On-premises cost estimates of Virtualization

Prerequisite – Virtualization and types of virtualization, Characteristics of Virtualization
There are 8 types of on-premises cost estimated of Virtualization as following below:


Figure – On-premises Cost Estimates

  1. Hardware costs –
    Based on the user’s description, the calculator uses estimated market rates to project the costs of requisite physical hardware. The calculator also adds a cost for maintaining the physical hardware to compute the total estimated hardware costs. It includes the cost of all hardware utilized by the system of the user as per their use.

  2. Software costs –
    If the user specifies Windows as an operating system for their environment, then the calculator provides an estimate of the Windows licensing costs based on the number of cores required by the user’s environment. All the softwares and application are comes under this category and cost of their use is calculates as per their use by the user. These softwares sometimes available to use into weekly, monthly, or yearly packages for the convenience of user otherwise its become complex to manage many softwares at per day use.

  3. Electricity costs –
    Estimates the approximate electricity consumption costs. This is done by allocating a power rating to the user’s hardware configuration and then multiplying it with an estimate of the power consumed and an industry standard rate for power consumption.The power consumed by the system and all the peripherals of the system occurs in this category. Its cost is calculated as same cost of electricity of our home. As elecricity is a basic public utility, it is cheaper in comparison to other costs.

  4. Data center costs –
    Based on the user’s description, the calculator estimates the requisite amount of normalized rack space. The calculator then uses an estimated per-unit rack space cost to project the data center cost for the on-premises environment.In this the cost of the data consumed by the various softwares and applications of the system of user is calculated. There is a fixed rate of data for per unit. There are certain data plans are available which can be deploy or employ by the user anytime which provides them flexibility in using the data as per their use.

  5. Networking costs –
    Networking hardware and software costs are estimated to be a fixed percentage of the on-premises hardware and software costs. The calculator also adds a service provider cost based on the outbound bandwidth requirements specified by the user. The costs of network used by the system comes under this category. It is calculated as per the bandwidth used by the system of the user. It provides number of benefits which are:

    • Reduce Costs
    • Efficiencies in in space
    • Faster time to deployment
    • Flexibility
  6. Storage costs –
    The calculator computes storage cost by multiplying an estimated market rate for DAS, SAN, NAS by the amount of disk space specified by the user. In addition to storage, user can estimate current backup and archive volume. It is calculated at some rate per gigabyte, i.e., cost/GB. Any amount of storage can be used by the user. It provide a flexible and scale-able environment which help them to increase or decrease their storage use as per their needs.

  7. IT labor costs –
    Based on the user’s description, the calculator estimates the number of IT administrator man-hours that will be required to maintain the on-premises environment. The cost of all the employees and personnel required for the functioning of system comes under this category.

  8. Virtualization costs –
    If the user’s description includes virtual machines, the calculator uses an industry standard per virtual machine management rate to estimate the total virtualization costs. This cost represents an estimate of the hypervisor costs and virtual machine management software costs for the user’s environment.There are four approaches to calculate the virtualization costs which are:

    • Activity-based costing
    • Tiered pricing
    • Service costs vs infrastructure costs
    • Weighting


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