Server Virtualization Feasibility

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CNT 4603: Project Two Page 2

Project Two: Overview • Title: “Project Two: Server Virtualization Feasibility Analysis” • Points: 100 points • Due Date: Wednesday June 16, 2021 by 11:59 pm (WebCourses time) • Objectives: 1. To practice conducting a financial feasibility (cost/benefit) analysis for a server virtualization project. 2. To prepare an executive summary of the feasibility analysis.

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Project Two: Overview • What you are going to do in this project is pretend that you are the system administrator for an organization that is attempting to determine if virtualization of its computing server infrastructure would be beneficial to the organization from a financial perspective. • As the system administrator you are in charge of conducting the feasibility analysis for the project. • This will include creating financial spreadsheets using a 5-year time-line and writing a brief report summarizing your findings.

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Project Two: Overview • As explained in the notes, a feasibility analysis such as this requires that you be able to compare the way the organization is currently operating with the proposed changes to the operation. • Thus, the first step in the analysis is to completely determine the costs associated with the current operational technique. • For this project, we will restrict the analysis to only a server virtualization project. This means that we need to develop a complete cost picture of the current server infrastructure to compare to a proposed server infrastructure cost. • The next few pages describe the current infrastructure of the organization and this will be followed by a proposed infrastructure. Let’s call the organization: HostPenny (we’re not as big as HostDime!).

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Project Two: The Current Scenario • Currently HostPenny is running 3000 physical servers in its data center which support various applications and several different operating systems. • These servers are configured into four different groups: – Group 1 consists of 1500 mission critical servers. Group 1 servers consume 3500W of power each at full load (100% CPU utilization). The Group 1 servers average load is 15%. – Group 2 consists of 800 mission critical servers. Group 2 servers consume 4500W of power each at full load (100% CPU utilization). The Group 2 servers average load is 22%. – Group 3 consists of 100 non-mission critical in-house application and file servers, each of which consumes 2800W of power at full load. The servers in this group run with an average load of 10% – Group 4 consists of a pool of 600 redundant servers utilized as backup servers. The Group 4 servers are split into two subgroups of 300 servers each, call them Group 4A and Group 4B. Group 4A servers draw 3800W at full load and are used as backups for Group 1 and Group 2 servers. The Group 4B servers draw 3300W at full load and are used as backups for primarily Group 1 and Group 3 servers. Group 4A and 4B servers run at average 1% load.

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Project Two: The Current Scenario • Project Hint #1: • The power consumed by a server is measured in Watts. Power companies charge for power based on kWH (kilowatt-Hours). The Group 1 servers consume 3500W of power at full load. However, they only average a 15% load, so what they actually consume, on average, is 3500W x 0.15 = 525W. A device that consumes 1000W = 1kW for 1 hour will use 1kWH of power. Thus, the Group 1 servers are consuming 525W = 0.525kW, so in 1 hour they will use 0..525kWH of power. Servers run 24/7 so in 1 day, one Group 1 server will use 0.525kWH x 24hr = 12.6kWH of power. There are 1500 servers in Group 1, so collectively they will consume 1500 x 12.6kWH = 18,900kWH of power in 1 day. Our assumption (see page 18) is that the power company is charging 13 cents/kwH, so, running all Group 1 servers for 1 day will cost: 18900kWH x 0.13$/kWH = $2457.00. For year one, the cost to power Group 1 servers will be $2457.00 x 365 = $896,805.00.

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Project Two: The Current Scenario • The server maintenance contracts on the current physical servers are as follows: – Group 1 (3500W) servers: $1500.00/server/year – Group 2 (4500W) servers: $1750.00/server/year – Group 3 (2800W) servers: $1000.00/server/year – Group 4A (3800W) servers: $1100.00/server/year – Group 4B (3300W) servers: $750.00/server/year

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Project Two: The Current Scenario • Project Hint #2: Use a fine grain breakdown of variables in your spreadsheet – do not “lump together” various values. !”#$%#%&$’#()*+ !”#,”%#-“#$%#%&$’#()*+

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Project Two: The Current Scenario • Server administration efforts also vary across the server groups as follows: – Group 1 (3500W) servers: 2.5 administrative weeks/server/year – Group 2 (4500W) servers: 3.5 administrative weeks/server/year – Group 3 (2800W) servers: 1.5 administrative weeks/server/year – Group 4A (3800W) servers: 2 administrative weeks/server/year – Group 4B (3300W) servers: 1 administrative week/server/year

