TCO and ROI Analysis of SAP Landscapes using VMware...

TCO and ROI Analysis of SAP

Landscapes using VMware

Technology

TCO and ROI Analysis of SAP Landscapes using

VMware Technology

Version 1, September 2009

Contents

1 Executive Summary ............................................................................... 1

2 Introduction ........................................................................................... 3

3 Overview of the TCO/ROI Methodology ................................................5

3.1 The Four TCO Categories ................................................................................ 5

3.1.1 Downtime .............................................................................................................. 6

3.1.2 Operation .............................................................................................................. 6

3.1.3 Administration ....................................................................................................... 7

3.1.4 Hardware and Software ......................................................................................... 7

3.2 Direct and Indirect Costs ................................................................................. 7

4 TCO Calculation and Improvements for Virtualized SAP Systems ....... 8

4.1 TCO Calculation for SAP Data Center Server Hardware .................................. 8

4.1.1 Requirements and Sizing for New and Reused Hardware....................................... 9

4.1.2 Methodology for Calculation of Hardware Requirements ...................................... 9

4.1.3 Productivity Improvement with New Hardware ................................................... 10

4.2 SAP Data Center Storage .............................................................................. 11

4.2.1 TCO Calculation for Data Center Server Storage ................................................. 11

4.2.2 Calculation of Storage Requirements................................................................... 12

4.2.3 Storage Productivity Improvement ...................................................................... 12

4.3 SAP Data Center Networking ........................................................................ 12

4.3.1 TCO Calculation for Data Center Networking ...................................................... 13

4.3.2 Methodology for the Calculation of Network Requirements ................................ 13

4.3.3 Productivity Improvement due to Network Virtualization.................................... 13

4.4 Data Center Server Space .............................................................................. 13

4.5 Data Center Power and Cooling .................................................................... 14

4.5.1 TCO Calculation for Data Center Power and Cooling ........................................... 14

4.5.2 Calculation of Power and Cooling Requirements ................................................. 15

4.5.3 Productivity Improvement ................................................................................... 15

4.6 SAP Data Center Provisioning ....................................................................... 16

4.6.1 TCO Calculation for Server and Software Provisioning ........................................ 16

4.6.2 Methodology for the Calculation of Provisioning Savings .................................... 16

4.6.3 SAP Deployment Provisioning Improvement ....................................................... 16

4.7 SAP Data Center Server Administrative Costs ............................................... 17

4.7.1 TCO Calculation for SAP Administrative Costs..................................................... 18

4.7.2 Methodology for the Calculation of SAP Administrative Costs ............................ 18

4.7.3 Improvement ....................................................................................................... 18

4.8 Reduced Business Risk................................................................................... 19

4.8.1 TCO Calculation for Business Risk ........................................................................ 19

4.8.2 Methodology for the Calculation of Business Risk ................................................ 19

4.8.3 Improvements ..................................................................................................... 20

4.9 SAP Clustering ............................................................................................... 20

4.9.1 TCO Calculation for SAP Clustering ..................................................................... 20

4.9.2 Methodology for the Calculation of SAP High Availability ................................... 21

4.9.3 Improvement ....................................................................................................... 21

4.10 SAP and VMware Server Load Balancing....................................................... 21

4.10.1 TCO Calculation for Load Balancing ..................................................................... 22

4.10.2 Improvement ....................................................................................................... 22

4.11 SAP Installation and Upgrades ...................................................................... 22

4.11.1 SAP Installation ................................................................................................... 22

4.11.2 SAP Downtime Minimized Upgrade Method ....................................................... 23

4.11.3 SAP Resource Minimized Upgrade Method ......................................................... 23

4.11.4 Building Up an SAP Landscape ............................................................................ 23

4.12 SAP Software and Hardware Maintenance.................................................... 23

4.12.1 SAP Support Packages......................................................................................... 24

4.12.2 SAP Kernel Patches ............................................................................................. 25

4.12.3 Industry-Standard (x86) Hardware Maintenance ................................................. 25

4.12.4 Non-Industry Standard Hardware and Software Contracts .................................. 25

4.12.5 SAP Enhancement Packages ............................................................................... 25

4.12.6 TCO Calculation for SAP Maintenance ................................................................. 26

4.12.7 Improvement ....................................................................................................... 26

4.13 SAP Planned Downtime ................................................................................ 26

4.13.1 Methodology for the Calculation of SAP Planned Downtime ............................... 27

4.13.2 TCO Calculation for SAP Planned Downtime ....................................................... 27

4.13.3 Improvement ....................................................................................................... 27

5 VMware Infrastructure investment ..................................................... 28

5.1 VMware Infrastructure Licensing ................................................................... 28

5.2 VMware Infrastructure Training..................................................................... 28

5.3 VMware Virtualized SAP Environment Design and Planning ......................... 29

5.4 Heterogeneous or Homogenous SAP Migration Costs .................................. 29

6 Investment for SAP Physical to Virtual Migration ............................... 31

6.1 System Copy Categories ............................................................................... 31

6.1.1 SAP Heterogeneous System Copy ....................................................................... 31

6.1.2 SAP Homogenous System Copy .......................................................................... 31

6.2 Physical to Virtual Migration ......................................................................... 31

6.2.1 VMware Converter ............................................................................................... 31

6.2.2 Customer P2V SAP Migration Costs ..................................................................... 32

7 Use Case Scenarios Before and After Virtualization ............................ 33

7.1 SAP Solution Architecture ............................................................................. 33

7.2 Customer SAP Solution-Based Landscapes ................................................... 34

7.2.1 SAP Landscapes Before Virtualization ................................................................. 34

7.2.2 SAP Landscapes After Virtualization.................................................................... 36

7.2.3 Annual Hardware and Software Cost Savings ...................................................... 38

7.2.4 Annual A/C and Power Savings ............................................................................ 38

7.2.5 Annual Cooling Costs for SAP Servers .................................................................. 39

7.3 Deploying an SAP Solution with VMware Templates .................................... 39

7.3.1 Cost of Deploying a Solution Before Virtualization .............................................. 39

7.3.2 Cost of Deploying a Solution After Virtualization ................................................. 40

7.4 High Availability and Clustering ..................................................................... 41

7.4.1 SAP Database ...................................................................................................... 42

7.4.2 SAP Message and Enqueue Service ..................................................................... 42

7.4.3 HA and Clustering Before Virtualization............................................................... 43

7.4.4 HA and Clustering After Virtualization ................................................................. 44

7.4.5 Summary of SAP clustering and VMware high availability ................................... 45

7.5 SAP Front End Client Systems ....................................................................... 45

7.5.1 Client Systems Before Virtualization .................................................................... 45

7.5.2 Capital Investment in VMware VDI ...................................................................... 46

7.5.3 Client Systems After Virtualization ...................................................................... 47

7.6 SAP Upgrades and Patches ........................................................................... 47

7.6.1 Upgrades and Patches Before Virtualization ........................................................ 48

7.6.2 Upgrades and Patches After Virtualization .......................................................... 49

8 TCO Reduction: Three Case Studies .................................................... 51

8.1 TCO and ROI Summary for Customer 1 ......................................................... 51

8.2 TCO and ROI Summary for Customer 2 ......................................................... 53

8.3 TCO and ROI Summary for Customer 3 without VMware VDI ....................... 55

8.4 TCO and ROI Summary for Customer 3 with VMware VDI ............................. 57

8.5 Customer 1 TCO /ROI Summary with Planned Downtime Costs.................... 59

8.6 Customer 2 TCO /ROI Summary with Planned Downtime Costs ................... 61

8.7 Customer 3 TCO /ROI Summary with Planned Downtime Costs ................... 63

8.8 Customer 3 TCO /ROI Summary with Planned Downtime Costs and VMware

VDI ...................................................................................................................... 65

9 Virtualizing Large Enterprise Applications with VMware vSphere ...... 67

TCO and ROI of SAP Landscapes Using VMware Technology White Paper

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1 Executive Summary This study examines how VMware software reduces total cost of ownership (TCO) for SAP

landscapes. It focuses on three German reference customers, representing three different

industry sectors with different numbers of concurrent SAP users.

SAP Customer Descriptions Customer Industry sector Implementation Scenario Concurrent SAP Users

1 Automotive Heterogeneous SAP migration from a

mainframe to x86

400

2 Pharmaceutical Heterogeneous SAP migration from a

UNIX Cluster/Oracle to x86 hardware

200

3 Government Homogeneous SAP migration from X86 physical servers into virtual with

VMware Converter

100

Source: VMware partner AddOn

These customers have virtualized their entire SAP infrastructure together with the associated

databases. Some of the data was collected during the project phase using in-house

questionnaires. All three customers run productive SAP systems on VMware® Infrastructure 3.

The projects have been finalized to the customers’ complete satisfaction. The detailed results

for a three-year calculation before and after the SAP landscape virtualization have been

combined and can be found in the appropriate chapters following.

The following tables summarize the TCO and return on investment (ROI) calculations for the

three companies based on their successful migration from physical SAP environments to VMware infrastructure. All pre-defined customer objectives have been fully achieved.

The cost savings for SAP planned downtime is based on an estimate of $120,000 US per hour,

which can vary in different use cases. The contribution to the TCO in this study is weighted at 30

percent. The planned downtime reduction is achieved with the use of VMware VMotion and the

simplification of building clusters.

Please note that all monetary amounts in this document are expressed in $US.

TCO Savings with VMware Virtualization Customer Total costs

without

VMware Infrastructure*

Total costs with

VMware

Infrastructure

Savings TCO in %

Customer 1** $1,991,280 $372,321 $1,618,962 81

Customer 2 $ 772,131 $131,628 $ 640,503 83

Customer 3*** $ 252,765 $128,546 $ 124,219 49

Customer 3**** $ 399,165 $240,646 $ 158,519 40

* Reference prices based on customer information and quotes for pre-virtualization

environment

** Value for simplified SAP Upgrade is included

***Value for VMware VDI is not included

****Value for VMware VDI is included


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TCO savings with VMware Virtualization Including Costs of Planned Downtime * Customer Total costs

without

VMware**

Total costs with

VMware

Savings TCO in %

Customer 1*** $ 5,447,283 $2,100,321 $3,346,962 61

Customer 2 $ 4,228,131 $1,859,628 $2,368,503 56

Customer 3**** $10,188,765 $5,312,546 $4,876,219 48

Customer 3***** $10,335,165 $5,424,646 $4,910,519 48

*Achieved through VMotion and simpler cluster build

**Reference prices based on customer information and quotes for pre-virtualization environment

*** Includes value for simplified SAP Upgrade

****Value for VMware VDI is not included

*****Value for VMware VDI is included

Customers 1 and 2 used UNIX and mainframe hardware before moving to virtualizing on

industry-standard x86 systems.

Customer 3 used x86 systems before and after virtualization. For most medium-sized business

customers this example fits best.

Break even for all three customers was between one and six months.

Customer Objectives for SAP Virtualization with VMware Customer Objectives Achieved

Customer 1 • Reduction of hardware costs

• Reduction of hardware and software maintenance costs

Yes

Customer 2 • Reduction of hardware costs

• Reduction of hardware maintenance costs

• Reduction of cluster costs

Yes

Customer 3 • Reduction of cluster software and maintenance

• Reduction of external consultant know-how requirements

Yes

Source: customers

Replacing expensive mainframe and UNIX systems with x86 and VMware virtualization

technology reduces costs significantly1. Furthermore, customers achieve more flexibility and

higher availability with all their SAP systems as well as simplified maintenance operations.

This study looks at the first three years after virtualization. Once the SAP solutions have been

virtualized and encapsulated in virtual machines, further projects such as a technology refresh

(migration to faster hardware and storage) become much easier. Moreover, external consultant

costs can also be reduced.

1 All customers had shared storage infrastructure in place prior to virtualization. As a result, the

virtualization projects did not introduce additional costs in that area.


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2 Introduction This document provides a detailed overview of how three organizations use VMware

virtualization technology to reduce TCO and increase ROI for their SAP solutions.

TCO is usually several times higher than merely the procurement costs. In addition to license

costs for software, it is also necessary to consider hardware costs, maintenance fees, personnel

costs for implementation and operation, and expenses for user training and licenses. The

calculation of the total cost of ownership provides important information for planning and

implementing projects and consolidating system landscapes, (defined as optimally combining components from different scenarios and integrating them on one physical server, as far as

possible). Increasing cost pressures for companies make it necessary to merge systems, data,

applications, and access to programs, and thereby achieve corresponding savings. There are

various models for calculating TCO, including those devised by analyst firms Gartner Group and

Alinean, each of which takes different costs into account.

The common goal of all TCO models is to split the total costs into blocks to identify the cost

drivers within the system landscape. In this study, together with three customers with different

user requirements from different industry sectors, we have analyzed TCO and ROI using the

VMware/Alinean model. For SAP landscapes several adjustments were necessary. In addition,

SAP aspects like clustering, deployment and patch scenarios enhance this model.

Several other TCO/ROI methodologies for VMware are available, but no single one covers the

specific requirements and approaches for mission-critical Enterprise Resource Planning (ERP)

applications such as SAP. Nearly all enterprise core business processes can be represented by

this software.

