with current versions. Most of the up-to-date SAP release kernels are downward compatible. During the startup of the SAP system, these kernel programs are distributed to all attached SAP instances to make sure that every host or VM has the same patch version and functionality. VMware patches can be tested concurrently on multiple configurations (different versions of OS, SAP, Web, etc.) that are hosted on the same physical system Industry-Standard (x86) Hardware Maintenance New computer equipment is usually sold with a warranty. The guarantee period in Germany is two years, but some vendors offer longer warranties. If the computer fails during the warranty period, the vendor should resolve any hardware problems at no additional cost. In addition, a customer can obtain an extended support and maintenance contract. On average, we calculate using the following values for x86 hardware maintenance: Server Type Reaction Time (Hours/Days/Year) Price (USD) 2* Quad - Core 13/5/1 $450 4* Quad - Core 24/7/1 $840 Source: Customer contracts Non-Industry Standard Hardware and Software Contracts Two customers replaced their SAP systems running on non-x86 hosts with clustered environments with x86 technologies. The maintenance costs for the non-x86 hosts are significantly higher. Type Reaction Time (Hours/Days/Year) Price (USD) Hardware 24/7/1 $46,000 Software - $20,700 We recommend dynamically reassigning SAP virtual machines with VMware VMotion to other systems while performing maintenance or changes on the current physical system, thus causing minimal disruption to end-users SAP Enhancement Packages The enhancement package for the SAP ERP application provides new or improved software functionality that can be implemented in a modular fashion. There is no need for a major 25

31 upgrade. New features and technical improvements can be applied while the core software remains in place. The enhancement packages include collections, or bundles, of enterprise services. Each bundle provides new services as well as documentation on how the services can assist with extending and reconfiguring processes or groups of related processes. Each bundle includes explanations of relevant processes, groups of processes, and roles, along with descriptions of business objects and tips on how to implement the new services TCO Calculation for SAP Maintenance SAP maintenance is one of the major cost drivers for the reference customers. However, SAP patches, new SAP releases, are useful and necessary for reasons of new business functionality, security, and stability. The calculation here is based on database sizes of nearly 500 GB. SAP maintenance savings = ((SAP installation savings) As Is + (SAP upgrade savings) As is + (SAP patch savings)) As Is (Same) Projected * 0.75 improved by VMware SAP installation savings (initial three-system landscape) = (2 work days * three systems * Hourly labor rate for IT system administrator staff per consultant) As Is (3 days for three systems * Hourly labor rate for IT system administrator staff or consultant) SAP upgrade savings = ((5 work days * 1 DEV system + 3 days * 1 QAS system + 3 days * 1 PRD system) * Hourly labor rate for IT system administrator staff or consultant) As Is 0.8 *(same* Hourly labor rate for IT system administrator staff or consultant) Projected SAP patch savings (complete support package stack) = (2 days * Hourly labor rate for IT system administrator staff) As Is 0.75 * (2 days * Hourly labor rate for IT system administrator staff) Projected The SAP patch saving and the SAP upgrade factors of 0.75 and 0.8 are achieved by using VMware snapshot and clone technologies Improvement The new VMware clone and template technologies can save time and lower costs. Faster change management with fewer system resource requirements can be achieved using new test patches concurrently on multiple configurations (different versions of OS, SAP, Web etc.) that are hosted on the same physical system. With VMware snapshots, the backup times for milestones in SAP patch upgrade scenarios can be accelerated and resource utilization can be minimized SAP Planned Downtime Planned downtime expenses are the annual losses in productivity due to planned unavailability of the SAP system. SAP planned downtime can be categorized as: Hardware maintenance (adding more memory, adding more CPUs, firmware upgrades to the controller, and so on) 26

32 SAP software maintenance (adjusting SAP parameters such as memory, buffers, security settings, etc.) Applying new support pack stacks Offline backups Methodology for the Calculation of SAP Planned Downtime In the SAP virtualization projects, we evaluated these criteria together with the customer's endusers. We performed some end-user surveys and discussed the results with the IS management. For customers with 24/7 uptime, the reduction of planned downtime is equal to the downtime of the production system TCO Calculation for SAP Planned Downtime The SAP planned downtime depends on the company policies of the customer. The following values are taken from SAP customer surveys. A customer with 24/7 operation hours has the following prerequisites per year. Annual SAP planned downtime for maintenance* Planned Downtime for Hours Unavailable Unavailable Cost Maintenance per Year in % Hardware** $ 480,000 SAP Software per Central Instance*** $1,920,000 * At least two SAP patch stacks per year per eight hours each ** $120,000 for SAP ERP ***The contribution to TCO in the final calculation is 30 percent In this study the calculation of SAP planned downtime is the same as for SAP unplanned downtime Improvement With VMware VMotion technology, the planned downtime for hardware maintenance becomes zero. While the SAP system is up and running, a hot migration to another VMware ESX host machine can be performed. Internal service level agreements can be fulfilled more satisfactorily with VMotion. Offline backups can be completely replaced by VMware Consolidated Backup, with the aid of snapshot technology. VMware Consolidated Backup provides an easy-to-use, centralized facility for LAN-free backup of virtual machines. Consolidated Backup simplifies backup administration, reduces the load for VMware ESX host machines, and can reduce SAP downtime. 27

33 5 VMware Infrastructure investment To achieve expected TCO savings, there must be an investment in VMware virtualization solutions. Customers must take four areas into consideration: VMware infrastructure licensing VMware infrastructure training VMware infrastructure design and planning Heterogeneous or homogenous SAP migration costs 5.1 VMware Infrastructure Licensing Deploying a virtual infrastructure requires a onetime cost of purchasing VMware software licenses, as well as annual support und subscription costs. For an SAP solution as a missioncritical application, the VMware Infrastructure Enterprise Edition is required. The Enterprise edition includes ESX, VMFS, vcenter Management Server, Virtual SMP, VMotion, VMware HA, VMware DRS, and VMware Consolidated Backup. The model derives the cost of software by dividing by two the total number of processors (socket) after virtualization. One Enterprise Edition server license for every two CPUs is required after consolidation. Recurring fees vary, depending on the type of support and subscription program purchased. VMware provides Gold and Platinum level support contracts. Due to the need for 24 hours/7 days a week support for their SAP environments, two customers chose the Platinum Support model and pay 25 percent (21 percent) of the purchase price annually. We used the Enterprise Edition for the TCO calculation. VMware VI Edition Description Value Source VI Enterprise Edition License Cost Unit price VI $5,750 VMware Commercial Price List* VI Enterprise Edition Units to purchase Number of CPUs / 2 Calculated License Units VirtualCenter Management Server License Cost Unit price VC $5,000 VMware Commercial Price List Subscription Factor Percentage of unit price that yields annual fee *Source: TCO calculation: 21% (Gold) 25% (Platinum) VMware Commercial Price List Initial purchase = VI enterprise license cost * VI enterprise license units + VC management server license cost 5.2 VMware Infrastructure Training A training class is available for VMware virtualized SAP environments. This class can be found in the official SAP training catalog. For calculation purposes, the number of classes required is dependent on the number of administrators who require training. In addition, customers have 28

