VMware releases Cost Per Application Calculator

March 23rd, 2009 by jason Leave a reply »

On Monday morning 8am EDT, VMware will have released their Cost Per Application Calculator.  The tool was designed to accurately estimate and compare acquisition cost of a virtualization solution.  VMware has labeled this metric Cost Per Application.  Many market analysts, competitors, and potential customers have been focusing on the sheer cost of purchasing VMware licensing and support without performing the time consuming analysis that would reflect VMware’s complete cost effectiveness.  This calculator was designed to address that.  Goals outlined for the calculator included:

  • Simlified yet accurate metric to evaluate upfront costs only
  • Focus on easily quantifiable cost items that can be entered into the calculator, not indirect savings coming from things like improved productivity or operational efficiency
  • Present a cost comparison between VMware and competitor products using cost per application

VMware’s calculation for Cost Per Application is:

  • Virtualization software
    • Licenses for virtualization software


  • Hardware
    • Servers
    • Networking
    • Storage
    • Electricity
    • Datacenter space


  • VM Guest OS
    • Licenses for virtual machine operating systems


  • Management
    • Management software
    • Management servers and other infrastructure cost
    • Database software and servers


  • Number of Apps Virtualized


  • $$ Cost Per Application $$

Note, the Cost Per Application Calculator is not meant to be a replacement of VMware’s TCO and ROI Calculator which is always the optimal methodology to evaluate a software invstment with a complete cost/savings analysis.  VMware’s TCO and ROI Calculator accounts for more items such as multi year views, depreciation, and amortization which the Cost Per Application Calculator does not .


No comments

  1. Sean Clark says:

    This is nice info and simple. I ran the numbers for a small install – 10 apps but on the small end, it doesn’t immediately look as favorable for VMware. I can imagine VMware competitors will use this as an opportunity to only focus on the cost of Enterprise vs Hyper-V/Xen to scare unwitting SMB customers into choosing the free puppy (*Xen/Hyper-V).

    But I guess the nice thing about this calculator is that it ties one hand behind VMware’s back and buyers can see how well they compete with only 1/3 of the story. If the Enterprise software cost seems daunting, then VMware can lay the rest of the cards on the table: large HCL, huge ecosystem of partner software vendors, the best online community of users in the world, long history of success, road map of new features, lower TCO and the “it just works” factor. Then the enterprise cost just becomes a drop in the bucket and buyers probably sing a new tune after the 1-2 punch.

  2. Alberto Farronato says:


    does it really make sense to compare Enterprise Edition to Hyper-V on a 10 VMs scenario? Most likely you won’t need more than 1 or 2 servers to run 10 VMs Enterprise is overkill in this scenario. Most customers interested in virtualizating only 10 VMs will probably use VI 3 Standard or Foundation Edition and get all they need.

    With Standard and 10 VMs VI 3 comes out about 5% lower cost per app than Hyper-V…

  3. Sean Clark says:

    Yes, it makes sense to compare Enterprise Edition to Hyper-V in a 10 VM scenario. Because of the intangibles I mentioned in my 2nd paragraph. Enterprise will pay for itself over the lifetime of the solution in reduced costs associated with Updating the infrastructure. HA will also pay for itself the first time a server fails and the IT manager is on vacation. And I would never recommend a single server for a 10 VM solution, unless the customer with completely comfortable with all the risks.

    We have quite a few installations of <10 VMs that are using VI3 Enterprise for the reasons I stated above. The ones that did chose Enterprise for their smaller installations made the decision based on long term savings and features, rather than upfront cost alone.

    One thing I have done with the smaller businesses or schools is design solutions with 2 servers that only have 1 socket populated. This way the customer can get the benefits of Enterprise, without having to over-buy their licensing. That being said we have a ton of customers that chose to go with VMware Foundation and local storage. They are fairly happy, but updating their environments is always a pain and knock on vWood, they haven’t had a server fail yet.

    Best solution for someone wanting Enterprise availability for 10 VMs, is actually to purchase VMs from your local VMware as a Service (dare I say Cloud?) Provider. Time to cut this short, turn this into my own blog post. Nah – too lazy. We’ll provide Jason with more juicy content to help him purchase his next latte with. 🙂