SAP software is complex, with many dependencies related to customer needs. High availability,

flexibility, scalability and reliability are key requirements for its users. Before SAP solutions can

be used, many customizations are required. SAP is a multi-user environment, where 500 or more users can work simultaneously in the same system. Different operating systems and

database platforms are supported by SAP, including UNIX, Windows, and Linux. (In conjunction

with VMware, however, only Windows and Linux operating systems are supported.) These

conditions make it necessary to adhere carefully to specific requirements when installing,

supporting, maintaining and upgrading an SAP landscape.

To understand the benefits of running SAP solutions on VMware virtualization technology and

the resulting calculation and measurement methods for the TCO/ROI study, this paper explains

technical issues, procedures and best practices for running SAP solutions successfully in a

virtualized environment. Following these procedures will result in customer cost savings.

To summarize: • This document describes a number of different areas where customers can save time and reduce

costs by running SAP solutions on VMware virtualization platforms.

• Another topic is the performance improvement observed after virtualization. For example, background jobs run 40 percent faster than they did on the older hardware.


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This TCO/ROI study was validated together with our partner AddOn, which hosts the SAP

Virtualization Competence Center in Europe. The study analyzes three different projects

planned and implemented by this partner.

The intention of this paper is to help organizations quantify the current “before VMware” cost

of ownership for SAP solutions-based landscapes. The study shows the “after VMware”

scenario, quantifying the cost savings and the initial investments to set up and deploy the

virtualized SAP data center.

The methodology uses proven financial techniques, industry research, VMware field and customer data and user-provided metrics to quantify the values. The TCO/ROI analysis formula

subtracts the “after VMware” scenario from the “before VMware” scenario to document the

change in TCO and other benefits from the VMware solution over a three-year period.

The ROI analysis formula compares the savings with the incremental investments as a

percentage to illustrate the ratio of returns versus investment (ROI = Total Cumulative Savings /

Total Cumulative Investments).


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3 Overview of the TCO/ROI Methodology SAP recommends securing the productive SAP ERP system (PRD) with one or two additional

systems in front called Development (DEV) and Quality Assurance (QAS).

Furthermore, all other SAP solutions such as SAP Enterprise Portals, SAP Exchange

Infrastructure Systems and SAP Business Warehouse (Business Intelligence) should be handled

in the same way. The collection of three independent systems for each SAP solution is called an

SAP landscape.

The customers in this study, regardless of the number of users working concurrently, have

followed this recommendation. As a result, these customers have to manage several servers

with different requirements and high availability criteria.

For all three reference customers in this study, physical DEV and QAS systems were under-

utilized in terms of CPU and memory consumption.

One way to reduce the total costs of servers is to improve asset utilization through workload

consolidation. Over a 24-hour period, we have seen utilization of DEV and QAS systems at less

than 20 percent of x86 and other hosts (UNIX, mainframe) computing capacity. One of the

reference customers has a worldwide presence and, as a result, some of its systems have no idle

periods. Nevertheless, the customer is not an exception to the rule: most of its physical systems

are under-utilized.

Using these utilization values we can consolidate SAP DEV and QAS systems with a ratio of 4 or

5 to 1. This means that five SAP systems can be hosted on one well-sized VMware ESX host

server. The number of virtual machines that can be hosted on one ESX host server is always

dependent on the underlying physical hardware. The SAP PRD system is in all three customer

cases a mission-critical enterprise solution. SAP defines some prerequisites for such systems:

• The SAP release must be supported, together with the VMware software

• The resources of SAP virtual machines should not be over-committed.

In this study, all calculation parameters for hardware and software vendors are anonymous.

This allows a better comparison among the three analyzed project implementations, focusing on the VMware benefits and features for SAP Landscapes.

3.1 The Four TCO Categories

For our SAP / VMware study, we have chosen the Alinean/Gartner model with adapted

contribution values for SAP implementations. This best reflects the “Cost of Operation” of an

SAP solution. Costs are divided into four major categories. The following table shows the four

cost categories and their contribution to the TCO.


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Cost Category Contribution to TCO SAP Application Activities Downtime 30% Planned and unplanned downtime

Users affected

Operation 40% SAP maintenance

Support

Deployment

Maintenance Process and planning

Upgrades

Energy consumption

Administration 10% Asset management

Firmware upgrades

Procurement

Training (IS, end-user)

Hardware, software 20% Hardware, software Additional management software

Supplies

Cost categories and their contribution to TCO

Source: Kagermann, Henning Prof. – SAP Press book SAP-Solutions

3.1.1 Downtime

Controlling and reducing the downtime of a dedicated SAP system is a critical success factor in

an enterprise. External consultants work in DEV systems, while most of the SAP application

users work in the productive SAP system. In the event of massive failure or disaster, hundreds

of SAP users are unable to read and write business data from the ERP system. One of our

reference customers operates in the automotive sector. He told us that in the event of an

unavailable SAP system, supply trucks would not be able to deliver or charge parts. The whole logistics department would come to a standstill. There are many examples of the business need

for high application availability; without it, the business loses money.

Downtime can be due to a user waiting for a service desk problem to be resolved, to planned

maintenance, or to unplanned failures (e.g. network outage, database outage, application

outage, etc.).

3.1.2 Operation

Day-to-day operation of an SAP system requires a great deal of attention. The architecture of

an SAP system consists of: • Operating system

• Database

• SAP software release

• Additional SAP servers for the dialog instance

Each component must be integrated and monitored separately with system management

software. SAP has an integrated Computer Center Management System (CCMS), but it only

allows control and monitoring of an individual SAP system itself. Commonly, complex business

processes are spanned over other application solutions as well. There is a need for additional

system management software to take precedence and control over all business system

members.


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Operational elements comprise the technical staff resources including in-house staff,

contractors, and outsourced management and support contracts. Included in this accounting

are costs by operation subcategory (Technical Services, Planning and Process Management,

Database Management and Administration, and Service Desk) and, for actual data collection,

expense responsibility (Corporate IS, Business Unit IS).

To help in evaluating this cost we have obtained global values from IS management and have

evaluated management time surveys.

3.1.3 Administration

Sometimes SAP administration interferes with SAP operation. However, we focused on asset

management, firmware and hardware upgrades, procurement and training (for both IT staff

and end-users).

3.1.4 Hardware and Software

SAP places very restricted requirements on hardware for different SAP solutions. For a

productive use of SAP systems on virtualized hardware, SAP supports the virtualization

solutions VMware® ESX™ version 3.x. SAP exclusively supports 64-bit Windows as the

operating system for virtual machines on AMD and Intel processors. On these operating system versions, all SAP applications (based on SAP NetWeaver Application Server ABAP and Java)

that are supported on physical hardware are also supported on virtualized hardware.

3.2 Direct and Indirect Costs

Besides the classification into categories, we have split the calculation of costs into • direct (budgeted) costs

• indirect (unbudgeted) costs

Direct (budgeted) costs are the capital, fees, and labor costs spent by the corporate IT

department and business unit IS groups for delivering information technology services and

solutions to the organization and users. Direct costs capture actual costs for all direct expenses

related to clients (mobile and desktop), servers, peripherals, and the network in the distributed

computing environment.

Indirect (unbudgeted) costs measure the efficiency of IT in delivering expected services to

end-users. If IT management and solutions are efficient, users are less likely to be burdened

with self- and peer support as well as downtime. If IT management and solutions are inefficient,

users typically must spend more time supporting themselves and each other (self- and peer

support) and are affected by more downtime.

Indirect costs by definition cannot be measured directly and there is not always a direct causal

relationship. But efficient IT spending can have a direct positive impact on end-user productivity. On the other hand, inefficient spending or cuts can cost an organization more

because of lost productivity.

A very good example of indirect costs is energy costs. All three reference customers handle

power for the SAP server as global costs.


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4 TCO Calculation and Improvements for Virtualized SAP Systems

4.1 TCO Calculation for SAP Data Center Server Hardware

SAP data center server workloads can be consolidated with virtualization. Customers generally

achieve a consolidation ratio for SAP development, quality assurance, training, and demo

systems of between 4:1 and 5:1, depending on hardware.

In mission-critical SAP environments, customers typically use a dedicated VMware ESX

instance for the SAP production system, because SAP strongly advises against over-

commitment of system resources for production environments.

Prices used in this study are based on systems with two-core and four-core sockets from Intel

and AMD. After consolidation, unneeded system hardware can be reused or reallocated to

other applications and future server purchases can be delayed or avoided.

The following table shows x86 hardware prices only:

Annual Costs of Certified Servers for SAP Systems* CPU Capacity (Socket) Annual Server Cost

1 CPU $ 5,000

2 CPU $ 7,500

4 CPU $17,300

8 CPU $33,000

16 CPU $45,000

32 CPU $77,000

*Source: Internal customer information. Prices include chassis, CPUs, 32 GB RAM, and two

local disks. Network and SAN are tallied separately.

Within this document, when we refer to reuse of an application server we mean reuse as a

VMware ESX host, because most of the reusable SAP servers are certified for VMware ESX as

well. This is an important factor in the TCO/ROI calculation and lowers the cost for purchasing

ESX host systems. All three reference customers described here have purchased new multi-core

server equipment for VMware ESX version 3.5.

To calculate servers for both the “As Is” and “Projected” environments, the consolidation

savings are considered over the entire analysis period. We have examined the amortized server

capital cost and the annual support and maintenance contract costs for the current installed

base, as well as costs for the consolidated environment.

For the TCO data center hardware calculation we have used the formula:

Annual SAP hardware and software savings = Total servers * (cost per server) As Is – Total

servers with VMware ESX * (cost per server/useful life) Projected

Useful life in SAP hardware cycles = 3 years.


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4.1.1 Requirements and Sizing for New and Reused Hardware

Reducing the number of physical servers definitely has a positive impact on the TCO

calculation, but the virtualized SAP infrastructure must meet at least the same or, preferably,

achieve even better performance values, availability, scalability, and reliability as the physical environment.

To meet these demands, all three customers in this study have gone through an SAP

virtualization assessment. This service is offered and delivered by VMware and AddOn

Systemhaus, a VMware partner located in Walldorf, Germany. VMware and AddOn jointly host

the SAP Virtualization Competence Center (http://www.vcc-sap.com). The assessment

evaluated performance values of the existing physical SAP servers over a specific time period

(in this case, between four and six weeks) to obtain information about the sizing of the VMware

ESX hardware and the number of VMware ESX instances necessary to virtualize the existing

SAP servers.

Typical daily business workload and sporadic peaks occur in this measurement window.

4.1.2 Methodology for Calculation of Hardware Requirements

VMware Capacity Planner is a tool used in the SAP Virtual Assessment. The tool discovers and

catalogues relevant server information, and measures performance values over a defined time

period. The measured data is stored locally or can be transferred to a VMware store called

https://optimize.vmware.com.

Hardware discovery occurs after the tool is installed and properly configured. The following

figure shows an example of a Capacity Planner report on discovered systems and includes

information about the server chassis.

Figure 1 following shows an extract of an SAP server performance assessment:


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Figure 1: Extract of Workload Characteristics of Customer SAP Systems

After evaluating the data over a period of time, the number of VMware ESX instances is

calculated.

SAP Assessments help to calculate the number and sizing of the VMware ESX host servers

needed to provide robust and well-scaled SAP systems in a virtualized environment.

4.1.3 Productivity Improvement with New Hardware

All three customers have reported performance improvements with their virtualized SAP

systems.

According to the SAP basis team of one reference customer, after successful migration of the

productive SAP system with approx. 400 concurrent SAP users, they have seen a dramatic improvement in SAP system performance.

Hardware Av. Response Time

in SAP

DB Request Time in

SAP

DB Direct Read

in SAP

Av. CPU-Time

As Is 900 ms 500 ms 9.5 ms 177 ms

Projected (in a VM) 568 ms 326 ms 5.2 ms 10 ms

The most surprising effect is the runtime of a Material Requirements Planning (MRP)

background job. Physical hardware calculates the job in 10,000 seconds; with the virtualized

infrastructure it takes only 6,000 seconds.

Another customer has assigned more memory to the SAP system in the virtual machine,

because legacy hardware did not have enough physical memory to increase the total amount.

This has a positive impact on performance because of the settings of database and SAP buffers,

e.g. the SAP Parameter “abap/buffersize” for the Advanced Business Application Programming

(ABAP) programming buffer.


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4.2 SAP Data Center Storage

There are several ways to connect VMware ESX hosts to shared storage. Shared storage is a

prerequisite for using the VMware High Availability (HA) feature. The following access

technologies can be used with VMware and SAP solutions.

Source: VMware

All of the reference customers use Fibre Channel technology, because iSCSI and NAS currently

have 10 Gbit/sec network hardware limitations (driver availability) and prerequisites (10

Gbit/sec switches). Nevertheless, using iSCSI or NAS can dramatically reduce costs for the

network infrastructure. With NAS and iSCSI, no Fibre Channel assets are necessary.

4.2.1 TCO Calculation for Data Center Server Storage

One of the key cost factors in implementing a SAN architecture is the need for every server to

be connected to a shared storage. This connection requires an investment in purchasing,

deploying, and managing host bus adapters (HBA) to connect the servers to SAN fabrics. Each

virtualized SAP system reduces the cost of implementing a SAN by reducing the number of

SAN switches and HBAs needed.

All of the customers in this study already have a Fibre Channel SAN; therefore an investment in

new storage technology was not necessary.

The following algorithms were used to calculate the storage TCO in this study:

Savings on HBA = ((Number of HBAs) * Price per HBA)/Life per Server) As Is – (same) Projected

Savings SAN switches = ((Number of SAN Switches) * (Price per HBA) / (Life per Server) As

Is – (same)) Projected

Each server is calculated with 2 HBA for trespassing reasons.