34 attended the AD310 course classes for a better understanding how a virtualized SAP environment can be management efficiently. Training Class Costs Class Title Course Cost* AD310: Install and Configure VMware for SAP Administration (5 days)* *Source: SAP Education Training Catalog $4,500 TCO calculation: Initial VMware infrastructure trainings costs = AD310 * SAP Administrators * course cost Initial costs for knowledge transfer Customer Number of Administrators Cost* Customer 1 3 $ 13,500 Customer 2 2 $ 9,000 Customer 3 1 $ 4,500 *Source: Customer 5.3 VMware Virtualized SAP Environment Design and Planning An SAP / VMware migration requires dedicated planning and design of the virtualized VMware servers and SAN requirements, along with the adjustment of the SAP systems. Such a virtualization check, offered by multiple VMware SI partners, is used as the basis for the TCO calculation. Cost of SAP Virtualization Check Offered by a VMware Partner Consulting Package Cost SAP Virtualization Check (dependent on size of SAP landscape) $7,000 TCO calculation: Initial virtualization check costs = Amount of SAP landscapes * Fee Initial cost for SAP Virtualization Checks Customer Number of Virtualization Checks Cost Customer 1 1 $7,000 Customer 2 1 $7,000 Customer 3 1 $7, Heterogeneous or Homogenous SAP Migration Costs To facilitate the migration of physical SAP systems to a virtualized VMware environment, a certified SAP and VMware migration consultant is needed. The time for the consultancy depends on the SAP database size. For databases smaller than 500 GB, twelve days are assumed (5-Dev, 3 QAS, 3 PRD, 1-STDBY). 29

35 Typical Costs per Day for a Certified SAP Migration Consultant in Germany Service Cost per Day Certified SAP and VMware Consultant Approx. $2,400 Source: VMware Partner TCO calculation: Initial Certified Consultant Costs = Number of days * Cost per day 30

36 6 Investment for SAP Physical to Virtual Migration An SAP system migrated to other platforms with different databases and/or operating systems is called a heterogeneous SAP system copy. If databases and operating systems remain the same, the migration is called a homogenous SAP system copy. The procedures and tools are supplied by SAP. In the case of heterogeneous SAP system copies, SAP strongly recommends the engagement of a certified SAP Migration Consultant. For homogenous SAP system copies, there is no specific SAP recommendation. The table following shows the decisions made by the three customers in this study on changing the operating system and the database for their physical to virtual (P2V) migration. Customer Changes to Operating System and Database for Virtualization Customer Operating System Change Database Change SAP System Copy Procedure Customer 1 X X Heterogeneous Customer 2 X Heterogeneous Customer Homogenous 6.1 System Copy Categories SAP Heterogeneous System Copy A heterogeneous system copy is defined as one in which either the operating system or the database system or both are changed. A benefit of this kind of migration is the reorganization of the database and the combination of SAP Unicode features. In SAP terminology, the database is exported to the file system and imported into the target system SAP Homogenous System Copy A homogeneous system copy is defined as one in which the target system uses the same operating system and database as the source system. The database contents are copied from the source system to the target system. This can be done by restoring a backup or with database export/import tools. 6.2 Physical to Virtual Migration VMware Converter VMware vcenter Converter is able to run on a wide variety of hardware and supports most commonly-used versions of the Microsoft Windows and Linux operating systems. VMware Converter is also a powerful tool for converting SAP systems. The following tasks can be performed with this migration tool: Quick and reliable conversion of physical machines (locally or remotely) into virtual machines without any disruption or downtime. Performance of complete multiple conversions simultaneously with a centralized management console and an intuitive conversion wizard. Conversion of other virtual machine formats such as Microsoft Virtual PC and Microsoft Virtual Server or backup images of physical machines such as Symantec Backup Exec System Recovery or Norton Ghost to VMware virtual machines. 31

37 Restoration of VMware Consolidated Backup (VCB) images of virtual machines to run virtual machines. Cloning and backup of physical machines to virtual machines as part of a disaster recovery plan Customer P2V SAP Migration Costs All three reference customers planned their P2V projects together with a VMware partner who provides VMware Certified Professionals and SAP Certified Consultants. The VMware Converter exists in two versions: stand-alone or integrated in vcenter. The standalone VMware Converter is available free of charge and can be used while the systems are running. When converting hosts with SAP systems, conversion takes place while the systems are down. The number of consulting days and the costs are listed in the following table. Initial Consulting and Service Costs for P2V Migration Customer Number of SAP Systems Consultant Days* Cost** Customer $24,000 Customer $14,400 Customer $14,400 *Consultant Day = 8 hours **Consultant Fee = $2, per day 32

38 7 Use Case Scenarios Before and After Virtualization In this chapter we describe some special SAP issues and procedures and explain how customers save costs with VMware tools. IT departments face two key challenges in change management: patch testing and testing upgrades for compatibility with standard corporate hardware, operating systems, and application configurations. IT organizations traditionally need to procure identical hardware and create testing environments that mirror the operating system and application configurations of the production environment. A typical and recommended SAP landscape consists of DEV, QAS and PRD systems. Customers also host other SAP systems for training and testing purposes. With VMware infrastructure, SAP basis teams are able to clone productive systems on the fly and create a set of virtual machine libraries that mirror the productive environment. They can then be used for provisioning the test environment. The latest patches and upgrades can be tested on these virtual machines running SAP applications, eliminating the need to have dedicated hardware to perform these tests. Patches can be rolled into production with minimal interruption to endusers. In the event of problems, the virtual machines can be instantly rolled back using the VMware snapshot features. For the purposes of clarification, a short explanation of SAP products and business solutions follows. 7.1 SAP Solution Architecture The SAP Business Suite is one of the world's most comprehensive families of adaptive business applications, providing best- of-breed functionality built for complete integration, industryspecific functionality, unlimited scalability, and easy collaboration over the Internet. Individually, SAP Business Suite applications help customers manage their most critical business processes. Collectively, they form a tightly-integrated suite that adds value to every facet of a customer s business, including its interactions with partners, suppliers and endcustomers. The core product from SAP is called SAP ERP. In addition to ERP software, other key SAP products and solutions are available: SAP NetWeaver Business Intelligence Suite (SAP BI) Customer Relationship Management (SAP CRM) Supply Chain Management (SAP SCM) Supplier Relationship Management (SAP SRM) Human Resource Management Systems (SAP HRMS) Product Life Cycle Management (SAP PLM) Process Integration (PI) (Message broking, Message workflows) Enterprise Portal (EP) SAP Knowledge Warehouse (KW) The SAP Business Suite applications are based on the SAP NetWeaver platform, a technology and integration platform. SAP NetWeaver enables rapid but controlled business process changes. Through its enterprise services repository, the platform incorporates business functionality in the form of ready-to-use enterprise services and process components. It also provides an integrated platform of composition technologies for orchestrating business 33

39 processes, composing applications and deploying innovative solutions. SAP NetWeaver consists of an ABAP and/or J2EE Stack. SAP enterprise applications can be deployed on a two- or three-tier architecture. In terms of software deployment, the three-tier client-server architecture consists of a presentation layer, an application layer, and a database layer. In terms of hardware deployment these three layers can run separately on different computers or together on the same computer, depending on the requirements and size of the SAP solutions being deployed by each customer. The presentation and application server layers can be distributed over multiple computers. The three-tier architecture targets the support of large numbers of users. The two-tier architecture is usually sufficient for many small and midsize companies, as well as for sandbox, development, training and test systems. A complete SAP implementation may consist of hundreds of systems with different SAP applications running on dedicated servers. Depending on the application and the time of monthly processing, many SAP environments may have a low server utilization rate. Those with low utilization rates may be worthwhile targets for virtualization with VMware virtualization technology. 7.2 Customer SAP Solution-Based Landscapes In the following chapters we show, in detailed scenarios, what benefits the customers obtained with the virtualization of their SAP system landscapes. First we explain what the SAP landscape and systems included prior to being virtualized; then we show the reduction of physical infrastructure after virtualization SAP Landscapes Before Virtualization All customers in this study drive an SAP ERP installation with additional dialog instances. As a result, we focus only on this kind of SAP solution-based landscape in this study. Customer 1: This customer's company was founded as a family business in 1849 in Germany and has been a supplier to the automotive industry since This company operates in the automotive sector, with more than 3,000 employees and more than 400 concurrent SAP users worldwide. This customer uses SAP ERP systems attached to SAP Content Server systems (file based) for its CAD drawings. The SAP R/3 Release 4.7 landscape consists of five SAP systems: DEV, QAS, PRD, EDU, SOL. DEV = SAP Development System QAS = SAP Quality Assurance System PRD = SAP Productive System EDU = Education System SOL = SAP Solution Manager These SAP systems originally ran in a mainframe environment. After virtualization the systems were upgraded to SAP Release ECC