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Project Two: The Current Scenario • Server backup efforts also vary across the server groups as follows: – Group 1 (3500W) servers: these servers are backed-up nightly and require 45 minutes per server. – Group 2 (4500W) servers: these servers are backed-up nightly and require 1 hour per server. – Group 3 (2800W) servers: these servers are backed-up weekly and require 2 hours and 15 minutes per server. – Group 4A (3800W) servers: these servers are backed-up weekly and require 90 minutes per server. – Group 4B (3300W) servers: these servers are backed-up every other week and require 2 hours per server.

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Project Two: The Current Scenario • Project Hint #3: • Be careful with units and time. Some servers are backed-up nightly, others weekly or every other week. Example – Group 1 servers are backed-up nightly requiring 45 minutes/server. Thus, each server in Group 1 requires 365 x 0.75 hours/year of administrative time for backups. Since you are given the time requirement in minutes and administrative time is based on hours, convert backup effort into hours, so 45 minutes = 0.75 hours. Thus, one server in Group 1 requires a total of 273.75 hours of backup time in 1 year. There are 1500 servers in Group 1 so the total time required for backups is 1500 x 273.75 = 410,625 hours. Administrators are paid at the rate of $100.00/hour, so the cost of backing up Group 1 servers for year 1 of the study is 410,625 x 100 = $41,062,500.00 • Servers that are backed-up weekly require only 52 backups/year. Similarly, those which are backed-up every other week will require only 27 backups/year.

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Project Two: The Current Scenario • HostPenny currently employs an external security firm to run routine security audits on the mission critical servers (Groups 1 and 2). This occurs once a month and the charge is $4500.00. The current contract with this firm guarantees this price through the duration of this study. • HostPenny currently employs a data storage company to maintain archival backup copies of server backups. The charge for this service is billed monthly and is based on the data volume stored each month. The bill last month was $6500.00. Based on the data volume trend produced by HostPenny, it is expected that the next billing level plateau will be achieved at the start of year 3 of the study when the monthly cost will rise to $10,000.00/month. This rate is expected to remain the same throughout the duration of the study. .,#)’$-/0#.11″2-$,3#%”#$,-4’%2*#’”421/’5#%&/#)6/2)3/#1″‘%#”7#’%”2$,3#89:#”7#7$;/#-)%)#$’#1422/,%;*# 8?@@A*/)2#B)C”4%#(“4;-#C/#1″22/1%#7″2#),#”23),$J)%$”,#(&$1&#$’#)21&$6$,3#)C”4%#DK#9:AF”,%&?

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Project Two: The Proposed Scenario • The virtualization project proposed for the HostPenny would reduce its total current number of physical servers from 3000 to 310 (an overall 9.67:1 physical consolidation ratio). The proposed reduction in physical servers and the resulting number of virtual servers per server group will be based on the following table: • Sun Server X8-8 servers have been selected to host the virtualized environments. This is one of Sun’s latest and leading edge x86 servers. This is a 5-rack unit (5U) server that supports installations of 24 cores/socket. Up to 6TB of memory is available.

Group
Number
of New
Physical
Servers
Physical
Server
Consolidation
Ratio
Number
of
Virtual
Servers
Total Number of
Servers in
Group (physical
+ virtual)
Number of
servers lost from
current scenario
Overall
Consolidation
Ratio
1 150 10:1 500 650 850 2.3:1
2 100 8:1 400 500 300 1.6:1
3 10 10:1 40 50 50 2:1
4 50 12:1 200 250 350 2.4:1
Total 310 9.67:1 1140 1450 1550 2.075:1