SAN switches are calculated with 24 ports.


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4.2.2 Calculation of Storage Requirements

We used the inventory function of the Capacity Planner tool to analyze how many servers “As

Is” had HBAs built in, since these HBAs were consequently attached to the SAN fabric as well.

As a result, we got a percentage “As Is” of servers attached to the SAN. In the projected environment we assume 100 percent of servers are attached to shared SAN. Attached to shared

storage, these new servers become highly available because they can leverage the VMware HA

feature.

As part of the VMware Virtualization Check, we obtained the I/O requirements for traffic

between the SAN and the physical SAP machines. They are shown in Figure 1, in the “Disk”

columns showing utilization in Transactions per second and MB per second. In addition, we

checked and proved the results in the SAP systems with the help of SAP mechanisms (e.g. SAP

Transaction ST04).

Typically, a Fibre Channel Disk in a SAN environment is able to deliver 180 I/O per second.

Taking the storage RAID level into consideration, the number of disks needed in a SAN can be

calculated.

4.2.3 Storage Productivity Improvement

In the beginning of SAP migration project discussions, customers were very skeptical about

gaining SAN improvements from SAP virtualization.

From a performance point of view they were right; there is no big difference between accessing

data from a raw device (i.e. without using the VMware vStorage Virtual Machine File System)

physically or virtually. Once we explained VMware Storage VMotion™, however, customers

saw the advantages immediately. This feature allows the movement of complete SAP system

data (virtual OS, SAP and database files included) to other storage areas while the SAP system

is up and running, and – what is particularly exciting – even to other SAN boxes, regardless of

vendor and access type (iSCSI, NAS or Fibre Channel). Just imagine how difficult it is to migrate

data from one SAN storage provider to another. The cost benefit of this capability is hard to

calculate in a study such as this one, but many external consultant days can certainly be saved.

Another benefit for one of the reference customers was the ability to simplify his SAP offline

backup strategy. Other features like data reduplication have not been analyzed. Specific

storage tools from different vendors are being used by the customers, but this is outside the

scope of this study.

4.3 SAP Data Center Networking

An efficient SAP system has to communicate over the network, with adequate response times,

with hundreds of SAP front end applications. SAP systems are typical client-server systems: a

query is sent from the client; the result set is calculated and sent back by the server.

To satisfy availability and Service Level Agreement (SLA) policies, typical physical SAP servers

have redundant network team-enabled cards built in.


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4.3.1 TCO Calculation for Data Center Networking

The number of physical network components, and thus the necessity of implementing different

team-enabled drivers for different operating systems, is reduced with VMware virtualization

technology. With fewer physical servers attached to the network, fewer switches, ports, NICs, and cables are required to provide server connectivity for the corporate network. One customer

said: “After virtualization, we completely filled one office room with useless network cables.”

For this study we used the following equation to calculate savings on networking components:

Annual network savings = round UP (Number of servers * Number of NICs per server *

Number of ports per NIC) / Number of ports per network switch) As Is – (Same) Projected

4.3.2 Methodology for the Calculation of Network Requirements

The total number of network cards is delivered by the discovery function of Capacity Planner in

the Inventory section. We were able to see how many network cards in the SAP systems were

built in, and with the aid of Capacity Planner, we could see the network traffic in MB/second.

4.3.3 Productivity Improvement due to Network Virtualization

There are many NIC vendors in the market, each with different firmware, ports, and device

drivers. With virtualization there is no need to pay particular attention to these details, because

the network mechanism is part of the VMware tools.

Apart from cost reduction and administrative simplification, one of the biggest benefits of

virtualization for SAP projects is the ability to change the virtual network card connection to

other defined virtual switches on the fly. Customers can clone complete SAP virtual machines

for fallback, backup reasons, for the creation of a test system, or for freezing errors for

reproduction during an upgrade. Due to identical hostnames and IP-addresses, the cloned

virtual machine is redirected to an internal switch with no physical connection to the enterprise

LAN. This switch reduces the risk of generating problems and errors in enterprise networks.

It also saves time and costs for consultant services, since changing hostnames in SAP

environments requires adjustments in operating system environment variables, share or mount points, SAP profiles, and SAP tables. An SAP system with ABAP and JAVA stacks is even more

complex.

4.4 Data Center Server Space

A reduction in the number of physical servers and SAN and network switches means reclaiming

valuable data center space. Expansion of future data center facilities and power requirements

can be avoided. Typically, special infrastructure (cooling racks and power systems, disaster

resilience) is required for larger SAP systems due to redundant power supplies, multiple CPUs,

and memory requirements.

As a result of discussions with the customers who took part in this study we concluded that, for

this TCO analysis and all three reference customers, the countable monetary value of saving a

few square meters is low. As a result we have decided to exclude server, storage, and network

space calculations from this study. One customer did avoid having to perform a cooling


14

efficiency upgrade of his air conditioning thanks to virtualization, but this is discussed in the

next section.

4.5 Data Center Power and Cooling

SAP systems are typically installed and integrated in the common customer data center. The

largest SAP customer has implemented a redundant failover data center and replicates the

storage data asynchronously to the failover site with SAN storage tools.

Power consumption in a data center can be divided into three categories: • Operating power for the computing infrastructure, including server hardware, network switches,

SAN components

• Network critical physical infrastructure (NCPI), such as transformers, uninterruptible power supplies (UPS), power wiring, fans, lighting

• Cooling power for air conditioners, pumps, humidifiers

4.5.1 TCO Calculation for Data Center Power and Cooling

Virtualization allows the number of physical servers to be reduced, along with related

networking and data center infrastructure. As a result, power consumption for operation and

cooling decreases.

Power saving is calculated by the differences in operating system power consumption and

cooling power of hardware before (“As Is”) and after virtualization (Projected), as follows:

Annual Server Cooling Power per Server = Operating Power per Server * Cooling Load

Factor * Airflow Redundancy / Airflow De-rating

To be fair, we have to acknowledge that, because of higher CPU utilization caused by higher

consolidation ratios, a VMware ESX host system requires more cooling and energy than a

physical server that is used less optimally.

In addition to power consumption, servers produce heat and require substantial cooling to keep

running. Furthermore, the analyzed data centers have shown so-called hot spots, in which heat

density is greater than in other areas. Data centers require additional airflow to account for

inefficiencies related to humidification. Humidification is required to reduce damage resulting

from a static discharge.

We used British Thermal Units (BTUs) for the calculation of the cooling device costs. One BTU is

the amount of heat energy needed to raise the temperature of one pound of water by one

degree F. This is the standard measurement for the amount of energy in fuel as well as the

amount of output of any heat generating device.

3.41 million BTU = 1000 KW/h2

2 http://www.physics.uci.edu/~silverma/units.html


15

100 servers retired is equivalent to taking 122 cars off the streets per year. A typical car over

an annual operating period produces nearly 12,000 pounds of CO2 emission or 600 gallons

of fuel)3

The electricity average price per hour in Germany in 2008 = USD $0.28 per 1 KW/h.

The data center operating hours of the participating customers = 8736 (24/7/52) hours.

4.5.2 Calculation of Power and Cooling Requirements

The operating power consumed by server hardware has been calculated by adding up the

power ratings of each server in the data center. Because this number represents the maximum

power used, it should be de-rated to achieve steady-state power consumption. In SAP

environments we have seen an average running load factor of 50 percent and higher. This

indicates that X86 servers consume between 50 - 70 percent of maximum rated power on

average. For the TCO calculation we used BTUs available for the cooling environment and the

average energy price per KWh in Germany in 2008 (see section 4.5.1). Together with the

customers, we analyzed the operating manuals of the server and cooling units, in order to work

out how many KW/h are used before and after virtualization.

The following table shows the power consumption of an X86 server:

Server with Power Watt/h Power / Day

in kWatt

Power / Year in

kWatt

Cost / Year @

$0.28 kW/h

1 CPU 475 11.4 4161 $ 1,165

2 CPUs 550 13.2 4818 $ 1,349

4 CPUs 1150 27.6 10074 $ 2,820

8 CPUs 1600 38.4 14016 $ 3,924

16 CPUs 4400 105.6 38544 $10,792

32 CPUs 9200 220.8 80592 $22,565

Source: Power Consumption: Alinean 2007 and average electrical power price in Germany in

2008

4.5.3 Productivity Improvement

The best improvement we saw was in a customer data center that was filled with physical

hardware where the cooling system was operating at its limit. Decreasing the amount of

physical hardware with virtualization saved the customer from having replace its cooling

environment.

With regard to energy and power consumption, there are a number of social and economical

aspects to be considered as well. Under the heading “Green IT” and carbon reduction,

customers can use these savings as an instrument to show the company’s contribution to the

fight against global warming. For simplicity, we have not taken these criteria into consideration

in our calculation model.

3 Shulz, Garry, Storage Power and Cooling Issues Heat Up, May 21, 2007

http://www.enterprise storageforum.com.


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4.6 SAP Data Center Provisioning

With virtualization, it is easier to acquire, set up and deploy SAP hardware and software to

meet increasing demand. Typical customer SAP landscapes consist of development, quality

assurance, and productive systems. One customer in this study enhanced the landscape with a

training system and an SAP Solution Manager.

The hardware setup consists of server unpack, network and power cabling, rack installation,

and disk setup. The SAP software deployment includes the installation of the operating system,

database and the SAP software. In a physical environment, a high availability cluster-enabled

software must be installed as well.

4.6.1 TCO Calculation for Server and Software Provisioning

Provisioning savings are measured as the working hours saved in not having to provision

servers manually. The savings are calculated by multiplying the hours and the saved hourly

wage of an SAP basis administrator.

For the installation of an SAP system we have calculated two full-time administrator days (16

hours) = Person hours per Provisioning Event. Included in the installation are the pre- and

post- installation steps of an SAP Solution.

Annual data center SAP deployment provisioning savings = (Systems provisioned per year *

Person hours per provisioning event * Average hourly labor rate for SAP basis staff) As Is–

(Same) Projected

+

Annual data center server provisioning savings = Server provisioning per year * Person

hours per server * Person hours per provisioning event * Average hourly labor rate for SAP

basis staff) As Is – (Same) Projected * 0.5 (improved deployment time)

Person hours per provisioning event = 3 hours

Average hourly labor rate for basis staff = US$45

4.6.2 Methodology for the Calculation of Provisioning Savings

With the aid of the SAP Virtualization Check we discovered the count of physical SAP systems, size of the SAP landscape, and consequently the number of VMware ESX host servers required

to meet the performance and HA requirements for the virtualization project. With the aid of the

HR department and in collaboration with the stakeholders, we created an average hourly wage

for the SAP basis administrator for each customer. Besides the normal server installation, the

SAP software deployment is considered and added to the TCO.

4.6.3 SAP Deployment Provisioning Improvement

VMware virtualization technology enables very fast deployment times to build up SAP

landscapes. Depending on the systems involved, we can reduce the provisioning time for a

three-system SAP landscape from six days to just under three days, for a 50 percent reduction

in deployment time.


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Initial SAP deployment savings = (Initial SAP Deployment) As Is – (Same) Projected * 0.5

(improved deployment time with VMware template technique)

4.7 SAP Data Center Server Administrative Costs

Reducing the number of physical assets helps to lower administrative costs. Physical server

administration includes changing the amount of physical memory and adding more CPUs

(sockets) to asset inventory, and managing security, disaster and recovery planning, as well as compliance management, vendor and contract management, chargeback and financial budget

management.

In terms of software, fewer monitoring tools are necessary, which also reduces administrative

costs.

The following table lists additional physical resource requirements for newer SAP releases.

Resource requirements for newer SAP releases SAP Release Additional CPU

Usage

Additional Memory

Usage

Additional Disk

Space

SAP R/3 Enterprise (4.7) Baseline Baseline Baseline

SAP ECC 5.0* 10% 10% 5%

SAP ECC 6.0** 15% 20% 10%

Source: *SAP Note 778774

**SAP Note 901070

The reason for higher CPU and memory usage is that newer SAP releases need additional

indexes, use larger table rows, support more database users or show different behavior of the cost-based optimizer of the databases.

Like every other software vendor, SAP follows a specific support and maintenance strategy.

Some customers have to upgrade to a newer SAP release due to the extended maintenance

costs.


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Figure 2: SAP Maintenance Strategy

4.7.1 TCO Calculation for SAP Administrative Costs

Reducing the number of physical servers can reduce server administration labor costs, allowing

reallocation of resources to more strategic uses.

Total server FTE (Full Time Equivalent) = Total physical servers / Physical servers per FTE

Total server administration labor costs savings = Total server FTEs required * Average

annual burdened salary of SAP basis administrators) As Is – (same) Projected

4.7.2 Methodology for the Calculation of SAP Administrative Costs

We pooled the information for the salary and external consultant support from the SAP basis

team. The salary information was obtained directly from the employees. This kind of

information is very critical, and no HR department was willing to give detailed information

about the average annual salary. However, to verify what we learned from the employees we

compared the information with an IDC|Alinean survey conducted in 2007.

4.7.3 Improvement

As the SAP enterprise solution evolves to address more complex business problems, new versions of SAP software and current capabilities are introduced. VMware virtualization can

provide capacity on demand for SAP functionality with minimal service interruption.