40 Due to internal SLA (Reliability, High Availability) requirements, two hosts run in parallel as a cluster. The hosts run several SAP central instances with different port numbers. The SAP database files are located on a Fibre Channel SAN environment from the same vendor. This customer has its own dedicated SAP / VMware infrastructure. The VMware ESX host servers are used exclusively for the SAP infrastructure. Aggregated Annual Hardware, Storage, and Network Costs for One Mainframe Host Costs before Virtualization No. of Units Total Cost SAP Hardware Mainframe (4-way, 64 GB 1 $219,000 RAM)* Operating System (4 CPUs)** 1 $ 24,700 Hardware Maintenance 1 $ 46,000 Software Maintenance 1 $ 21,000 SAP Network 4 Network Cards $ 767 SAP Storage (HBAs + Port) 2 $ 1,540 Console 1 $ 1,800 Total - $314,807 * The pre-virtualization hardware costs for this customer are based on a vendor quote of Q ** Cluster is part of the operating system The objective of this customer was to reduce the cost of hardware, hardware maintenance, and software maintenance. Customer 2: Customer 2 operates in the pharmaceutical sector. The company is located in Germany and has more than 2,300 employees. Its SAP PRD systems handles more than 200 concurrent SAP users on a UNIX cluster, all running on the same cluster with different port numbers. The initial SAP release was 4.6C. Since then the SAP systems have been upgraded to SAP ECC 6.0 within the virtualized infrastructure. The DEV, QAS and PRD SAP systems for the commercial SAP modules were hosted on one Unix cluster with two hosts. The SAP database files are located on a SAN box attached via Fibre Channel. Aggregated Annual Hardware, Storage, and Network Costs for One UNIX Host Costs before Virtualization No. of Units Total Cost SAP Hardware Unix Cluster (4-way, 32 GB 1 $88,500 RAM)* Operating System (4 CPUs) 1 $ 3,050 Cluster Software $20,000 Hardware Maintenance 1 $ 8,000 Software Maintenance 1 $ 780 SAP Network 2 Network Cards $ 300 SAP Storage (HBAs + Port) 2 $ 1,480 Total - $122,110 * The pre-virtualization hardware costs for this customer are based on the original purchase price rather than today s price, since this type of hardware is not available anymore. 35

41 The objective of this customer was to reduce the costs for hardware, hardware maintenance, and cluster software. Customer 3: Customer 3 is a federal government institution for policy, research and practice in the field of vocational education and training. The SAP systems, based on release SAP ECC 6.0, originally ran on x86 hosts used by 100 SAP end users. The SAP landscape consists of DEV, PRD and SAP Solution Manager together with SAP Enterprise Portal 7.0 for using the SAP package Employee Self Service. The SAP Enterprise Portal landscape also includes DEV and PRD systems. In addition, the customer works with an SAP BW landscape, with DEV and PRD, attached to the SAP portal enterprise for BEX queries. Each SAP solution originally ran on a dedicated server. Aggregated Annual Hardware, Storage and Network Costs for One x86 Host Costs Before Virtualization No. of Units Total Cost SAP Hardware X86 (2-way, 8 GB 1 $ 7,500 RAM) Operating System 1 $ 1,000 Cluster Software 1 $ 2,000 Hardware Maintenance (24/7) 1 $ 1,100 Software Maintenance 1 $ 0 SAP Network 2 Network Cards $ 250 SAP Storage (HBAs + Port) 1 $ 1,400 Total - $13,250 The customer s objective was to reduce costs for the cluster software for productive SAP BW, SAP Enterprise Portal, and SAP ERP. A further objective was saving external consultant knowhow for other SAP projects SAP Landscapes After Virtualization Customer 1: Previously on two mainframes, the virtualized SAP systems were distributed to three VMware ESX hosts based on x86 technology. The customer also virtualized some of the network services including domains, DNS, WINS, DHCP, and so forth. (Analyses of these other virtualized services are not included in this documentation.) This customer has its own dedicated SAP / VMware infrastructure that is, the VMware ESX hosts run the SAP infrastructure exclusively. 36

42 Aggregated Annual Hardware, Storage, and Network Costs for One x86 VMware ESX Host for Customer 1 Costs after Virtualization No. of Units Total Cost ESX x86 Server (4 Socket) 1 $ 17,300 Operating System 1 $ 0 Cluster Software $ 0 VMware Enterprise Edition 2 $ 3,834 Hardware Maintenance (24/7) 1 $ 1,100 Software Maintenance 1 $ 2,800 SAP Network 2 Network Cards $ 300 SAP Storage (HBAs + Port) 2 $ 1,480 Total - $26,814 Customer 2: Two UNIX clusters were replaced by two ESX host systems. The following diagram shows the distribution of the SAP systems and the SAP instances to the VMware Infrastructure. The systems are distributed to different systems in case of a failover. Aggregated Annual Hardware, Storage, and Network Costs for One x86 VMware ESX Host for Customer 2 Costs after Virtualization No. of units Total Cost ESX x86 Server (2 Socket) 1 $ 7,500 Operating System 1 $ 0 Cluster Software $ 0 VMware Enterprise Edition 2 $ 1,917 Hardware Maintenance (24/7) 1 $ 1,100 Software Maintenance 1 $ 1,400 SAP Network 2 Network Cards $ 300 SAP Storage (HBAs + Port) 2 $ 1,480 Total - $13,697 37

43 Customer 3: This customer also virtualized all running SAP systems to two ESX host servers, implemented in a VMware cluster. Aggregated Annual Hardware, Storage, and Network Costs for One x86 VMware ESX Host for Customer 3 Costs after Virtualization No. of Units Total Cost ESX x86 Server (2 Socket) 1 $ 7,500 Operating System 1 $ 0 Cluster Software $ 0 VMware Enterprise Edition 2 $ 1,917 Hardware Maintenance (24/7) 1 $ 1,100 Software Maintenance 1 $ 1,400 SAP Network 2 Network Cards $ 300 SAP Storage (HBAs + Port) 2 $ 1,480 Total - $13, Annual Hardware and Software Cost Savings The following table summarizes the cost savings experienced by all three customers for SAP hardware and software after virtualizing, as well as the savings resulting from replacement of the cluster environment with VMware HA. Annual Cost Savings for Customer Hardware and Software for SAP Solution Landscape Physical Architecture VMware Architecture Hardware and Software Costs No. of Servers Cost No. of Servers Cost Savings Savings in % Customer 1 2 $ 629,614 3 $80,442 $549, Customer 2 2 $244,220 2 $27,394 $216, Customer 3* 5 $ 66,250 2 $27,394 $ 38, * The x86 hardware was three years old. The new hardware generation offers more cores with better performance results. The new server models today contain 10 times more memory capacity compared to the older models Annual A/C and Power Savings The next table shows the power costs and savings for each customer. Annual Power Costs and Savings* Physical Architecture VMware Architecture No. of Servers Cost No. of Servers Cost Savings Savings in % Customer 1** 2 $9,021 3 $8,462 $ Customer 2*** 2 $5,641 2 $2,698 $2, Customer 3 5 $6,745 2 $2,698 $4, * Cost $0.28 KW/h ** Mainframes use more power than x86 systems *** Different number of CPUs 38

