Virtualization, charge-back and the upgrade process

There are two main topics of debate around the virtualization space when I’ve been talking to people, first of all is charge-back, the second is the upgrade path, and what constitutes as ’support activity.

We’ll cover each one separately, but let’s start with charge-back. Let’s say the business need a new web site deployed, they’ve got the database and the com+ server capacity, they just want a few more web servers, one for production and one for BCP. In the olden days, the traditional model on a simple level, IT would analyze the business need, buy two midrange rack servers, let’s say they’re £3,000 with the memory and the disks, then depreciate that cost over three years, with a support fee, which we’ll say is £300, that’s fine, we can all do the maths, £1,300 a year, and if I keep the box longer I just pay the support cost. The cost of the patching, the data center hosting, the power are all indirect hidden costs that typically are included in the hosting support fee. With virtualization I have a ‘problem’, firstly who buys the ESX server? Who pays the depreciation? Me? IT? You want me to go and buy a DL585 with some SAN storage? But on the basis I get a DL585 with storage costing me £15,000 and £500 a year in storage costs, I can get 16 machines say, that’s £1,000 per virtual instance, which is the same cost as as the physical box, how do I sell that?

But should we not turn this around? Do we want to make a profit initially anyway? Aren’t we seeking buy in to this technology? Should we not be moving to a service based solution for the business, that they say I want a virtual machine, that’s fine, the cost is £300 set up fee, £600 a year support cost, and if you want more memory, more storage that’s fine but the standard config is dual processor with 1GB and 30GB disk space. It’s a debate thats’ set to continue, it’ll be interesting to see how people approach it.

Back to the support activity angle. So IT has supplied ESX 2.5 on the Proliants, we’ve virtualized all the servers we can, the majority of the server estate is virtual and running quite nicely. Moving forward we’ll need to upgrade to ESX 3.0, is that an investment or is it not ‘the cost of doing business’? What do we mean by an upgrade and at what point do we say we need to upgrade the ESX infrastructure, we’ll need to kick off a project. As we move to a service delivery model, a service provisioning one where I sell you an instance, do all these operational things not become an IT cost, a part of the service provisioning business model? I wouldn’t expect to turn up to an Internet cafe and be told “Sorry we need to upgrade our pcs, can we three hours of your time, and £45.50, plus the £3 per hour access fee?”, but then IT is different - I suppose it comes down to the way your business works, are IT supplying a service, an IT infrastructure as a means to enabling your business or are they simply supplying you with IT infrastructure for you to get working for your business.