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After the virtualization of physical SAP systems was completed, incentive pay for overtime of

the SAP Basis Team was reduced by 20%. Subsequently, fewer people have been necessary to

administrate the SAP Landscapes. External consulting services have been reduced.

All three customers benefit by encapsulating their SAP systems into a virtual machine. Figure 2

shows how long SAP estimates the lifetime for an SAP NetWeaver Version (6.40, 7.00), with the

aid of mainstream maintenance. Typical hardware amortization, due to lifetime and service

contracts with the vendor, is between three to four years. As a result, SAP customers need to

redeploy the SAP release to a new piece of hardware once during its lifecycle. Due to operating

system and database dependencies, these are complex projects. All three reference customers need support from different vendors and consultants (e.g. storage vendor, SAP consultants) for

these hardware refresh cycles.

With virtualization, SAP systems can be “cold migrated” to any new VMware-certified system

with no change to the core SAP application inside the virtual machine.

4.8 Reduced Business Risk

In case of a disaster, virtualization reduces risk because if provides hardware independence and

built-in mechanisms to reduce the downtime of SAP systems. Traditional disaster recovery

solutions require redundant productive hardware. An active-passive cluster for the database is

also a mandatory failover mechanism to prevent downtime. Server configuration and complex

multi-step processes in bare-metal environments are difficult and time consuming.

4.8.1 TCO Calculation for Business Risk

The following mathematical algorithm is used in this study.

Data center server disaster recovery savings = (Amount of disasters per year * Recovery

time * Downtime cost per hour) As Is – (Amount of disasters per year * Recovery time * 25

percent (Reduced recovery time with VMware) * Downtime cost per hour) Projected

The 25 percent reduction of recovery time is achieved with VMware Consolidated Backup in

combination with third-party backup and recovery solutions.

4.8.2 Methodology for the Calculation of Business Risk

In our projects we have tried to investigate the downtime costs per hour. These costs include the labor for IT and the indirect impact of lost user productivity.

Unfortunately, opinions and calculations varied greatly within the companies; therefore we

deferred to a study from IDC|Alinean published in 2007. IDC|Alinean costs for downtime for

typical applications are shown in the next table.


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Cost per Application Downtime/Hour Application Type Cost per Downtime Hour by Application

Collaboration and Messaging $ 60,000

ERP * $120,000

Infrastructure/Productivity Tools $ 42,000

Line of Business Applications $120,000

Retail / Point of Sale $400,000

Scientific / Technical $ 85,000

Supply Chain Management $120,000

Trading $600,000

* SAP solutions are ERP applications

Source: IDC/Alinean

Alternative formula:

Downtime cost per hour = (Productivity impact to SAP end-user in %)* End-user burdened

salary + costs for, say, production stop, delivery bottlenecks, contract penalty, loss of

reputation

4.8.3 Improvements

VMware virtualization works alongside SAP solutions to deliver enhanced infrastructure and

high availability of applications for critical business functions. Using VMware infrastructure,

customers can implement a unified disaster recovery (DR) platform that allows many

production SAP virtual machine servers to be recovered in the event of a failure, without

investing in an exact replica of the production hardware. VMware infrastructure capabilities

such as VMware VMotion, VMware High Availability (HA) and VMware Consolidated Backup (VCB) deliver enhanced levels of availability to virtualized SAP environments.

4.9 SAP Clustering

Two of the reference customers require an uptime of 24 hours 7 days a week, because they

have worldwide subsidiaries across global time zones with different working hours.

Virtualization helps to reduce both planned and unplanned downtime.

In a physical environment, SAP offers SAP cluster solutions in conjunction with database and

storage vendors, which must be additionally implemented. This situation is described in one of

the case studies below.

4.9.1 TCO Calculation for SAP Clustering

Clustering implementation costs are higher than hardware and software costs. We have used

the following formula:

Annual SAP high availability savings = ((Hourly labor rate for IT system administrator staff)

* (Person hours to implement and test an SAP cluster) * Size of SAP solution + (Costs for

additional cluster software) + (Volume of additional server costs)) As Is – (Same) Projected.


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The SAP customers told us that to implement an initial physical SAP Cluster you need

approximately five work days. An additional eight hours in maintenance time is necessary

for SAP support stack scenarios in comparison to a NON-cluster environment.

4.9.2 Methodology for the Calculation of SAP High Availability

We worked with the customers to analyze the need for SAP high availability. Traditionally, each

SAP productive system is a candidate for SAP high availability, as described earlier. With

VMware virtualization, all SAP solutions including those in DEV and QAS can benefit from the

VMware HA feature, at no additional cost.

Together with the customers, we analyzed the average baseline prices for the following

products: • Microsoft Cluster

• HP/Digital TruCluster

• HP ServiceGuard

• IBM HACMP

On average, the price for a two-node cluster in Unix environments is approximately $20,000 per

year. A Microsoft Cluster is calculated at approximately $2000 per year.

The customers told us that the implementation of an initial SAP Cluster requires approximately

five additional work days. An additional eight hours is necessary in SAP support stack scenarios

in comparison to a NON-cluster environment.

4.9.3 Improvement

VMware HA provides cost-effective high availability for SAP applications running in virtual

machines. In case of a physical server failure, SAP virtual machines can be automatically

restarted on other servers within the pool that have spare capacity. VMware HA minimizes

downtime and IT service disruption, while eliminating the need for dedicated stand-by hardware. It provides high availability across the entire virtualized IT environment, without the

cost and complexity of failover solutions tied to either operating systems or specific

applications. The VMware HA feature is part of the enterprise license and can be activated in

five minutes for each kind of SAP solution.

The customers in this study report that single point of failure components like message server,

enqueue service and database components run reliably and need no additional attention from

cluster service monitor components. To monitor these SAP components, SAP CCMS features

are used. VMware heart beat alarm settings prevent unresponsive SAP operating systems.

4.10 SAP and VMware Server Load Balancing

SAP provides distributed transaction processing, automated load balancing, and replicated

service framework offering high levels of scalability and resource optimization for the

application environment. SAP environments also have a built-in logon group load-balancing

mechanism. This mechanism can be combined with the VMware Distributed Resource

Scheduler feature to assist with optimizing the infrastructure resources used by SAP and non-SAP applications.


22

4.10.1 TCO Calculation for Load Balancing

There are no real formulas to calculate a TCO value for load balancing. The load balancing

mechanism in VMware can guarantee the performance values and thresholds defined in service

level agreements.

4.10.2 Improvement

VMware infrastructure solutions support load balancing capabilities by addressing resource

management across the entire data center infrastructure and across multiple distributed SAP

application servers. VMware Distributed Resource Scheduler (DRS) dynamically allocates and

balances computing capacity across a collection of hardware resources aggregated into logical

resource pools. VMware DRS continuously monitors utilization across resource pools and

intelligently allocates available resources among the virtual machines based on pre-defined

rules that reflect business needs and changing priorities. When an SAP virtual machine

experiences an increased load, VMware DRS automatically allocates additional resources by

redistributing virtual machines across the physical servers. VMware DRS optimizes IT

environments to align resources with business goals, while ensuring flexibility and efficient

utilization of hardware resources.

4.11 SAP Installation and Upgrades

SAP solutions can run in physical environments on different operating systems and database

platforms. Only Windows and Linux (Red Hat, SUSE) operating systems are supported in a

VMware virtual infrastructure. There are some pre-configuration steps on the operating system

level that are required before an SAP installation takes place.

4.11.1 SAP Installation

The installation steps in a virtualized environment are the same as in the physical world and can

be performed in two days. With a virtualized environment, however, we have seen three

benefits in SAP installation scenarios. • SAP software DVD media management can be simplified

• Installation steps can be captured and recovered with the help of the VMware snapshot manager in VMware vCenter

• Once an SAP system is installed, templates and clones can be made easily

In all three customer projects, the required SAP media DVDs were copied to a VMFS Disk and attached as a temporary installation drive. After installation, this drive can be reassigned to

other virtual machines.

An SAP installation typically consists of four phases: • Installation of the operating system

• Installation of the database

• Installation of the SAP executable

• Initial import and load of the database with tables, fields, and data

After each successful installation phase, a VMware snapshot was made to allow roll back to a

know clean state in case of a serious error.


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SAP upgrades consist of two phases: • Prepare

• SAPup

In the SAPup phase there are two methods for importing the new release objects into the

database. These methods are: • Downtime-minimized

• Resource-minimized

The following is a brief explanation of both SAP upgrade methods.

4.11.2 SAP Downtime Minimized Upgrade Method

Due to the size and volume of SAP packages (SAP support packages, SAP add-on installation packages, and SAP add-on upgrades), import of the packages has a large impact on the

duration of system downtime, when no end-user is able to work. To reduce the downtime when

importing SAP support packages, the downtime-minimized import mode assists with

importing the majority of the objects during production operation of the system. In this mode,

the objects are imported into the database in an inactive state, in which they are largely

“invisible” to the system. The system can continue to be used productively.

For this upgrade methodology, we strongly advise against the using VMware snapshots while

end-users are working productively. Data can be lost in the case of a rollback to older

snapshots.

4.11.3 SAP Resource Minimized Upgrade Method

In resource-minimized environments, the system is down during SAP package import. The

advantage of this method is that the database log files do not really increase, because no end-

users produce additional data. This method is faster than downtime-minimized, but causes more downtime for the productive system.

With this method, VMware snapshots can prevent long–running backup jobs performed by

different departments and people.

4.11.4 Building Up an SAP Landscape

Once an SAP system is installed in a virtual environment, VMware templates and the clone

mechanism can be used to create an SAP landscape of two to five systems. SAP recommends

the establishment of a three system landscape with development, quality assurance, and

productive systems.

4.12 SAP Software and Hardware Maintenance

From time to time, SAP publishes changes and corrections to its solutions in support packages.

These support packages are first applied to the development systems. After a successful test

they are implemented in the downstream systems. Maintenance of the physical machines is

also necessary, including such activities as doing a firmware upgrade of a network card, a Host

Bus Adapter Controller, or the addition of more memory or CPU capacity.


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4.12.1 SAP Support Packages

An SAP system consists of different software layers, also called software components. All layers

are regularly updated using support packages; that is, errors are corrected and new functions

are provided.

The SAP system should always be kept at the current correction status to prevent errors in the

standard release. In addition to the standard functions in an SAP system, additional functions

are sometimes required for a particular industry solution (IS).

Each SAP support package has a stack number based on an SAP release number. If a customer

has different SAP solutions and components, he has to deal with different SAP support package

stacks.

In the table below the stack number 15 was released in the first quarter for SAP ERP 6.0. The

next, number 16, is scheduled for August 2009.

Support packages and add-ons are installed in ABAP with an SAP transaction called SPAM and

SAINT. For the Java stack a tool called JSPM (Java Support Package Manager) is used.

SAP Support Package Schedule for 2009 and SAP Solutions


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We recommend instantly rolling back SAP virtual machines using snapshots during patch

problem resolution.

4.12.2 SAP Kernel Patches

The executable SAP programs are written in C and called SAP kernel. Each SAP release and SAP solution has its own subset and version of these executables. The programs must be

patched from time to time, due to database, operating system, and release dependencies.

Replacing these SAP programs causes SAP system downtime.

SAP kernel patching is a procedure in which the SAP programs are exchanged with current

versions. Most of the up-to-date SAP release kernels are downward compatible. During the

startup of the SAP system, these kernel programs are distributed to all attached SAP instances

to make sure that every host or VM has the same patch version and functionality.

VMware patches can be tested concurrently on multiple configurations (different versions of

OS, SAP, Web, etc.) that are hosted on the same physical system.

4.12.3 Industry-Standard (x86) Hardware Maintenance

New computer equipment is usually sold with a warranty. The guarantee period in Germany is two years, but some vendors offer longer warranties. If the computer fails during the warranty

period, the vendor should resolve any hardware problems at no additional cost. In addition, a

customer can obtain an extended support and maintenance contract.

On average, we calculate using the following values for x86 hardware maintenance:

Server Type Reaction Time (Hours/Days/Year) Price (USD)

2* Quad - Core 13/5/1 $450

4* Quad - Core 24/7/1 $840

Source: Customer contracts

4.12.4 Non-Industry Standard Hardware and Software Contracts

Two customers replaced their SAP systems running on non-x86 hosts with clustered

environments with x86 technologies. The maintenance costs for the non-x86 hosts are

significantly higher.

Type Reaction Time (Hours/Days/Year) Price (USD)

Hardware 24/7/1 $46,000

Software - $20,700

We recommend dynamically reassigning SAP virtual machines with VMware VMotion to other

systems while performing maintenance or changes on the current physical system, thus

causing minimal disruption to end-users.

4.12.5 SAP Enhancement Packages

The enhancement package for the SAP ERP application provides new or improved software

functionality that can be implemented in a modular fashion. There is no need for a major


26

upgrade. New features and technical improvements can be applied while the core software

remains in place.

The enhancement packages include collections, or bundles, of enterprise services. Each bundle

provides new services as well as documentation on how the services can assist with extending

and reconfiguring processes or groups of related processes. Each bundle includes explanations

of relevant processes, groups of processes, and roles, along with descriptions of business

objects and tips on how to implement the new services.

4.12.6 TCO Calculation for SAP Maintenance

SAP maintenance is one of the major cost drivers for the reference customers. However, SAP

patches, new SAP releases, are useful and necessary for reasons of new business functionality,

security, and stability.