44 7.2.5 Annual Cooling Costs for SAP Servers To eliminate the heat produced by an SAP server, an investment of almost the same amount of energy is required. Annual Cooling Costs and Savings for SAP Server and Mainframe* Physical Architecture VMware Architecture No. of Servers Cost No. of Servers Cost Savings Savings in % Customer 1** 2 $9,021 3 $8,462 $ Customer 2*** 2 $5,641 2 $2,698 $2, Customer 3 5 $6,745 2 $2,698 $4, * Cost $0.28 KW/h ** Mainframes use more power than x86 systems *** Different number of CPUs 7.3 Deploying an SAP Solution with VMware Templates Once the decision to install an SAP ERP solution is made, the SAP landscape must be installed and deployed. Typically, initial installation and deployment occurs only once. Upgrade and patch scenarios occur later on a regular basis. Sometimes, however, the SAP technologies make it necessary to install additional SAP solutions together with the central SAP ERP system. SAP Business Warehouse (BI) and SAP Solution Manager are good examples. With SAP BW, an SAP Enterprise Portal is helpful for creating new queries with the SAP Business Query Designer and Explorer (SAP BEx). To obtain the latest SAP patch stacks from the SAP Service Marketplace on a regular basis, it is mandatory to use the SAP Solution Manager with the feature Maintenance Optimizer (MOPZ). The SAP Solution Manager is based on the SAP NetWeaver Platform and has the same technical platform as an SAP ERP system Cost of Deploying a Solution Before Virtualization Typically, an installation of an SAP solution takes at least two days. The customers use different numbers of SAP systems per SAP landscape. Aggregated SAP Server, Administrative and Deployment Costs per Clustered SAP Solution Landscape Before Virtualization Physical Provisioning and Administrative Cost for one SAP Solution Landscape Customer Provisioning Number No. of Hours Total Cost SAP CI Hours Customer 1 Setup Host $ 270 OS + DB $1,125 SAP Software $3,600 SAP Cluster $1,800 Administrative Costs $ 720 Total $7,515 Customer 2 Server HW $

45 OS + DB $ 675 SAP Software $2,160 SAP Cluster $1,800 Administrative Costs $ 720 Total $5,625 Customer 3 Server HW $ 675 OS + DB $1,350 SAP Software $4,320 SAP Cluster $5,400 Administrative Costs $1,800 Total $13,545 Average hourly labor rate = $45 OS=Operating system DB=Database HW=Hardware Customer 3 runs three SAP solutions: SAP ERP, SAP BW and SAP Portal. To save cluster nodes, the SAP DEV systems also run as cluster nodes. The SAP BW solution ran as a single ABAP Java Stack Application together with SAP Portal. Aggregated SAP Server, Administrative and Deployment Costs for Clustered SAP Solutions Before Virtualization Customer Number of SAP Landscapes Total Costs for SAP Annual Costs for all SAP System Landscapes (3 years lifetime) Customer 1 1 $ 7,515 $2,505 Customer 2 1 $ 5,625 $1,875 Customer 3 3 $13,545 $4, Cost of Deploying a Solution After Virtualization With VMware virtualization technology, the time needed for setting up a complete SAP landscape can be dramatically reduced with VMware templates. In a virtualized environment the initial installation time for the first SAP system in the SAP landscape remains the same as in the physical world. Once the first system is set up, it can become an SAP template, allowing downstream SAP systems to be deployed in half a day. Overall, an initial three-system SAP landscape can be deployed and adjusted in three days. Initial Aggregated SAP Server, Administrative and Deployment Costs with VMware Infrastructure Physical Provisioning and Administrative Costs for one SAP Solution Landscape Customer Provisioning Number No. of Hours Total Cost SAP CI Hours Customer 1 40

46 Set up Host $ 405 OS + DB $ SAP Software $ 1,800 VMware $ 675 Administrative Costs $ 1,080 Total $4, Customer 2 Server HW $ 270 OS + DB $ SAP Software $ 1,080 VMware $ 450 Administrative Costs $ 720 Total $2, Customer 3 Server HW $ 270 OS + DB $ 675 SAP Software $ 2,160 VMware $ 450 Administrative Costs $ 720 Total $ 4,275 Average hourly labor rate = $45 OS=Operating system DB=Database HW=Hardware VMware= Setup VI and configuration Initially Aggregated SAP Server, Administrative and Deployment Costs per High Availability SAP Solution Landscape with VMware Infrastructure* Customer Number of SAP Before After Virtualization Saving in % Landscapes Virtualization Customer 1 1 $ 7,515 $4, Customer 2 1 $ 5,625 $2, Customer 3 3 $13,545 $4, *See High Availability and Clustering SAP systems are mission-critical for most companies, which means there is a need for a failover and switching scenario. SAP systems have three critical Single Point of Failure (SPOF) components: Database (Database Vendor) Message service (SAP) Enqueue service (SAP) Besides redundant network interface adapters, switches, routers, DNS Servers, RAID Levels and Storage (NAS, SAN), these components must be secured via a cluster solution. 41

47 7.4.1 SAP Database An SAP application consists of one or more instances of an application server. Each instance can run on a separate server, but it is also possible to operate multiple instances on one host. An SAP instance can provide different service types. The standard SAP services, which can be configured on all instances of the SAP component, are dialog, batch, update, and spool work processes. The failure of an SAP instance, on which these standard services are configured, causes a termination and rollback of all transactions currently processed within this instance. Database consistency is guaranteed at all times. Terminated transactions can be repeated on one of the remaining instances. If the SAP database is not available, all running work processes are still pending. In a cluster environment, the DBMS fails over to another node, and the work processes have a built-in recurring polling mechanism and reconnect themselves once the database is up and running again SAP Message and Enqueue Service Apart from the standard services, there are two other services that exist only once. They are supplied by the message service and the enqueue service and are potential single points of failure. The SAP instance running both of these services is called the central instance (CI). In case of a stand-alone or enqueue replication service, the enqueue service is operated separately from the other SAP services and independently of the other application servers. Since the message server can also be operated separately from the other application servers, both of these critical components can be restarted faster than a complete application server. The enqueue service is a critical component of the SAP system. It administers locks using enqueue objects within SAP transactions that can be requested by applications to ensure consistency within the SAP system. Since the lock table is held in the main memory of the enqueue server, a server failure without additional replication mechanisms results in a loss of locks held. To maintain consistency, all open transactions are rolled back after the enqueue server is restarted. The enqueue replication service enables the lock table to be replicated on a second server, the so-called replication server. A copy of the lock table is maintained and permanently updated on this server. If the enqueue service fails, a new enqueue service is started on the replication server using a failover solution (cluster, partner solution) and this replication service creates a new lock table based on the copy of the lock table. This enables the enqueue service, and therefore the whole SAP component, to continue operation almost without interruption. If the enqueue service fails, transactions are no longer terminated, so that work can be continued transparently. 42