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Project Two: The Proposed Scenario • Project Hint #4: • Note that in our proposed scenario some of the original servers are actually lost in the virtualization scenario. For example, the Group 1 servers are reduced from 1500 physical servers to 150 physical servers (a consolidation ration of 10:1). The original 1500 servers are replaced with 150 new physical servers and these new physical servers will support a total of 500 virtual servers. In this case, we lost 850 of the original servers. Similarly, in Group 3 the physical servers are reduced from 100 to 10 (also a consolidation ratio of 10:1) and the new 10 physical servers are supporting 40 virtual servers. In this case, we lost 50 of the original servers. • Although it isn’t really important to us in this study, the most likely scenario, for Group 1, is that the tasks/applications/functionality of the original 1500 servers will be distributed across the 500 virtual servers, and the 150 new physical servers will only be tasked with supporting the virtual machines and probably will have no other functionality assigned to them in the proposed scenario. • Due to the efficiency of the new servers and the virtualization of others, we can afford to reduce the total number of servers. Notice that the overall group consolidation ratios are all less than 3:1, with the mission critical consolidation ratios around 2:1. • The next page will let you know how to specify the configuration of the new physical servers that HostPenny will be purchasing for this proposed project.

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Project Two: The Proposed Scenario • Information on the X8-8 model specifically can be found at: https://www.oracle.com/servers/x86 • Use the configurations shown below: • !”#$%&&#” ‘ ()*%+ ,%#) -./- .012345 .6 $#”%5 .789 • :!;& ‘ – • ?/62@ A(• ?C.2@ A(• ?D/2@ A(• 3E”F AG&H A”GI%& ‘ )#)% • J#+GF J*E*% A”GI%& ‘ – JJA& • !:(KLMN”%&& :E”F ‘D/ !:(% :E”F& • 9#”H+#EF ‘ -8O P#” 2″#QND E)F /7O P#” 2″#QN . L2″4I#8#),-#L2″4I#D#M/26/2#1″,7$342)%$”,’ L2″4I#=#),-#N#1″,7$342)%$”,’ • !”#$%&&#” ‘ ()*%+ ,%#) 8.D- .0C2345 D/ $#”%5 D.89 • :!;& ‘ 6 • ?/62@ A(• ?C. 2@ A(• ?D/2@ A(• 3E”F AG&H A”GI%& ‘ )#)% • J#+GF J*E*% A”GI%& ‘ 6 JJA& • !:(KLMN”%&& :E”F ‘ – !:(% :E”F& • 9#”H+#EF ‘ R8O P#” 2″#QN C E)F 87O P#” 2″#QN 6 M4,#M/26/2#OEPE Q’/#%&/’/#-$77/2/,%#1″,7$342)%$”,# ‘/%%$,3’#%”#-/%/2F$,/#%&/#I”(/2#4’)3/# 7″2#/)1&#”7#%&/#’/26/2’#$,#*”42#,/(# ‘/26/2#32″4I’

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Project Two: The Proposed Scenario • To determine the cost of the new servers go to the following page: https://shop.oracle.com/apex/f?p=dstore:5:11553073189555::NO::P5_PROD_ HIER_ID,P5_LPI:128046541231961668974184,12804654011235166885718 5: (See Configurations). • Note that this cost calculator is actually for the Fujitsu SPARC M12-2 server, which is different than the X8-8 servers that we configured for the power. While this configuration is not exactly the same as that which we configured for the power calculator, its pretty close and will give us an accurate enough value for inclusion in our analysis. • Use the “Small” configuration for the Group 3 and 4 servers and the “Large” configuration for Group 1 and 2 servers. Use this as the price for your new servers. Also note the price for the first year of Oracle’s Premier level support for this system and use this price as the first year price for the maintenance contract on each server. (Note that these prices are 12% of the server cost.)

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Project Two: The Proposed Scenario • The virtualization software of choice will be VMware (we’ll use VMware vSphere) and this will cost $6500/physical server. The yearly maintenance contract on this software will be priced at 15% of the original cost and will remain in effect at this rate for the duration of the study. • Its estimated that all new servers (both physical and virtual) will require 10 weeks/server/year of administrative effort. Groups 1, 2, and 3 will require a backup effort assumed to be 90 min/physical server/day. Group 4 servers will require 120 min/physical server/week. • Training employees on the new virtualized systems will require a time expenditure equivalent to $5500/year/employee trained on the system. In years 1 and 2 of the study four employees will be trained and in all subsequent years of the study two employees will be trained per year.