The calculation here is based on database sizes of nearly 500 GB.

SAP maintenance savings = ((SAP installation savings) As Is + (SAP upgrade savings) As is +

(SAP patch savings)) As Is – (Same) Projected * 0.75 improved by VMware

SAP installation savings (initial three-system landscape) = (2 work days * three systems *

Hourly labor rate for IT system administrator staff per consultant) As Is – (3 days for three

systems * Hourly labor rate for IT system administrator staff or consultant)

SAP upgrade savings = ((5 work days * 1 DEV system + 3 days * 1 QAS system + 3 days * 1 PRD system) * Hourly labor rate for IT system administrator staff or consultant) As Is – 0.8

*(same* Hourly labor rate for IT system administrator staff or consultant) Projected

SAP patch savings (complete support package stack) = (2 days * Hourly labor rate for IT

system administrator staff) As Is – 0.75 * (2 days * Hourly labor rate for IT system

administrator staff) Projected

The SAP patch saving and the SAP upgrade factors of 0.75 and 0.8 are achieved by using

VMware snapshot and clone technologies.

4.12.7 Improvement

The new VMware clone and template technologies can save time and lower costs. Faster

change management with fewer system resource requirements can be achieved using new test

patches concurrently on multiple configurations (different versions of OS, SAP, Web etc.) that

are hosted on the same physical system. With VMware snapshots, the backup times for milestones in SAP patch upgrade scenarios can be accelerated and resource utilization can be

minimized.

4.13 SAP Planned Downtime

Planned downtime expenses are the annual losses in productivity due to planned unavailability

of the SAP system. SAP planned downtime can be categorized as: • Hardware maintenance (adding more memory, adding more CPUs, firmware upgrades to the

controller, and so on)


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• SAP software maintenance (adjusting SAP parameters such as memory, buffers, security settings, etc.)

• Applying new support pack stacks

• Offline backups

4.13.1 Methodology for the Calculation of SAP Planned Downtime

In the SAP virtualization projects, we evaluated these criteria together with the customer's end-

users. We performed some end-user surveys and discussed the results with the IS

management. For customers with 24/7 uptime, the reduction of planned downtime is equal to

the downtime of the production system.

4.13.2 TCO Calculation for SAP Planned Downtime

The SAP planned downtime depends on the company policies of the customer. The following

values are taken from SAP customer surveys. A customer with 24/7 operation hours has the

following prerequisites per year.

Annual SAP planned downtime for maintenance* Planned Downtime for

Maintenance

Hours Unavailable Unavailable

per Year in %

Cost

Hardware** 4 0.05 $ 480,000

SAP Software per

Central Instance***

16 0.18 $1,920,000

* At least two SAP patch stacks per year per eight hours each ** $120,000 for SAP ERP

***The contribution to TCO in the final calculation is 30 percent

In this study the calculation of SAP planned downtime is the same as for SAP unplanned

downtime.

4.13.3 Improvement

With VMware VMotion technology, the planned downtime for hardware maintenance becomes

zero. While the SAP system is up and running, a hot migration to another VMware ESX host

machine can be performed. Internal service level agreements can be fulfilled more satisfactorily

with VMotion.

Offline backups can be completely replaced by VMware Consolidated Backup, with the aid of

snapshot technology. VMware Consolidated Backup provides an easy-to-use, centralized facility for LAN-free backup of virtual machines. Consolidated Backup simplifies backup

administration, reduces the load for VMware ESX host machines, and can reduce SAP

downtime.


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5 VMware Infrastructure investment To achieve expected TCO savings, there must be an investment in VMware virtualization

solutions. Customers must take four areas into consideration: • VMware infrastructure licensing

• VMware infrastructure training

• VMware infrastructure design and planning

• Heterogeneous or homogenous SAP migration costs

5.1 VMware Infrastructure Licensing

Deploying a virtual infrastructure requires a onetime cost of purchasing VMware software

licenses, as well as annual support und subscription costs. For an SAP solution as a mission-

critical application, the VMware Infrastructure Enterprise Edition is required. The Enterprise

edition includes ESX, VMFS, vCenter Management Server, Virtual SMP, VMotion, VMware HA,

VMware DRS, and VMware Consolidated Backup.

The model derives the cost of software by dividing by two the total number of processors (socket) after virtualization. One Enterprise Edition server license for every two CPUs is

required after consolidation.

Recurring fees vary, depending on the type of support and subscription program purchased.

VMware provides Gold and Platinum level support contracts. Due to the need for 24 hours/7

days a week support for their SAP environments, two customers chose the Platinum Support

model and pay 25 percent (21 percent) of the purchase price annually. We used the Enterprise

Edition for the TCO calculation.

VMware VI Edition Description Value Source

VI Enterprise Edition

License Cost

Unit price VI $5,750 VMware Commercial

Price List*

VI Enterprise Edition

License Units

Units to purchase Number of CPUs / 2 Calculated

VirtualCenter Management Server

License Cost

Unit price VC $5,000 VMware Commercial Price List

Subscription Factor Percentage of unit price

that yields annual fee

21% (Gold)

25% (Platinum)

VMware Commercial

Price List

*Source: http://www.vmware.com/pdf/vi_pricing.pdf

TCO calculation:

Initial purchase = VI enterprise license cost * VI enterprise license units + VC management

server license cost

5.2 VMware Infrastructure Training

A training class is available for VMware virtualized SAP environments. This class can be found in

the official SAP training catalog. For calculation purposes, the number of classes required is

dependent on the number of administrators who require training. In addition, customers have


29

attended the AD310 course classes for a better understanding how a virtualized SAP

environment can be management efficiently.

Training Class Costs Class Title Course Cost*

AD310: Install and Configure VMware for SAP

Administration (5 days)*

$4,500

*Source: SAP Education – Training Catalog – http://www.sap.com/education

TCO calculation:

Initial VMware infrastructure trainings costs = AD310 * SAP Administrators * course cost

Initial costs for knowledge transfer Customer Number of Administrators Cost*

Customer 1 3 $ 13,500

Customer 2 2 $ 9,000

Customer 3 1 $ 4,500

*Source: Customer

5.3 VMware Virtualized SAP Environment Design and Planning

An SAP / VMware migration requires dedicated planning and design of the virtualized VMware

servers and SAN requirements, along with the adjustment of the SAP systems. Such a

virtualization check, offered by multiple VMware SI partners, is used as the basis for the TCO

calculation.

Cost of SAP Virtualization Check Offered by a VMware Partner Consulting Package Cost

SAP Virtualization Check (dependent on size of SAP landscape) $7,000

TCO calculation:

Initial virtualization check costs = Amount of SAP landscapes * Fee

Initial cost for SAP Virtualization Checks Customer Number of Virtualization

Checks

Cost

Customer 1 1 $7,000

Customer 2 1 $7,000

Customer 3 1 $7,000

5.4 Heterogeneous or Homogenous SAP Migration Costs

To facilitate the migration of physical SAP systems to a virtualized VMware environment, a

certified SAP and VMware migration consultant is needed. The time for the consultancy

depends on the SAP database size. For databases smaller than 500 GB, twelve days are assumed (5-Dev, 3 – QAS, 3 – PRD, 1-STDBY).


30

Typical Costs per Day for a Certified SAP Migration Consultant in Germany Service Cost per Day

Certified SAP and VMware Consultant Approx. $2,400

Source: VMware Partner

TCO calculation:

Initial Certified Consultant Costs = Number of days * Cost per day


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6 Investment for SAP Physical to Virtual Migration An SAP system migrated to other platforms with different databases and/or operating systems

is called a “heterogeneous SAP system copy.” If databases and operating systems remain the

same, the migration is called a “homogenous SAP system copy.” The procedures and tools are

supplied by SAP. In the case of heterogeneous SAP system copies, SAP strongly recommends

the engagement of a certified SAP Migration Consultant. For homogenous SAP system copies,

there is no specific SAP recommendation. The table following shows the decisions made by the

three customers in this study on changing the operating system and the database for their

physical to virtual (P2V) migration.

Customer Changes to Operating System and Database for Virtualization

Customer Operating System

Change

Database Change SAP System Copy

Procedure

Customer 1 X X Heterogeneous

Customer 2 X Heterogeneous

Customer 3 - - Homogenous

6.1 System Copy Categories

6.1.1 SAP Heterogeneous System Copy

A heterogeneous system copy is defined as one in which either the operating system or the

database system or both are changed. A benefit of this kind of migration is the reorganization

of the database and the combination of SAP Unicode features. In SAP terminology, the

database is exported to the file system and imported into the target system.

6.1.2 SAP Homogenous System Copy

A homogeneous system copy is defined as one in which the target system uses the same

operating system and database as the source system. The database contents are copied from

the source system to the target system. This can be done by restoring a backup or with

database export/import tools.

6.2 Physical to Virtual Migration

6.2.1 VMware Converter

VMware vCenter Converter is able to run on a wide variety of hardware and supports most

commonly-used versions of the Microsoft Windows and Linux operating systems. VMware

Converter is also a powerful tool for converting SAP systems. The following tasks can be

performed with this migration tool: • Quick and reliable conversion of physical machines (locally or remotely) into virtual machines

without any disruption or downtime.

• Performance of complete multiple conversions simultaneously with a centralized management console and an intuitive conversion wizard.

• Conversion of other virtual machine formats such as Microsoft Virtual PC and Microsoft Virtual Server or backup images of physical machines such as Symantec Backup Exec System Recovery or

Norton Ghost to VMware virtual machines.


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• Restoration of VMware Consolidated Backup (VCB) images of virtual machines to run virtual machines.

• Cloning and backup of physical machines to virtual machines as part of a disaster recovery plan.

6.2.2 Customer P2V SAP Migration Costs

All three reference customers planned their P2V projects together with a VMware partner who

provides VMware Certified Professionals and SAP Certified Consultants.

The VMware Converter exists in two versions: stand-alone or integrated in vCenter. The stand-

alone VMware Converter is available free of charge and can be used while the systems are

running. When converting hosts with SAP systems, conversion takes place while the systems

are down.

The number of consulting days and the costs are listed in the following table.

Initial Consulting and Service Costs for P2V Migration Customer Number of SAP

Systems

Consultant Days* Cost**

Customer 1 5 10 $24,000

Customer 2 3 6 $14,400

Customer 3 6 6 $14,400

*Consultant Day = 8 hours

**Consultant Fee = $2,400.00 per day


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7 Use Case Scenarios Before and After Virtualization In this chapter we describe some special SAP issues and procedures and explain how customers

save costs with VMware tools.

IT departments face two key challenges in change management: patch testing and testing

upgrades for compatibility with standard corporate hardware, operating systems, and

application configurations. IT organizations traditionally need to procure identical hardware

and create testing environments that mirror the operating system and application

configurations of the production environment.

A typical and recommended SAP landscape consists of DEV, QAS and PRD systems.

Customers also host other SAP systems for training and testing purposes. With VMware

infrastructure, SAP basis teams are able to clone productive systems on the fly and create a set

of virtual machine libraries that mirror the productive environment. They can then be used for

provisioning the test environment. The latest patches and upgrades can be tested on these

virtual machines running SAP applications, eliminating the need to have dedicated hardware to

perform these tests. Patches can be rolled into production with minimal interruption to end-

users. In the event of problems, the virtual machines can be instantly rolled back using the

VMware snapshot features.

For the purposes of clarification, a short explanation of SAP products and business solutions

follows.

7.1 SAP Solution Architecture

The SAP Business Suite is one of the world's most comprehensive families of adaptive business applications, providing best- of-breed functionality built for complete integration, industry-

specific functionality, unlimited scalability, and easy collaboration over the Internet.

Individually, SAP Business Suite applications help customers manage their most critical

business processes. Collectively, they form a tightly-integrated suite that adds value to every

facet of a customer’s business, including its interactions with partners, suppliers and end-

customers. The core product from SAP is called SAP ERP. In addition to ERP software, other

key SAP products and solutions are available: • SAP NetWeaver Business Intelligence Suite (SAP BI)

• Customer Relationship Management (SAP CRM)

• Supply Chain Management (SAP SCM)

• Supplier Relationship Management (SAP SRM)

• Human Resource Management Systems (SAP HRMS)

• Product Life Cycle Management (SAP PLM)

• Process Integration (PI) – (Message broking, Message workflows)

• Enterprise Portal (EP)

• SAP Knowledge Warehouse (KW)

The SAP Business Suite applications are based on the SAP NetWeaver platform, a technology

and integration platform. SAP NetWeaver enables rapid but controlled business process

changes. Through its enterprise services repository, the platform incorporates business

functionality in the form of ready-to-use enterprise services and process components. It also

provides an integrated platform of composition technologies for orchestrating business


34

processes, composing applications and deploying innovative solutions. SAP NetWeaver

consists of an ABAP and/or J2EE Stack.

SAP enterprise applications can be deployed on a two- or three-tier architecture. In terms of

software deployment, the three-tier client-server architecture consists of a presentation layer,

an application layer, and a database layer. In terms of hardware deployment these three layers

can run separately on different computers or together on the same computer, depending on

the requirements and size of the SAP solutions being deployed by each customer. The

presentation and application server layers can be distributed over multiple computers. The

three-tier architecture targets the support of large numbers of users. The two-tier architecture is usually sufficient for many small and midsize companies, as well as for sandbox,

development, training and test systems.