48 The solution is platform-independent. It can be used in the same way for both high-availability environments and normal environments (that is, without the replication server). SAP hardware partners provide the cluster technology for the enqueue server and its replication server, which is required for the enqueue service to operate without interruption. To avoid the single point of failure with the message server, this service must simply be restarted. It can be restarted automatically within a few milliseconds using cluster technology HA and Clustering Before Virtualization All customers in this study have secured their productive, physical SAP solution landscapes with the aid of different cluster solutions offered by different vendors. The cluster license costs are included and aggregated in the hardware and software costs. The initial SAP cluster installation costs are included in the SAP server and SAP software deployment costs. All customers usually need approximately five days to set up a two-node cluster. These values were provided by the customers. Customers report that in an SAP productive cluster environment they need about four additional hours per cluster node for patching and testing a clustered SAP system. The SAP patch procedure in an SAP cluster is described in detail in the SAP patch manuals. New SAP patches are released at least twice a year. Every patch scenario in an SAP cluster needs additional attention and mechanisms to implement SAP support patches. Special database tools and procedures, virtual hostnames, additional IP addresses, redundant SAP licenses, switching the nodes in a specific sequence, replacing executables manually, testing, etc. are only some of the technical efforts involved. The following table shows the annual planned downtime, given the number of available patches per year and clustered SAP central instances. 43

49 Annual Planned Downtime Costs for SAP Cluster Central Instances No. of Servers Number of SAP Clustered Central Instances Additional Downtime in Hours due to a Cluster Downtime for SAP PRD Hardware and Software Maintenance in Hours Total Hours Planned Downtime per year Customer = $ 3,840,000 Customer = $ 3,840,000 Customer (16* 3) = $11,040,000 Assumptions: SAP ERP system $120,000 downtime per hour Two SAP patch stacks per year Four hours downtime per server per year Eight hours downtime per SAP patch HA and Clustering After Virtualization VMware Infrastructure offers a powerful high availability feature that allows SAP customers to completely replace their SAP cluster implementation. In case of a VMware ESX host server failure, all the SAP virtual machines restart on one of the available VMware ESX hosts. This behavior can be controlled by VMware cluster settings and VMware Distributed Resource Scheduler (DRS). With the VMware HA feature no additional activities are necessary for SAP hostnames SAP IP addresses SAP database and tools SAP message server SAP enqueue server SAP licenses SAP cluster tests HA also simplifies SAP patch scenarios. The following table shows the planned downtime in an SAP cluster with VMware High Availability. Annual Planned Downtime for SAP Infrastructure with VMware HA Customer No. of Servers No. of SAP Clustered Central Instances Additional Downtime in Hours due to a Cluster Downtime Total for SAP PRD Hard- and Software Maintenance in Hours Total Hours Planned Downtime per Year Cost Costs Customer = $1,920,000 Customer = $1,920,000 Customer (16 * 3) = $5,760,000 Assumptions: Two SAP patch stacks per year 44

50 Four hours downtime per server per year Eight hours downtime per SAP patch Summary of SAP clustering and VMware high availability VMware mechanisms such as VMotion and HA can reduce planned downtime for hardware and software maintenance by up to 50 percent. Comparison of Annual Planned Downtime and Costs* Customer Before Virtualization in Hours After Virtualization in Hours Saving in Hours Saving in % Contribution to TCO Savings** Customer % $ 576,000 Customer % $ 576,000 Customer % $1,584,000 *SAP ERP system $120,000 downtime per hour **30% contribution to TCO, see above 7.5 SAP Front End Client Systems SAP software has evolved from mainframe computing to three-tier architecture consisting of the database layer, application (business logic) layer, and user interface layer. The advantage of having a client-server architecture is the possibility of making changes or scaling one layer without having to retool the whole system. The SAP product name R/3 stands for runtime system three and the client-server environment provides a set of business applications for the system. The R/3 architecture allows distribution of the workload to multiple PCs connected in a network. The SAP runtime system is designed in such a way that it distributes the presentation layer, application logic, and the data management to different computers. In our study the customers have between 100 and 400 SAP end users, most of them using Microsoft Windows-based PCs. The front end application installed and used for SAP systems is called the SAP GUI, SAP logon(pad). Each PC usually needs to be replaced every three years. In the meantime, they require hands-on additions and changes, operating system and application patches, upgrades, security, configuration and user management, service activities, support and administration Client Systems Before Virtualization According to a 2006 Gartner survey, a typical desktop in the SAP environment costs $488 per PC per year to manage and support. Annual TCO Comparison of PCs with Server-based Computing PC Technical Services Current (As Is) Annual Cost per Desktop User Adds and Changes $ 11 Hardware Configuration $ 26 Hardware Deployment $ 7 Software Deployment $

51 Application Management $ 32 Backup, Recovery, Archiving $ 7 Service Desk $ 239 Security Management $ 30 IT Administration $ 15 Total per desktop per Year $488 Source: Gartner June 15, 2006 The costs over three years for a PC are $1,464. Only Customer 3 with approximately 100 SAP end users deployed VMware Desktop Infrastructure (VDI) for the SAP logon application. Annual Costs for SAP PCs with VMware VDI Customer Number of Concurrent SAP Annual Cost for all PCs Users Customer $195,200 Customer $ 97,600 Customer $ 48, Capital Investment in VMware VDI Pricing for VMware VDI is based on a list price of $150 per concurrent user and is packaged into two bundled offerings: the VMware VDI Starter Edition and the VMware VDI Bundle 100 Pack. Both bundles include VMware Infrastructure Enterprise Edition for VDI (which consists of VMware ESX 3.5 and VMware vcenter 2.5) and the VMware Virtual Desktop Manager 2. The VMware VDI Starter Edition, which covers 10 virtual desktops, has a list price of $1, We calculated the cost of VDI based on the VMware Bundle 100 Pack for Customer 3. The VMware VDI Bundle 100 Pack includes 100 virtual desktops for the list price of $15,000. Customers may add additional licenses by purchasing in increments of 10, based on the list price of $150 per concurrent user. The following tables show the costs for the VDI Bundle 100 Pack as well as the costs for additional infrastructure hardware. Software Investment in VMware VDI over Three Years Number Cost VMware VDI Software 100 $15,000 Total $15,000 Source: VMware price information Cost of Additional Hardware Required for VDI over Three Years Additional Components Description Number Cost ESX host servers 2 * Quad Core,32 GB 1 $ 22,500 RAM SAN 2 Ports per ESX 4 $ 4, GB per user Central Storage per 100 *10 =1TB $ 6,000 User Total $32,900 46

52 7.5.3 Client Systems After Virtualization With VMware VDI, customers can avoid expenditures to refresh SAP front end desktop PCs. Pricing for VMware VDI in our analysis is based on a list price of $150 per concurrent user. The following table shows that the reduction in annual cost per client system with VMware VDI is US$ Annual TCO Comparison of PCs with VMware VDI PC Technical Services Reduction with VDI in % Annual cost per desktop in with VMware VDI User Adds and Changes 80 $ 2 Hardware Configuration 30 $ 18 Hardware Deployment 30 $ 5 Software Deployment 60 $ 49 Application Management 30 $ 22 Backup, Recovery, Archiving 100 $ 0 Service Desk 60 $ 96 Security Management 50 $ 15 IT Administration 50 $ 7 Total per desktop per year $ 214 The following table shows the calculated three year cost savings for Customer 3 with 100 SAP front end users before and after virtualization. Customer Costs before Costs after Savings Saving in % Virtualization Virtualization Customer 3 $146,400 $112,100 $34, SAP Upgrades and Patches VMware snapshot technology is a very fast backup and recovery tool for existing SAP systems. This tool provides the UNDO button for faulty and incomplete SAP upgrades and SAP patch scenarios. VMware hot clone technology offers a complete system cloning mechanism for pre-testing upgrades and SAP patches, while the SAP system is still up and running. From a technical point of view, the process for performing SAP upgrades and SAP patches are similar. Both maintenance functions use the same SAP tools and transport mechanisms. These procedures manipulate database dictionary information, executables, and customizing tables. To minimize downtime, both allow import of new data and patches while end users are still working and processing transactional or master data. The following diagram illustrates SAP procedure for importing inactive sources. 47