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Project Two: The Proposed Scenario • Project Hint #5: • Physical servers require backups, virtual servers do not. A virtual server resides on the physical server simply as files, so in backing up the physical server, the virtual servers residing on that physical server are also backed up. • Both physical and virtual servers require administrative efforts. The difference (see page 19) is that the administrative cost/effort on a virtual machine is assumed to be only 65% of the administrative cost/effort on a physical machine. For example, if a physical server requires 10 hours of administrative effort/week, then the cost for that would be 10 hours x $100.00/hour = $1000.00. If that physical server hosted 4 virtual machines that also each required 10 hours of administrative cost/effort/week, then the cost for administering the virtual machines would be (4 x 10 hours x $100.00/hour) * 0.65 = $2600.00. Thus the total administrative cost/effort on that one physical server in 1 week would be $1000.00 + $2600.00 = $3600.00.

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Project Two – Common Elements • Some basic assumptions, which are common to both the current and proposed scenarios, about HostPenny as it pertains to your feasibility analysis: – The cost of 1kwH of power is currently 13 cents. Assume that the cost of power will increase 2%/year over the duration of the study. – When calculating power costs for the new servers, note that the loading of each server was already factored into the value produced by the power calculator. – Assume that server maintenance costs will increase 3%/year over the duration of the study for all server maintenance agreements.. – The outside service contracts for security and storage will continue in the proposed scenario just as they were calculated in the current scenario. – Assume that administrative costs on a virtual server are 65% of the administrative costs on a physical server. – An administrative day is 10 hours. A server day is 24 hours.. There are 365 days in all years. An administrative week is 7 days. – Administrative costs are currently $100/administrative hour. Assume that administrative costs will increase at the rate of 2%/year over the duration of the study.

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Project Two: Your Task • Your first task for this project is to construct spreadsheets like the ones we discussed in class that will illustrate the current and proposed infrastructure costs for the HostPenny given this proposed virtualization project. • You should create (1) a variables spreadsheet(s) that includes all the variables defined in the project, (2) a current infrastructure cost spreadsheet, (3) a virtualization projected cost spreadsheet, and (4) a summary spreadsheet that highlights the major costs and benefits of the project. !”#$%&'(&)*)*)* !”# $#%& ‘()*&) +”#( %,()*-%.))& #%/01 2*(/*34)% &” /-)0&/5+ &.) 2*(/”#% ‘”%&% &.*& *() 3)/01 &(*’6)-7 80 “&.)( 9″(-%: -“0;& .*(- ‘”-) *0+ 0#$3)(% /0&” &.) 5″($#4*% /0 +”#( %,()*-%.))&%7 %,()*-%.))& 9.)() 8 -)5/0)- &.) 2*(/*34)% #%)- /0 ‘#(()0& ‘”%& %,()*-%.))&%7 !”# $#%& /0’4#-) * %/$/4*( ,*1)=%> /0 +”#( %,()*-%.))&7 ?);44 ‘”2)( &./% /0 &.) @AB %)%%/”0%7

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Project Two: Your Task • Once your spreadsheets are completed, you’ll construct a 1 page executive summary report of your findings for the COO of HostPenny. • This report should address the feasibility of the proposed project and its financial impact on the HostPenny organization. • Normally, an executive summary summarizes a more complete accompanying report. You will not be preparing this more complete report in this case, you will only be preparing the executive summary. • If you have never prepared an executive summary before (if you did project 1, you’ve have now done so), the following links might be useful: http://en.wikipedia.org/wiki/Executive_summary http://libguides.wpi.edu/c.php?g=355392&p=2396307 http://writing.colostate.edu/guides/documents/execsum/

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Project Two: Your Task • Note that an executive summary is different from an abstract. • Abstracts tend to be most common in academic environments whereas executive summaries are primarily confined to business environments. • An abstract is a brief summarizing statement which is read by people who are trying to decide whether or not to read the entire document. • An executive summary is the document in miniature which can be read in place of the longer document.

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Project Two: Deliverables • On or before 11:59 pm (WebCourses time) Wednesday June 16, 2021 submit the following items via WebCourses: 1. A spreadsheet (similar to that we developed in the notes) with worksheets containing variable definitions, current cost infrastructure, proposed project cost infrastructure, and a summary worksheet. Use the spreadsheet template on WebCourses as the starting point for your project. 2. A one page executive summary of your findings with respect to the feasibility of this project for the HostPenny organization. This executive summary should give an extremely brief overview of the proposed project, a summary of your findings (spreadsheet analysis results), and a recommendation of whether the project should move forward or not.