A complete SAP implementation may consist of hundreds of systems with different SAP

applications running on dedicated servers. Depending on the application and the time of

monthly processing, many SAP environments may have a low server utilization rate. Those with

low utilization rates may be worthwhile targets for virtualization with VMware virtualization

technology.

7.2 Customer SAP Solution-Based Landscapes

In the following chapters we show, in detailed scenarios, what benefits the customers obtained

with the virtualization of their SAP system landscapes. First we explain what the SAP landscape

and systems included prior to being virtualized; then we show the reduction of physical

infrastructure after virtualization.

7.2.1 SAP Landscapes Before Virtualization

All customers in this study drive an SAP ERP installation with additional dialog instances. As a

result, we focus only on this kind of SAP solution-based landscape in this study.

Customer 1:

This customer's company was founded as a family business in 1849 in Germany and has been a

supplier to the automotive industry since 1920. This company operates in the automotive

sector, with more than 3,000 employees and more than 400 concurrent SAP users worldwide.

This customer uses SAP ERP systems attached to SAP Content Server systems (file based) for

its CAD drawings.

The SAP R/3 Release 4.7 landscape consists of five SAP systems: DEV, QAS, PRD, EDU, SOL.

DEV = SAP Development System

QAS = SAP Quality Assurance System PRD = SAP Productive System

EDU = Education System

SOL = SAP Solution Manager

These SAP systems originally ran in a mainframe environment. After virtualization the systems

were upgraded to SAP Release ECC 6.0.


35

Due to internal SLA (Reliability, High Availability) requirements, two hosts run in parallel as a

cluster. The hosts run several SAP central instances with different port numbers. The SAP

database files are located on a Fibre Channel SAN environment from the same vendor.

This customer has its own dedicated SAP / VMware infrastructure. The VMware ESX host

servers are used exclusively for the SAP infrastructure.

Aggregated Annual Hardware, Storage, and Network Costs for One Mainframe Host Costs before Virtualization No. of Units Total Cost

SAP Hardware Mainframe (4-way, 64 GB RAM)*

1 $219,000

Operating System (4 CPUs)** 1 $ 24,700

Hardware Maintenance 1 $ 46,000

Software Maintenance 1 $ 21,000

SAP Network 4 Network Cards $ 767

SAP Storage (HBAs + Port) 2 $ 1,540

Console 1 $ 1,800

Total - $314,807

* The pre-virtualization hardware costs for this customer are based on a vendor quote of

Q42007.

** Cluster is part of the operating system

The objective of this customer was to reduce the cost of hardware, hardware maintenance, and

software maintenance.

Customer 2:

Customer 2 operates in the pharmaceutical sector. The company is located in Germany and has

more than 2,300 employees. Its SAP PRD systems handles more than 200 concurrent SAP users

on a UNIX cluster, all running on the same cluster with different port numbers. The initial SAP release was 4.6C. Since then the SAP systems have been upgraded to SAP ECC 6.0 within the

virtualized infrastructure.

The DEV, QAS and PRD SAP systems for the commercial SAP modules were hosted on one

Unix cluster with two hosts. The SAP database files are located on a SAN box attached via Fibre

Channel.

Aggregated Annual Hardware, Storage, and Network Costs for One UNIX Host Costs before Virtualization No. of Units Total Cost

SAP Hardware Unix Cluster (4-way, 32 GB

RAM)*

1 $88,500

Operating System (4 CPUs) 1 $ 3,050

Cluster Software $20,000

Hardware Maintenance 1 $ 8,000

Software Maintenance 1 $ 780



Total - $122,110

* The pre-virtualization hardware costs for this customer are based on the original purchase price rather than today’s price, since this type of hardware is not available anymore.


36

The objective of this customer was to reduce the costs for hardware, hardware maintenance,

and cluster software.

Customer 3:

Customer 3 is a federal government institution for policy, research and practice in the field of

vocational education and training. The SAP systems, based on release SAP ECC 6.0, originally

ran on x86 hosts used by 100 SAP end users.

The SAP landscape consists of DEV, PRD and SAP Solution Manager together with SAP Enterprise Portal 7.0 for using the SAP package “Employee Self Service.” The SAP Enterprise

Portal landscape also includes DEV and PRD systems. In addition, the customer works with an

SAP BW landscape, with DEV and PRD, attached to the SAP portal enterprise for BEX queries.

Each SAP solution originally ran on a dedicated server.

Aggregated Annual Hardware, Storage and Network Costs for One x86 Host Costs Before Virtualization No. of Units Total Cost

SAP Hardware X86 (2-way, 8 GB

RAM)

1 $ 7,500

Operating System 1 $ 1,000

Cluster Software 1 $ 2,000

Hardware Maintenance (24/7) 1 $ 1,100

Software Maintenance 1 $ 0



Total - $13,250

The customer’s objective was to reduce costs for the cluster software for productive SAP BW,

SAP Enterprise Portal, and SAP ERP. A further objective was saving external consultant know-how for other SAP projects.

7.2.2 SAP Landscapes After Virtualization

Customer 1:

Previously on two mainframes, the virtualized SAP systems were distributed to three VMware

ESX hosts based on x86 technology. The customer also virtualized some of the network

services including domains, DNS, WINS, DHCP, and so forth. (Analyses of these other

virtualized services are not included in this documentation.) This customer has its own

dedicated SAP / VMware infrastructure – that is, the VMware ESX hosts run the SAP

infrastructure exclusively.


37

Aggregated Annual Hardware, Storage, and Network Costs for One x86 VMware ESX Host

for Customer 1 Costs after Virtualization No. of Units Total Cost

ESX x86 Server (4 Socket) 1 $ 17,300

Operating System 1 $ 0

Cluster Software $ 0

VMware Enterprise Edition 2 $ 3,834





Total - $26,814

Customer 2:

Two UNIX clusters were replaced by two ESX host systems. The following diagram shows the

distribution of the SAP systems and the SAP instances to the VMware Infrastructure. The

systems are distributed to different systems in case of a failover.


for Customer 2 Costs after Virtualization No. of units Total Cost









Total - $13,697


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Customer 3:

This customer also virtualized all running SAP systems to two ESX host servers, implemented in

a VMware cluster.


for Customer 3 Costs after Virtualization No. of Units Total Cost









Total - $13,697

7.2.3 Annual Hardware and Software Cost Savings

The following table summarizes the cost savings experienced by all three customers for SAP

hardware and software after virtualizing, as well as the savings resulting from replacement of

the cluster environment with VMware HA.

Annual Cost Savings for Customer Hardware and Software for SAP Solution Landscape Physical Architecture VMware Architecture

Hardware and Software Costs

No. of Servers

Cost No. of Servers

Cost Savings Savings in %

Customer 1 2 $ 629,614 3 $80,442 $549,172 87

Customer 2 2 $244,220 2 $27,394 $216,826 89

Customer 3* 5 $ 66,250 2 $27,394 $ 38,856 59

* The x86 hardware was three years old.

The new hardware generation offers more cores with better performance results. The new

server models today contain 10 times more memory capacity compared to the older models.

7.2.4 Annual A/C and Power Savings

The next table shows the power costs and savings for each customer.

Annual Power Costs and Savings* Physical Architecture VMware Architecture

No. of Servers

Cost No. of Servers

Cost Savings Savings in %

Customer 1** 2 $9,021 3 $8,462 $ 559 6

Customer 2*** 2 $5,641 2 $2,698 $2,943 52

Customer 3 5 $6,745 2 $2,698 $4,047 60

* Cost $0.28 KW/h

** Mainframes use more power than x86 systems

*** Different number of CPUs


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7.2.5 Annual Cooling Costs for SAP Servers

To eliminate the heat produced by an SAP server, an investment of almost the same amount of

energy is required.

Annual Cooling Costs and Savings for SAP Server and Mainframe* Physical Architecture VMware Architecture

No. of

Servers

Cost No. of

Servers

Cost Savings Savings in

%

Customer 1** 2 $9,021 3 $8,462 $ 559 6

Customer 2*** 2 $5,641 2 $2,698 $2,943 52

Customer 3 5 $6,745 2 $2,698 $4,047 60

* Cost $0.28 KW/h

** Mainframes use more power than x86 systems

*** Different number of CPUs

7.3 Deploying an SAP Solution with VMware Templates

Once the decision to install an SAP ERP solution is made, the SAP landscape must be installed

and deployed. Typically, initial installation and deployment occurs only once. Upgrade and

patch scenarios occur later on a regular basis.

Sometimes, however, the SAP technologies make it necessary to install additional SAP

solutions together with the central SAP ERP system. SAP Business Warehouse (BI) and SAP

Solution Manager are good examples. With SAP BW, an SAP Enterprise Portal is helpful for

creating new queries with the SAP Business Query Designer and Explorer (SAP BEx). To obtain

the latest SAP patch stacks from the SAP Service Marketplace on a regular basis, it is

mandatory to use the SAP Solution Manager with the feature “Maintenance Optimizer”

(MOPZ). The SAP Solution Manager is based on the SAP NetWeaver Platform and has the

same technical platform as an SAP ERP system.

7.3.1 Cost of Deploying a Solution Before Virtualization

Typically, an installation of an SAP solution takes at least two days. The customers use different

numbers of SAP systems per SAP landscape.

Aggregated SAP Server, Administrative and Deployment Costs per Clustered SAP Solution Landscape Before Virtualization Physical Provisioning and Administrative Cost for one SAP Solution Landscape

Customer Provisioning Number No. of

SAP CI

Hours Total

Hours

Cost

Customer 1

Setup Host 2 3 6 $ 270

OS + DB 5 5 25 $1,125

SAP Software 5 16 80 $3,600

SAP Cluster 1 40 40 $1,800

Administrative

Costs

2 8 16 $ 720

Total $7,515

Customer 2

Server HW 2 3 6 $ 270


40

OS + DB 3 5 15 $ 675


SAP Cluster 1 40 40 $1,800

Administrative

Costs

2 8 16 $ 720

Total $5,625

Customer 3

Server HW 5 3 15 $ 675

OS + DB 6 5 30 $1,350


SAP Cluster 3 40 120 $5,400

Administrative

Costs

5 8 40 $1,800

Total $13,545

Average hourly labor rate = $45

OS=Operating system

DB=Database

HW=Hardware

Customer 3 runs three SAP solutions: SAP ERP, SAP BW and SAP Portal. To save cluster nodes,

the SAP DEV systems also run as cluster nodes. The SAP BW solution ran as a single ABAP Java

Stack Application together with SAP Portal.

Aggregated SAP Server, Administrative and Deployment Costs for Clustered SAP Solutions

Before Virtualization Customer Number of SAP Landscapes Total Costs for SAP Annual Costs for all

SAP System

Landscapes (3 years

lifetime)

Customer 1 1 $ 7,515 $2,505

Customer 2 1 $ 5,625 $1,875

Customer 3 3 $13,545 $4,515

7.3.2 Cost of Deploying a Solution After Virtualization

With VMware virtualization technology, the time needed for setting up a complete SAP

landscape can be dramatically reduced with VMware templates. In a virtualized environment

the initial installation time for the first SAP system in the SAP landscape remains the same as in the physical world. Once the first system is set up, it can become an SAP template, allowing

downstream SAP systems to be deployed in half a day. Overall, an initial three-system SAP

landscape can be deployed and adjusted in three days.

Initial Aggregated SAP Server, Administrative and Deployment Costs with VMware

Infrastructure

Physical Provisioning and Administrative Costs for one SAP Solution Landscape

Customer Provisioning Number No. of

SAP CI

Hours Total

Hours

Cost

Customer 1


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Set up Host 3 3 9 $ 405

OS + DB 5 2.5 12.5 $562.50

SAP Software 5 8 40 $ 1,800

VMware 3 5 15 $ 675

Administrative

Costs

3 8 24 $ 1,080

Total $4,522.50

Customer 2

Server HW 2 3 6 $ 270

OS + DB 3 2.5 7.5 $337.50


VMware 2 5 10 $ 450

Administrative

Costs

2 8 16 $ 720

Total $2,857.50

Customer 3

Server HW 2 3 6 $ 270

OS + DB 6 2.5 15 $ 675


VMware 2 5 10 $ 450

Administrative

Costs

2 8 16 $ 720

Total $ 4,275

Average hourly labor rate = $45

OS=Operating system DB=Database HW=Hardware VMware= Setup VI and configuration

Initially Aggregated SAP Server, Administrative and Deployment Costs per High

Availability SAP Solution Landscape with VMware Infrastructure* Customer Number of SAP

Landscapes

Before

Virtualization

After Virtualization Saving in %

Customer 1 1 $ 7,515 $4,522 40

Customer 2 1 $ 5,625 $2,857 49

Customer 3 3 $13,545 $4,275 68

*See 4.6.3

7.4 High Availability and Clustering

SAP systems are mission-critical for most companies, which means there is a need for a failover

and switching scenario. SAP systems have three critical Single Point of Failure (SPOF)

components: • Database (Database Vendor)

• Message service (SAP)

• Enqueue service (SAP)

Besides redundant network interface adapters, switches, routers, DNS Servers, RAID Levels

and Storage (NAS, SAN), these components must be secured via a cluster solution.


42

7.4.1 SAP Database

An SAP application consists of one or more instances of an application server. Each instance

can run on a separate server, but it is also possible to operate multiple instances on one host.