53 Source: SAP All three customers use this function to minimize downtime. But in case of an unsolvable error, a backup must be applied to recover the system to the starting point. In this case, user data created in the uptime phase can be lost. At the start of an SAP patch or upgrade installation, an online backup of the database is performed, which is only consistent in combination with the database transaction logs. A 500 GB database takes approximately five hours for such a disk backup. In many enterprises a specific department is responsible for backup and recovery practices involved in SAP patches and upgrade scenarios Upgrades and Patches Before Virtualization An SAP upgrade typically occurs only once in three years. In a traditional SAP upgrade scenario, first the SAP DEV system, then the SAP QAS and finally the SAP PRD are upgraded. The following table shows a time calculation for an SAP upgrade in a productive physical SAP environment with a 500 GB database before the environment was virtualized. The partner company that was responsible for this SAP upgrade provided the report on the number of days required. SAP upgrade scenarios Customer No. of Systems in an SAP Landscape No. of SAP Landscapes Days in Total Customer Customer Customer SAP DEV 5 days First system More days for preparation and troubleshooting SAP QAS 3 days Experienced SAP upgrade SAP PRD 3 days Experienced SAP upgrade SAP Other 3 days Experienced SAP upgrade 48

54 One customer had a problem with the upgraded SAP DEV system, because several items of data necessary for testing the new SAP release were missing. Typically, before an SAP upgrade, customers perform a classical SAP system copy from SAP PRD to SAP DEV. The time required for this process is not accounted for in the table above Upgrades and Patches After Virtualization The customers were able to use a new upgrade strategy in the virtualized environment with VMware cloning and snapshot technology. During the process, running SAP production systems were cloned into an empty virtual machine. The upgrade was tested in this new virtual machine and any errors were analyzed. After successfully upgrading the system, the customizer and developer made the new SAP release adjustments in the non-critical virtual machine, recording the changes into SAP change requests. This can be done over a longer time period without time pressure. Once the system had met all customer requirements, the productive system was upgraded. Afterwards all recorded SAP change requests were applied. Then, instead of making SAP system copies, the data of the productive SAP system was exported and imported to the test systems. There are three advantages to using this scenario: Time and cost savings Consistent SAP system landscape No time limitations for developer and customizer The following table shows the time usage for this new upgrade procedure for a three-system SAP landscape. New SAP Upgrade Procedure with VMware Technology Customer 1 Project Sequence SAP System Procedure VMware / SAP Days Step 1 PRD HOT Clone PRD2 1 Step 2 PRD 2 SAP Upgrade 5 Step 3 PRD 2 Development / Customizing Varies; not timecritical; parallel to PRD Step 4 PRD SAP Upgrade 3 Step 5 QAS SAP Export/Import 1 Step 6 DEV SAP Import* 1 Step 7 EDU SAP Import* 1 Step 8 TST SAP Import* 1 Total Days 13 * Export not necessary anymore 49

55 We gathered the following data before and after virtualization for one of the customer projects. Initial Cost and Time Savings in SAP Upgrade Projects SAP Upgrade SAP Systems for Upgrade Days Before Virtualization Days After Virtualization Saving in Days Savings* Savings in % Customer $9, *Fee of $2,400 per day for an SAP Consultant 50

56 8 TCO Reduction: Three Case Studies This chapter provides detailed information about the TCO savings and ROI achieved by three customers using VMware Infrastructure combined with powerful multi-core x86 hardware to virtualize their SAP systems. The calculation in the following tables shows costs both with and without SAP planned downtime reductions that were achieved by replacing clusters with VMware HA and reducing planned downtime for hardware maintenance with VMware VMotion. Many customers argue that planned downtime is free of charge as it is reserved in the SLAs as a maintenance task. Nevertheless, productive time can be gained back by reducing planned downtime. A company with worldwide production facilities can do business during this time that would have been lost before virtualization was in place. 8.1 TCO and ROI Summary for Customer 1 As shown in the following tables, Customer 1 achieved an 81 percent reduction in overall total cost of ownership over three years, and the return on investment period for the virtualization project was three months. Customer 1 Three-Year TCO Without VMware Infrastructure With VMware Infrastructure Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7,000) Investment SAP P2V $ - $ 24,000 $ (24,000) Investment Training $ - $ 13,500 $ (13,500) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - Includes VMware Licenses - Includes HBAs $ 1,888,842 $ 241,326 $ 1,647,516 SAP Deployment $ 7,515 $ 4,523 $ 2,992 SAP Upgrade $ 40,800 $ 31,200 $ 9,600 Total Direct Costs $ 1,937,157 $ 321,549 $ 1,615,608 Indirect Costs Power Costs $ 27,063 $ 25,386 $ 1,677 Cooling Costs $ 27,063 $ 25,386 $ 1,677 SAP Frontends VDI $ - $ - $ - SAP Planned Downtime $ - $ - $ - Total Indirect Costs $ 54,126 $ 50,772 $ 3,354 Total Cost of Ownership $ 1,991,283 $ 372,321 $ 1,618,962 51

57 Customer 1 Return On Investment Investments Year 1 Year 2 Year 3 Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 24,000 $ $ Investment Training $ 13,500 $ $ Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 235,726 $ 2,800* $ 2,800* Total Investments $ 280,226 $ 2,800 $ 2,800 Savings Server Hardware $ 1,647,516 $ $ SAP Deployment $ 2,992 SAP Upgrade $ 9,600 Power Cost $ 559 $ 559 $ 559 Cooling Cost $ 559 $ 559 $ 559 SAP Frontend VDI $ SAP Planned Downtime $ - $ - $ - Total Savings $ 1,661,226 $ 1,118 $ 1,118 Total Cumulative Investments $ 280,226 $ 283, ,826 Total Cumulative Savings $ 1,661,226 $ 1,662,334 $ 1,663,462 Total Return on Investment 593% 587% 582% ROI Time Frame (in months) 3 *VMware software maintenance (25 percent Platinum) cost per year 52

58 8.2 TCO and ROI Summary for Customer 2 As shown in the following tables, Customer 2 achieved an 83 percent reduction in overall total cost of ownership over three years, and the return on investment period for the virtualization project was two months. Customer 2 Three-Year TCO Without VMware Infrastructure With VMware Infrastructure Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7,000) Investment SAP P2V $ - $ 14,400 $ (14,400) Investment Training $ - $ 9,000 $ (9,000) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 732,660 $ 82,182 $ 650,478 SAP Deployment $ 5,625 $ 2,858 $ 2,767 SAP Upgrade $ - $ - $ - Total Direct Costs $ 738,285 $ 115,440 $ 622,845 Indirect Costs Power Costs $ 16,923 $ 8,094 $ 8,829 Cooling Costs $ 16,923 $ 8,094 $ 8,829 SAP Frontends $ - $ - $ - SAP Planned Downtime $ - $ - $ - Total Indirect Costs $ 33,846 $ 16,188 $ 17,658 Total Cost of Ownership $ 772,131 $ 131,628 $ 640,503 53

59 Customer 2 Return On Investment en Investment for Investments Year 1 Year 2 Year 3 Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 14,400 $ $ Investment Training $ 9,000 $ $ Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 79,382 $ 1,400* $ 1,400* Total Investments $ 109,782 $ 1,400 $ 1,400 Savings Server Hardware $ 732,660 $ $ SAP Deployment $ 2,767 SAP Upgrade $ Power Cost $ 2,943 $ 2,943 $ 2,943 Cooling Cost $ 2,943 $ 2,943 $ 2,943 SAP Frontend VDI $ SAP Planned Downtime $ - $ - $ - Total Savings $ 741,313 $ 5,886 $ 5,886 Total Cumulative Investments $ 109,782 $ 111,182 $ 112,582 Total Cumulative Savings $ 741,313 $ 747,199 $ 753,085 Total Return on Investment 675% 672% 669% ROI Time Frame (in months) 2 * VMware software maintenance (25 percent Platinum) cost per year 54

