In-Depth

Virtualization User To Save $50 Million with 300% ROI

So far, so good: $13M saved, 80% ROI

Everybody knows that virtualization saves users big money by eliminating servers and slashing data center costs.

But $50 million in savings over five years with an ROI of 300 percent?

Those eye-popping numbers are admittedly projections, but they are based on the current results being enjoyed by a very large retailer who is not willing to step forward and speak for attribution. However, they have given John Humphreys, senior director, product marketing, Datacenter and Cloud division at Citrix, permission to describe this unique situation for them.

According to Humphreys, this large retailer, which is in the third year of a five-year plan to virtualize over 70 percent of their 10,000 systems, has currently saved over $13 million with a robust ROI of 80 percent. The amount saved to this interim point includes both server refreshes the customer avoided, and power and cooler savings in their data centers. These alone are impressive numbers, and certainly plausible as a progress point on the lucrative road to $50 million.

As Humphreys puts it, the company didn't want to end up in a situation where they would have to build or purchase a new data center. "At some point, they were going to run out of capacity, run out of space and have to make that multi-million-dollar investment," he says.

This is pretty much a straight server virtualization application, and three years ago, it represented a huge win for Citrix over VMware at a time when XenServer was on the rocks. Humphreys says the retailer went with Citrix because they were attracted to the open source nature of Citrix, and because they were also heavy Linux users. "They liked the APIs, the ability to customize, things like that," he says.

Going back to year one of this implementation, the customer wanted to virtualize some 80% of the applications they had based in their primary datacenter. Interestingly, they stood tradition on its head when they chose to bypass a pilot in a low risk environment and start out with XenServer by virtualizing one of their most business-critical applications--their real-time order entry system.

In another stance that is contrary to convention, the customer has not yet articulated a cloud strategy, which makes sense, given their laser focus on consolidation, cost savings, and an agile backup capability based on manageability and keeping operations within their own four walls. "I don't think they've gotten to that point of outsourcing and moving applications or workloads into the cloud," Humphreys notes.

Their backup strategy is based on maintaining high availability via resource pools that consist of server clusters. In that environment, if there's a host failure such as a power outage or a hard drive crash in one of the resource pools, all of the affected virtual machines are automatically restarted on other servers in the resource pool. The customer has also implemented workload balancing, which moves workloads across resource pools when system thresholds for components such as CPU and memory utilization are exceeded.

All things being relative, $50 million in savings might not be something to get excited about at some companies, but Humphreys says that is not the case with this power virtualization user. "Fifty million is a huge number for anybody," Humphreys declares. "They're extremely excited about what they've been doing with virtualization and how it helps not just increase the agility of the IT staff, but what it does to the bottom line as well."

About the Author

Bruce Hoard is the new editor of Virtualization Review. Prior to taking this post, he was founding editor of Network World and spent 20 years as a freelance writer and editor in the IT industry.

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