An SAP instance can provide different service types. The standard SAP services, which can be configured on all instances of the SAP component, are dialog, batch, update, and spool work

processes. The failure of an SAP instance, on which these standard services are configured,

causes a termination and rollback of all transactions currently processed within this instance.

Database consistency is guaranteed at all times. Terminated transactions can be repeated on

one of the remaining instances.

If the SAP database is not available, all running work processes are still pending. In a cluster

environment, the DBMS fails over to another node, and the work processes have a built-in

recurring polling mechanism and reconnect themselves once the database is up and running

again.

7.4.2 SAP Message and Enqueue Service

Apart from the standard services, there are two other services that exist only once. They are

supplied by the message service and the enqueue service and are potential single points of failure. The SAP instance running both of these services is called the central instance (CI). In

case of a stand-alone or enqueue replication service, the enqueue service is operated separately

from the other SAP services and independently of the other application servers. Since the

message server can also be operated separately from the other application servers, both of

these critical components can be restarted faster than a complete application server.

The enqueue service is a critical component of the SAP system. It administers locks using

enqueue objects within SAP transactions that can be requested by applications to ensure

consistency within the SAP system. Since the lock table is held in the main memory of the

enqueue server, a server failure without additional replication mechanisms results in a loss of

locks held. To maintain consistency, all open transactions are rolled back after the enqueue

server is restarted.

The enqueue replication service enables the lock table to be replicated on a second server, the

so-called replication server. A copy of the lock table is maintained and permanently updated on

this server. If the enqueue service fails, a new enqueue service is started on the replication

server using a failover solution (cluster, partner solution) and this replication service creates a

new lock table based on the copy of the lock table. This enables the enqueue service, and

therefore the whole SAP component, to continue operation almost without interruption. If the

enqueue service fails, transactions are no longer terminated, so that work can be continued transparently.


43

The solution is platform-independent. It can be used in the same way for both high-availability

environments and normal environments (that is, without the replication server).

SAP hardware partners provide the cluster technology for the enqueue server and its

replication server, which is required for the enqueue service to operate without interruption. To

avoid the single point of failure with the message server, this service must simply be restarted.

It can be restarted automatically within a few milliseconds using cluster technology.

7.4.3 HA and Clustering Before Virtualization

All customers in this study have secured their productive, physical SAP solution landscapes with the aid of different cluster solutions offered by different vendors.

The cluster license costs are included and aggregated in the hardware and software costs.

The initial SAP cluster installation costs are included in the SAP server and SAP software

deployment costs.

All customers usually need approximately five days to set up a two-node cluster. These

values were provided by the customers.

Customers report that in an SAP productive cluster environment they need about four

additional hours per cluster node for patching and testing a clustered SAP system. The SAP

patch procedure in an SAP cluster is described in detail in the SAP patch manuals.

New SAP patches are released at least twice a year.

Every patch scenario in an SAP cluster needs additional attention and mechanisms to

implement SAP support patches. Special database tools and procedures, virtual hostnames,

additional IP addresses, redundant SAP licenses, switching the nodes in a specific sequence,

replacing executables manually, testing, etc. are only some of the technical efforts involved. The following table shows the annual planned downtime, given the number of available

patches per year and clustered SAP central instances.


44

Annual Planned Downtime Costs for SAP Cluster Central Instances No. of

Servers

Number of

SAP

Clustered

Central Instances

Additional

Downtime

in Hours

due to a Cluster

Downtime for

SAP PRD

Hardware and

Software Maintenance in

Hours

Total

Hours

Planned

Downtime per year

Cost

Customer 1 2 1 8 8 + 16 = 24 32 $ 3,840,000

Customer 2 2 1 8 8 + 16 = 24 32 $ 3,840,000

Customer 3 5 3 24 20 + (16 * 3) = 68 92 $11,040,000

Assumptions:

SAP ERP system $120,000 downtime per hour

Two SAP patch stacks per year

Four hours downtime per server per year

Eight hours downtime per SAP patch

7.4.4 HA and Clustering After Virtualization

VMware Infrastructure offers a powerful high availability feature that allows SAP customers to

completely replace their SAP cluster implementation. In case of a VMware ESX host server

failure, all the SAP virtual machines restart on one of the available VMware ESX hosts. This

behavior can be controlled by VMware cluster settings and VMware Distributed Resource

Scheduler (DRS). With the VMware HA feature no additional activities are necessary for • SAP hostnames

• SAP IP addresses

• SAP database and tools

• SAP message server

• SAP enqueue server

• SAP licenses

• SAP cluster tests

HA also simplifies SAP patch scenarios. The following table shows the planned downtime in an

SAP cluster with VMware High Availability.

Annual Planned Downtime for SAP Infrastructure with VMware HA Customer No. of

Servers No. of SAP Clustered

Central

Instances

Additional Downtime

in Hours

due to a

Cluster

Downtime Total for SAP

PRD Hard- and

Software

Maintenance in

Hours

Total Hours Planned

Downtime

per Year

Costs

Customer 1 3 1 0 0 + 16 = 16 16 $1,920,000

Customer 2 2 1 0 0 + 16 = 16 16 $1,920,000

Customer 3 2 3 0 0 + (16 * 3) = 48 48 $5,760,000

Assumptions:

Two SAP patch stacks per year


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Four hours downtime per server per year

Eight hours downtime per SAP patch

7.4.5 Summary of SAP clustering and VMware high availability

VMware mechanisms such as VMotion and HA can reduce planned downtime for hardware and

software maintenance by up to 50 percent.

Comparison of Annual Planned Downtime and Costs* Customer Before

Virtualization

in Hours

After

Virtualization

in Hours

Saving in

Hours

Saving in

%

Contribution

to TCO

Savings**

Customer 1 32 16 16 50 30% $ 576,000

Customer 2 32 16 16 50 30% $ 576,000

Customer 3 92 48 44 48 30% $1,584,000

*SAP ERP system $120,000 downtime per hour

**30% contribution to TCO, see above

7.5 SAP Front End Client Systems

SAP software has evolved from mainframe computing to three-tier architecture consisting of

the database layer, application (business logic) layer, and user interface layer. The advantage of

having a client-server architecture is the possibility of making changes or scaling one layer

without having to retool the whole system.

The SAP product name R/3 stands for “runtime system three” and the client-server

environment provides a set of business applications for the system. The R/3 architecture allows

distribution of the workload to multiple PCs connected in a network. The SAP runtime system is

designed in such a way that it distributes the presentation layer, application logic, and the data

management to different computers.

In our study the customers have between 100 and 400 SAP end users, most of them using

Microsoft Windows-based PCs. The front end application installed and used for SAP systems is

called the SAP GUI, SAP logon(PAD).

Each PC usually needs to be replaced every three years. In the meantime, they require hands-on

additions and changes, operating system and application patches, upgrades, security, configuration and user management, service activities, support and administration.

7.5.1 Client Systems Before Virtualization

According to a 2006 Gartner survey, a typical desktop in the SAP environment costs $488 per

PC per year to manage and support.

Annual TCO Comparison of PCs with Server-based Computing PC Technical Services Current (As Is) Annual Cost per Desktop

User Adds and Changes $ 11

Hardware Configuration $ 26

Hardware Deployment $ 7

Software Deployment $ 121


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Application Management $ 32

Backup, Recovery, Archiving $ 7

Service Desk $ 239

Security Management $ 30

IT Administration $ 15

Total per desktop per Year $488

Source: Gartner June 15, 2006

The costs over three years for a PC are $1,464.

Only Customer 3 with approximately 100 SAP end users deployed VMware Desktop

Infrastructure (VDI) for the SAP logon application.

Annual Costs for SAP PCs with VMware VDI Customer Number of Concurrent SAP

Users

Annual Cost for all PCs

Customer 1 400 $195,200

Customer 2 200 $ 97,600

Customer 3 100 $ 48,800

7.5.2 Capital Investment in VMware VDI

Pricing for VMware VDI is based on a list price of $150 per concurrent user and is packaged into

two bundled offerings: the VMware VDI Starter Edition and the VMware VDI Bundle 100 Pack.

Both bundles include VMware Infrastructure Enterprise Edition for VDI (which consists of

VMware ESX 3.5 and VMware vCenter 2.5) and the VMware Virtual Desktop Manager 2. The VMware VDI Starter Edition, which covers 10 virtual desktops, has a list price of $1,500.00.

We calculated the cost of VDI based on the VMware Bundle 100 Pack for Customer 3. The

VMware VDI Bundle 100 Pack includes 100 virtual desktops for the list price of $15,000.

Customers may add additional licenses by purchasing in increments of 10, based on the list

price of $150 per concurrent user. The following tables show the costs for the VDI Bundle 100

Pack as well as the costs for additional infrastructure hardware.

Software Investment in VMware VDI over Three Years

Number Cost

VMware VDI Software 100 $15,000

Total $15,000

Source: VMware price information

Cost of Additional Hardware Required for VDI over Three Years

Additional Components Description Number Cost

ESX host servers 2 * Quad Core,32 GB

RAM

1 $ 22,500

SAN 2 Ports per ESX 4 $ 4,400

10 GB per user Central Storage per

User

100 *10 =1TB $ 6,000

Total $32,900


47

7.5.3 Client Systems After Virtualization

With VMware VDI, customers can avoid expenditures to refresh SAP front end desktop PCs.

Pricing for VMware VDI in our analysis is based on a list price of $150 per concurrent user. The

following table shows that the reduction in annual cost per client system with VMware VDI is US$274.00

Annual TCO Comparison of PCs with VMware VDI

PC Technical Services Reduction with

VDI in %

Annual cost per desktop in with

VMware VDI

User Adds and Changes 80 $ 2

Hardware Configuration 30 $ 18

Hardware Deployment 30 $ 5

Software Deployment 60 $ 49

Application Management 30 $ 22

Backup, Recovery, Archiving 100 $ 0

Service Desk 60 $ 96

Security Management 50 $ 15

IT Administration 50 $ 7

Total per desktop per year $ 214

The following table shows the calculated three year cost savings for Customer 3 with 100 SAP

front end users before and after virtualization.

Customer Costs before

Virtualization Costs after

Virtualization Savings Saving in %

Customer 3 $146,400 $112,100 $34,300 23

7.6 SAP Upgrades and Patches

VMware snapshot technology is a very fast backup and recovery tool for existing SAP systems.

This tool provides the UNDO button for faulty and incomplete SAP upgrades and SAP patch

scenarios.

VMware hot clone technology offers a complete system cloning mechanism for pre-testing

upgrades and SAP patches, while the SAP system is still up and running.

From a technical point of view, the process for performing SAP upgrades and SAP patches are

similar. Both maintenance functions use the same SAP tools and transport mechanisms. These

procedures manipulate database dictionary information, executables, and customizing tables.

To minimize downtime, both allow import of new data and patches while end users are still working and processing transactional or master data.

The following diagram illustrates SAP procedure for importing inactive sources.


48

Source: SAP

All three customers use this function to minimize downtime. But in case of an unsolvable error,

a backup must be applied to recover the system to the starting point. In this case, user data

created in the uptime phase can be lost.

At the start of an SAP patch or upgrade installation, an online backup of the database is

performed, which is only consistent in combination with the database transaction logs. A 500

GB database takes approximately five hours for such a disk backup. In many enterprises a

specific department is responsible for backup and recovery practices involved in SAP patches

and upgrade scenarios.

7.6.1 Upgrades and Patches Before Virtualization

An SAP upgrade typically occurs only once in three years. In a traditional SAP upgrade scenario,

first the SAP DEV system, then the SAP QAS and finally the SAP PRD are upgraded. The

following table shows a time calculation for an SAP upgrade in a productive physical SAP environment with a 500 GB database before the environment was virtualized. The partner

company that was responsible for this SAP upgrade provided the report on the number of days

required.

SAP upgrade scenarios Customer No. of Systems in an

SAP Landscape

No. of SAP Landscapes Days in Total

Customer 1 5 1 17

Customer 2 3 1 11

Customer 3 2 3 24

SAP DEV – 5 days – First system – More days for preparation and troubleshooting

SAP QAS – 3 days – Experienced SAP upgrade

SAP PRD – 3 days – Experienced SAP upgrade

SAP Other – 3 days– Experienced SAP upgrade


49

One customer had a problem with the upgraded SAP DEV system, because several items of

data necessary for testing the new SAP release were missing. Typically, before an SAP upgrade,

customers perform a classical SAP system copy from SAP PRD to SAP DEV. The time required

for this process is not accounted for in the table above.

7.6.2 Upgrades and Patches After Virtualization

The customers were able to use a new upgrade strategy in the virtualized environment with

VMware cloning and snapshot technology. During the process, running SAP production

systems were cloned into an empty virtual machine. The upgrade was tested in this new virtual

machine and any errors were analyzed. After successfully upgrading the system, the customizer

and developer made the new SAP release adjustments in the non-critical virtual machine,

recording the changes into SAP change requests. This can be done over a longer time period

without time pressure.

Once the system had met all customer requirements, the productive system was upgraded.

Afterwards all recorded SAP change requests were applied. Then, instead of making SAP

system copies, the data of the productive SAP system was exported and imported to the test

systems.

There are three advantages to using this scenario:

• Time and cost savings

• Consistent SAP system landscape

• No time limitations for developer and customizer

The following table shows the time usage for this new upgrade procedure for a three-system

SAP landscape.