60 8.3 TCO and ROI Summary for Customer 3 without VMware VDI As shown in the following tables, Customer 3 achieved a 49 percent reduction in overall total cost of ownership over three years for its SAP data center, and the return on investment period for the virtualization project was six months. These figures do not include the customer s desktop virtualization project TCO and ROI. Customer 3 Three-Year TCO Without VDI Without VMware Infrastructure With VMware Infrastructure Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7,000) Investment SAP P2V $ - $ 14,400 $ (14,400) Investment Training $ - $ 4,500 $ (4,500) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - Includes VMware Licenses - Includes HBA $ 198,750 $ 82,182 $ 116,568 SAP Deployment $ 13,545 $ 4,276 $ 9,269 SAP Upgrade $ - $ - $ - Total Direct Costs $ $ $ Indirect Costs Power Costs $ 20,235 $ 8,094 $ 12,141 Cooling Costs $ 20,235 $ 8,094 $ 12,141 SAP Frontends $ - $ - $ - SAP Planned Downtime $ - $ - $ - Total Indirect Costs $ 40,470 $ 16,188 $ 24,282 Total Cost of Ownership $ 252,765 $ 128,546 $ 124,219 55

61 Customer 3 Return On Investment Without VDI Investments Year 1 Year 2 Year 3 Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 14,400 $ $ Investment Training $ 4,500 $ $ Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 79,382 $ 1,400* $ 1,400* Total Investments $ 105,282 $ 1,400 $ 1,400 Savings Server Hardware $ 198,750 $ $ SAP Deployment $ 13,545 SAP Upgrade $ Power Cost $ 4,047 $ 4,047 $ 4,047 Cooling Cost $ 4,047 $ 4,047 $ 4,047 SAP Frontend VDI $ - $ - $ - SAP Planned Downtime $ - $ - Total Savings $ 220,389 $ 8,094 $ 8,094 Total Cumulative Investments $ 105,282 $ 106, ,082 Total Cumulative Savings $ 220,389 $ 228,483 $ 236,577 Total Return on Investment 209% 214% 219% ROI Time Frame (in months) 6 * VMware software maintenance (25 percent Platinum) cost per year 56

62 8.4 TCO and ROI Summary for Customer 3 with VMware VDI As shown in the following tables, Customer 3 achieved a 40 percent reduction in overall total cost of ownership over three years for its SAP front end client deployment with VMware VDI, and the return on investment period for this part of the virtualization project was six months. Customer 3Three-Year Total Cost of Ownership with VDI Without VMware VDI With VMware VDI Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7000) Investment SAP P2V $ - $ 14,400 $ (14,000) Investment Training $ - $ 4,500 $ (4,500) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - Includes VMware Licenses - Includes HBA $ 198,750 $ 82,182 $ 116,568 SAP Deployment $ 13,545 $ 4,276 $ 9,269 SAP Upgrade $ - $ - $ - Total Direct Costs $ $ $ Indirect Costs Power Costs $ 20,235 $ 8,094 $ 12,141 Cooling Costs $ 20,235 $ 8,094 $ 12,141 SAP Frontends $ 146,400 $ 112,100 $ 34,300 SAP Planned Downtime $ - $ - $ - Total Indirect Costs $ 186,870 $ 128,288 $ 58,582 Total Cost of Ownership $ 399,165 $ 240,646 $ 158,219 57

63 Customer 3 Return on Investment with VDI Investments Year 1 Year 2 Year 3 Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 14,400 $ $ Investment Training $ 4,500 $ $ Investment Hardware Includes Hardware Maintenance Includes Network Costs Includes OS, Cluster VMware Licenses Includes HBAs $ 79,382 $ 1,400* $ 1,400* Total Investments $ 105,282 $ 1,400 $ 1,400 Savings Server Hardware $ 198,750 $ $ SAP Deployment $ 13,545 SAP Upgrade $ Power Cost $ 4,047 $ 4,047 $ 4,047 Cooling Cost $ 4,047 $ 4,047 $ 4,047 SAP Frontend VDI $ 11,433 $ 11,433 $ 11,433 SAP Planned Downtime $ Total Savings $ 231,822 $ 19,527 $ 19,527 Total Cumulative Investments $ 105,282 $ 106, ,082 Total Cumulative Savings $ 231,822 $ 251,349 $ 270,876 Total Return on Investment 220% 236% 251% ROI Time Frame (in months) 6 * VMware software maintenance (25 percent Platinum) cost per year 58

64 8.5 Customer 1 TCO /ROI Summary with Planned Downtime Costs As shown in the following tables, when costs of planned downtime are included in the analysis Customer 1 achieved a 61 percent reduction in overall total cost of ownership over three years, and the return on investment period was two months. Customer 1 Three-Year Total Cost of Ownership Without VMware Infrastructure With VMware Infrastructure Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7,000) Investment SAP P2V $ - $ 24,000 $ (24,000) Investment Training $ - $ 13,500 $ (13,500) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - Includes VMware Licenses - Includes HBAs $ 1,888,842 $ 241,326 $ 1,647,516 SAP Deployment $ 7,515 $ 4,523 $ 2,992 SAP Upgrade $ 40,800 $ 31,200 $ 9,600 Total Direct Costs $ 1,937,157 $ 321,549 $ 1,615,608 Indirect Costs Power Costs $ 27,063 $ 25,386 $ 1,677 Cooling Costs $ 27,063 $ 25,386 $ 1,677 SAP Frontends VDI $ - $ - $ - SAP Planned Downtime* $ 3,456,000 $ 1,728,000 $ 1,728,000 Total Indirect Costs $ 3,510,126 $ 1,778,772 $ 1,731,354 Total Cost of Ownership $ 5,447,283 $ 2,100,321 $ 3,346,962 * see chapter

65 Customer 1 Return on Investment Including Costs of Planned Downtime Year 1 Year 2 Year 3 Investments Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 24,000 $ $ Investment Training $ 13,500 $ $ Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 235,726 $ 2,800* $ 2,800* Total Investments $ 280,226 $ 2,800 $ 2,800 Savings Server Hardware $ 1,647,516 $ $ SAP Deployment $ 2,992 SAP Upgrade $ 9,600 Power Cost $ 559 $ 559 $ 559 Cooling Cost $ 559 $ 559 $ 559 SAP Frontend VDI $ SAP Planned Downtime $ 576,000 $ 576,000 $ 576,000 Total Savings $ 2,237,226 $ 577,118 $ 577,118 Total Cumulative Investments $ 280,226 $ 283, ,826 Total Cumulative Savings $ 2,237,226 $ 2,814,344 $ 3,391,462 Total Return on Investment 798% 994% 1187% ROI Time Frame (in months) 2 * VMware software maintenance (25 percent Platinum) cost per year 60

66 8.6 Customer 2 TCO /ROI Summary with Planned Downtime Costs As shown in the following tables, when costs of planned downtime are included in the analysis Customer 2 achieved a 56 percent reduction in overall total cost of ownership over three years, and the return on investment period was two months. Customer 2 Three-Year Total Cost of Ownership Without VMware Infrastructure With VMware Infrastructure Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7,000) Investment SAP P2V $ - $ 14,400 $ (14,400) Investment Training $ - $ 9,000 $ (9,000) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 732,660 $ 82,182 $ 650,478 SAP Deployment $ 5,625 $ 2,858 $ 2,767 SAP Upgrade $ - $ - $ - Total Direct Costs $ 738,285 $ 115,440 $ 622,845 Indirect Costs Power Costs $ 16,923 $ 8,094 $ 8,829 Cooling Costs $ 16,923 $ 8,094 $ 8,829 SAP Frontends $ - $ - $ - SAP Planned Downtime* $ 3,456,000 $ 1,728,000 $ 1,728,000 Total Indirect Costs $ 3,489,846 $ 1,744,188 $ 1,745,658 Total Cost of Ownership $ 4,228,131 $ 1,859,628 $ 2,368,503 * see chapter

67 Customer 2 Return On Investment including Costs of Planned Downtime Year 1 Year 2 Year 3 Investments Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 14,400 $ $ Investment Training $ 9,000 $ $ Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 79,382 $ 1,400* $ 1,400* Total Investments $ 109,782 $ 1,400 $ 1,400 Savings Server Hardware $ 732,660 $ $ SAP Deployment $ 2,767 SAP Upgrade $ Power Cost $ 2,943 $ 2,943 $ 2,943 Cooling Cost $ 2,943 $ 2,943 $ 2,943 SAP Frontend VDI $ SAP Planned Downtime $ 576,000 $ 576,000 $ 576,000 Total Savings $ 1,317,313 $ 581,886 $ 581,886 Total Cumulative Investments $ 109,782 $ 111, ,582 Total Cumulative Savings $ 1,317,313 $ 1,899, 199 $ 2,481,085 Total Return on Investment 1200% 1708% 2204% ROI Time Frame (in months) 2 * VMware software maintenance (25 percent Platinum) cost per year 62

68 8.7 Customer 3 TCO /ROI Summary with Planned Downtime Costs As shown in the following tables, when costs of planned downtime are included in the analysis Customer 3 achieved a 48 percent reduction in overall total cost of ownership over three years, and the return on investment period was one month. Customer 3 Three-Year Total Cost of Ownership of Without VMware Infrastructure With VMware Infrastructure Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7000) Investment SAP P2V $ - $ 14,400 $ (14,000) Investment Training $ - $ 4,500 $ (4,500) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - Includes VMware Licenses - Includes HBA $ 198,750 $ 82,182 $ 116,568 SAP Deployment $ 13,545 $ 4,276 $ 9,269 SAP Upgrade $ - $ - $ - Total Direct Costs $ $ $ Indirect Costs Power Costs $ 20,235 $ 8,094 $ 12,141 Cooling Costs $ 20,235 $ 8,094 $ 12,141 SAP Frontends $ $ $ SAP Planned Downtime* $ 9,936,000 $ 5,184,000 $ 4,752,000 Total Indirect Costs $ 9,976,470 $ 5,200,188 $ 4,776,282 Total Cost of Ownership $ 10,188,765 $ 5,312,546 $ 4,876,219 * see chapter

69 Customer 3 Return On Investment Including Costs of Planned Downtime Year 1 Year 2 Year 3 Investments Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 14,400 $ $ Investment Training $ 4,500 $ $ Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - VMware Licenses - Includes HBAs $ 79,382 $ 1,400* $ 1,400* Total Investments $ 105,282 $ 1,400 $ 1,400 Savings Server Hardware $ 198,750 $ $ SAP Deployment $ 13,545 SAP Upgrade $ Power Cost $ 4,047 $ 4,047 $ 4,047 Cooling Cost $ 4,047 $ 4,047 $ 4,047 SAP Frontend VDI $ - $ - $ - SAP Planned Downtime $ 1,584,000 $ 1,584,000 $ 1,584,000 Total Savings $ 1,804,389 $ 1,592,094 $ 1,592,094 Total Cumulative Investments $ 105,282 $ 106, ,082 Total Cumulative Savings $ 2,074,389 $ 3,396,483 $ 4,988,577 Total Return on Investment 1714% 3184% 4616% ROI Time Frame (in months) 1 * VMware software maintenance (25 percent Platinum) cost per year 64

70 8.8 Customer 3 TCO /ROI Summary with Planned Downtime Costs and VMware VDI As shown in the following tables, when VMware VDI and costs of planned downtime are included in the analysis Customer 3 achieved a 48 percent reduction in overall total cost of ownership over three years, and the return on investment period was one month. Customer 3 Three-Year Total Cost of Ownership of Without VMware VDI With VMware VDI Savings Direct Costs Investment Virtualization Check $ - $ 7,000 $ (7000) Investment SAP P2V $ - $ 14,400 $ (14,000) Investment Training $ - $ 4,500 $ (4,500) Investment Hardware - Includes Hardware Maintenance - Includes Network Costs - Includes OS, Cluster - Includes VMware Licenses - Includes HBA $ 198,750 $ 82,182 $ 116,568 SAP Deployment $ 13,545 $ 4,276 $ 9,269 SAP Upgrade $ - $ - $ - Total Direct Costs $ 212,295 $ 112,358 $ 99,937 Indirect Costs Power Costs $ 20,235 $ 8,094 $ 12,141 Cooling Costs $ 20,235 $ 8,094 $ 12,141 SAP Frontends $ 146,400 $ 112,100 $ 34,300 SAP Planned Downtime* $ 9,936,000 $ 5,184,000 $ 4,752,000 Total Indirect Costs $ 10,122,870 $ 5,312,288 $ 4,810,582 Total Cost of Ownership $ 10,335,165 $ 5,424,646 $ 4,910,519 * see chapter

71 Customer 3 Return On Investment including Costs of Planned Downtime and VMware VDI Year 1 Year 2 Year 3 Investments Investment Virtualization Check $ 7,000 $ $ Investment SAP P2V $ 14,400 $ $ Investment Training $ 4,500 $ $ Investment Hardware Includes Hardware Maintenance Includes Network Costs Includes OS, Cluster VMware Licenses Includes HBAs $ 79,382 $ 1,400* $ 1,400* Total Investments $ 105,282 $ 1,400 $ 1,400 Savings Server Hardware $ 198,750 $ $ SAP Deployment $ 13,545 SAP Upgrade $ Power Cost $ 4,047 $ 4,047 $ 4,047 Cooling Cost $ 4,047 $ 4,047 $ 4,047 SAP Frontend VDI $ 11,433 $ 11,433 $ 11,433 SAP Planned Downtime $ 1,584,000 $ 1,584,000 $ 1,584,000 Total Savings $ 1,815,822 $ 1,603,527 $ 1,603,527 Total Cumulative Investments $ 105,282 $ 106, ,082 Total Cumulative Savings $ 1,815,822 $ 3,419,349 $ 5,022,876 Total Return on Investment 1725% 3205 % 4647% ROI Time Frame (in months) 1 * VMware software maintenance (25 percent Platinum) cost per year 66

72 9 Virtualizing Large Enterprise Applications with VMware vsphere VMware began delivering the next generation of VMware Infrastructure, renamed VMware vsphere 4, in May VMware vsphere 4 delivers a number of technical enhancements including: More virtual processors per virtual machine (from 4 to 8) More virtual NICs per virtual machine (from 4 to 10) More memory per virtual machine (from 64 GB to 255GB) A 3x increase in network throughput (from 9 Gb/s to 30Gb/s) A 3x increase in the maximum recorded I/O operations per second (to over 300,000) A new maximum recorded number of transactions per second - 8,900. Distributed power management, which automatically assesses server bandwidth requirements of applications at various times of day. During off-peak hours, DPM consolidates virtual machines on fewer servers and powers down unnecessary hardware. Thin provisioning with VMware vstorage provides dynamic storage allocation that increases automatically when needed. A new Fault Tolerant feature for single-processor virtual machines This new version opens the way for customers with large SAP implementations, such as the ones described in this study, to pursue virtualization and its TCO benefits with full confidence that their SAP solutions will meet or even exceed performance SLAs. 67

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