New SAP Upgrade Procedure with VMware Technology

Customer 1 Project

Sequence

SAP System Procedure VMware /

SAP

Days

Step 1 PRD HOT Clone PRD2 1

Step 2 PRD 2 SAP Upgrade 5

Step 3 PRD 2 Development /

Customizing

Varies; not time-

critical; parallel to

PRD

Step 4 PRD SAP Upgrade 3

Step 5 QAS SAP Export/Import 1

Step 6 DEV SAP Import* 1

Step 7 EDU SAP Import* 1

Step 8 TST SAP Import* 1

Total Days 13

* Export not necessary anymore


50

We gathered the following data before and after virtualization for one of the customer projects.

Initial Cost and Time Savings in SAP Upgrade Projects SAP

Upgrade

SAP Systems

for Upgrade

Days Before

Virtualization

Days After

Virtualization

Saving

in Days

Savings* Savings

in %

Customer 1 5 17 13 4 $9,600 24

*Fee of $2,400 per day for an SAP Consultant


51

8 TCO Reduction: Three Case Studies This chapter provides detailed information about the TCO savings and ROI achieved by three

customers using VMware Infrastructure combined with powerful multi-core x86 hardware to

virtualize their SAP systems.

The calculation in the following tables shows costs both with and without SAP planned

downtime reductions that were achieved by replacing clusters with VMware HA and reducing

planned downtime for hardware maintenance with VMware VMotion. Many customers argue

that planned downtime is free of charge as it is reserved in the SLAs as a maintenance task.

Nevertheless, productive time can be gained back by reducing planned downtime. A company

with worldwide production facilities can do business during this time that would have been lost

before virtualization was in place.

8.1 TCO and ROI Summary for Customer 1

As shown in the following tables, Customer 1 achieved an 81 percent reduction in overall total

cost of ownership over three years, and the return on investment period for the virtualization

project was three months.

Customer 1 Three-Year TCO

Without VMware

Infrastructure

With VMware

Infrastructure Savings

Direct Costs

Investment Virtualization Check $ - $ 7,000 $ (7,000)

Investment SAP P2V $ - $ 24,000 $ (24,000)

Investment Training $ - $ 13,500 $ (13,500)

Investment Hardware

- Includes Hardware Maintenance

- Includes Network Costs

- Includes OS, Cluster

- Includes VMware Licenses

- Includes HBAs $ 1,888,842 $ 241,326 $ 1,647,516

SAP Deployment $ 7,515 $ 4,523 $ 2,992

SAP Upgrade $ 40,800 $ 31,200 $ 9,600

Total Direct Costs $ 1,937,157 $ 321,549 $ 1,615,608

Indirect Costs

Power Costs $ 27,063 $ 25,386 $ 1,677

Cooling Costs $ 27,063 $ 25,386 $ 1,677

SAP Frontends VDI $ - $ - $ -

SAP Planned Downtime $ - $ - $ -

Total Indirect Costs $ 54,126 $ 50,772 $ 3,354

Total Cost of Ownership $ 1,991,283 $ 372,321 $ 1,618,962


52

Customer 1 Return On Investment

Year 1 Year 2 Year 3

Investments

Investment Virtualization Check $ 7,000 $ $

Investment SAP P2V $ 24,000 $ $

Investment Training $ 13,500 $ $

Investment Hardware




- VMware Licenses

- Includes HBAs $ 235,726 $ 2,800* $ 2,800*

Total Investments $ 280,226 $ 2,800 $ 2,800

Savings

Server Hardware $ 1,647,516 $ $

SAP Deployment $ 2,992

SAP Upgrade $ 9,600

Power Cost $ 559 $ 559 $ 559

Cooling Cost $ 559 $ 559 $ 559

SAP Frontend VDI $


Total Savings $ 1,661,226 $ 1,118 $ 1,118

Total Cumulative Investments $ 280,226 $ 283,026 285,826

Total Cumulative Savings $ 1,661,226 $ 1,662,334 $ 1,663,462

Total Return on Investment 593% 587% 582%

ROI Time Frame

(in months) 3

*VMware software maintenance (25 percent Platinum) cost per year


53

8.2 TCO and ROI Summary for Customer 2

As shown in the following tables, Customer 2 achieved an 83 percent reduction in overall total

cost of ownership over three years, and the return on investment period for the virtualization

project was two months.

Customer 2 Three-Year TCO

Without VMware

Infrastructure

With VMware


Direct Costs




Investment Hardware




- VMware Licenses

- Includes HBAs $ 732,660 $ 82,182 $ 650,478

SAP Deployment $ 5,625 $ 2,858 $ 2,767

SAP Upgrade $ - $ - $ -

Total Direct Costs $ 738,285 $ 115,440 $ 622,845

Indirect Costs

Power Costs $ 16,923 $ 8,094 $ 8,829

Cooling Costs $ 16,923 $ 8,094 $ 8,829

SAP Frontends $ - $ - $ -



Total Cost of Ownership $ 772,131 $ 131,628 $ 640,503


54

Customer 2 Return On Investment en Investment for


Investments




Investment Hardware




- VMware Licenses

- Includes HBAs $ 79,382 $ 1,400* $ 1,400*


Savings

Server Hardware $ 732,660 $ $


SAP Upgrade $

Power Cost $ 2,943 $ 2,943 $ 2,943

Cooling Cost $ 2,943 $ 2,943 $ 2,943

SAP Frontend VDI $


Total Savings $ 741,313 $ 5,886 $ 5,886

Total Cumulative Investments $ 109,782 $ 111,182 $ 112,582

Total Cumulative Savings $ 741,313 $ 747,199 $ 753,085


ROI Time Frame

(in months) 2

* VMware software maintenance (25 percent Platinum) cost per year


55

8.3 TCO and ROI Summary for Customer 3 without VMware VDI

As shown in the following tables, Customer 3 achieved a 49 percent reduction in overall total

cost of ownership over three years for its SAP data center, and the return on investment period

for the virtualization project was six months. These figures do not include the customer’s

desktop virtualization project TCO and ROI.

Customer 3 Three-Year TCO Without VDI

Without VMware

Infrastructure

With VMware


Direct Costs




Investment Hardware





- Includes HBA $ 198,750 $ 82,182 $ 116,568

SAP Deployment $ 13,545 $ 4,276 $ 9,269


Total Direct Costs $ 212.295 $ 112.358 $ 99.937

Indirect Costs

Power Costs $ 20,235 $ 8,094 $ 12,141

Cooling Costs $ 20,235 $ 8,094 $ 12,141






56

Customer 3 Return On Investment Without VDI Year 1 Year 2 Year 3

Investments




Investment Hardware




- VMware Licenses

- Includes HBAs $ 79,382 $ 1,400* $ 1,400*


Savings



SAP Upgrade $

Power Cost $ 4,047 $ 4,047 $ 4,047

Cooling Cost $ 4,047 $ 4,047 $ 4,047

SAP Frontend VDI $ - $ - $ -

SAP Planned Downtime $ - $ -

Total Savings $ 220,389 $ 8,094 $ 8,094




ROI Time Frame

(in months) 6



57

8.4 TCO and ROI Summary for Customer 3 with VMware VDI

As shown in the following tables, Customer 3 achieved a 40 percent reduction in overall total

cost of ownership over three years for its SAP front end client deployment with VMware VDI,

and the return on investment period for this part of the virtualization project was six months.

Customer 3Three-Year Total Cost of Ownership with VDI

Without VMware

VDI

With VMware

VDI Savings

Direct Costs

Investment Virtualization Check $ - $ 7,000 $ (7000)



Investment Hardware





- Includes HBA $ 198,750 $ 82,182 $ 116,568

SAP Deployment $ 13,545 $ 4,276 $ 9,269



Indirect Costs

Power Costs $ 20,235 $ 8,094 $ 12,141

Cooling Costs $ 20,235 $ 8,094 $ 12,141

SAP Frontends $ 146,400 $ 112,100 $ 34,300





58

Customer 3 Return on Investment with VDI


Investments




Investment Hardware

Includes Hardware Maintenance

Includes Network Costs

Includes OS, Cluster VMware Licenses

Includes HBAs $ 79,382 $ 1,400* $ 1,400*


Savings



SAP Upgrade $

Power Cost $ 4,047 $ 4,047 $ 4,047

Cooling Cost $ 4,047 $ 4,047 $ 4,047

SAP Frontend VDI $ 11,433 $ 11,433 $ 11,433

SAP Planned Downtime $

Total Savings $ 231,822 $ 19,527 $ 19,527




ROI Time Frame

(in months) 6



59

8.5 Customer 1 TCO /ROI Summary with Planned Downtime Costs

As shown in the following tables, when costs of planned downtime are included in the analysis

Customer 1 achieved a 61 percent reduction in overall total cost of ownership over three years,

and the return on investment period was two months.

Customer 1 Three-Year Total Cost of Ownership

Without VMware

Infrastructure

With VMware


Direct Costs




Investment Hardware





- Includes HBAs $ 1,888,842 $ 241,326 $ 1,647,516

SAP Deployment $ 7,515 $ 4,523 $ 2,992

SAP Upgrade $ 40,800 $ 31,200 $ 9,600

Total Direct Costs $ 1,937,157 $ 321,549 $ 1,615,608

Indirect Costs

Power Costs $ 27,063 $ 25,386 $ 1,677

Cooling Costs $ 27,063 $ 25,386 $ 1,677

SAP Frontends VDI $ - $ - $ -

SAP Planned Downtime* $ 3,456,000 $ 1,728,000 $ 1,728,000

Total Indirect Costs $ 3,510,126 $ 1,778,772 $ 1,731,354

Total Cost of Ownership $ 5,447,283 $ 2,100,321 $ 3,346,962

* see chapter 7.4.5


60

Customer 1 Return on Investment Including Costs of Planned

Downtime


Investments




Investment Hardware




- VMware Licenses

- Includes HBAs $ 235,726 $ 2,800* $ 2,800*


Savings

Server Hardware $ 1,647,516 $ $


SAP Upgrade $ 9,600

Power Cost $ 559 $ 559 $ 559

Cooling Cost $ 559 $ 559 $ 559

SAP Frontend VDI $

SAP Planned Downtime $ 576,000 $ 576,000 $ 576,000

Total Savings $ 2,237,226 $ 577,118 $ 577,118




ROI Time Frame

(in months) 2



61




and the return on investment period was two months.

Customer 2 Three-Year Total Cost of Ownership

Without VMware

Infrastructure

With VMware


Direct Costs




Investment Hardware




- VMware Licenses

- Includes HBAs $ 732,660 $ 82,182 $ 650,478

SAP Deployment $ 5,625 $ 2,858 $ 2,767



Indirect Costs

Power Costs $ 16,923 $ 8,094 $ 8,829

Cooling Costs $ 16,923 $ 8,094 $ 8,829





* see chapter 7.4.5


62

Customer 2 Return On Investment including Costs of Planned

Downtime


Investments




Investment Hardware




- VMware Licenses

- Includes HBAs $ 79,382 $ 1,400* $ 1,400*


Savings



SAP Upgrade $

Power Cost $ 2,943 $ 2,943 $ 2,943

Cooling Cost $ 2,943 $ 2,943 $ 2,943

SAP Frontend VDI $

SAP Planned Downtime $ 576,000 $ 576,000 $ 576,000

Total Savings $ 1,317,313 $ 581,886 $ 581,886


Total Cumulative Savings $ 1,317,313 $ 1,899, 199 $ 2,481,085


ROI Time Frame

(in months) 2



63




and the return on investment period was one month.

Customer 3 Three-Year Total Cost of Ownership of

Without VMware

Infrastructure

With VMware


Direct Costs




Investment Hardware





- Includes HBA $ 198,750 $ 82,182 $ 116,568

SAP Deployment $ 13,545 $ 4,276 $ 9,269



Indirect Costs

Power Costs $ 20,235 $ 8,094 $ 12,141

Cooling Costs $ 20,235 $ 8,094 $ 12,141

SAP Frontends $ $ $




* see chapter 7.4.5


64

Customer 3 Return On Investment Including Costs of Planned

Downtime


Investments




Investment Hardware




- VMware Licenses

- Includes HBAs $ 79,382 $ 1,400* $ 1,400*


Savings



SAP Upgrade $

Power Cost $ 4,047 $ 4,047 $ 4,047

Cooling Cost $ 4,047 $ 4,047 $ 4,047

SAP Frontend VDI $ - $ - $ -

SAP Planned Downtime $ 1,584,000 $ 1,584,000 $ 1,584,000

Total Savings $ 1,804,389 $ 1,592,094 $ 1,592,094




ROI Time Frame

(in months) 1



65

8.8 Customer 3 TCO /ROI Summary with Planned Downtime Costs and

VMware VDI

As shown in the following tables, when VMware VDI and costs of planned downtime are

included in the analysis Customer 3 achieved a 48 percent reduction in overall total cost of

ownership over three years, and the return on investment period was one month.

Customer 3 Three-Year Total Cost of Ownership of

Without VMware

VDI With VMware

VDI Savings

Direct Costs




Investment Hardware





- Includes HBA $ 198,750 $ 82,182 $ 116,568

SAP Deployment $ 13,545 $ 4,276 $ 9,269



Indirect Costs

Power Costs $ 20,235 $ 8,094 $ 12,141

Cooling Costs $ 20,235 $ 8,094 $ 12,141

SAP Frontends $ 146,400 $ 112,100 $ 34,300




* see chapter 7.4.5


66

Customer 3 Return On Investment including Costs of Planned

Downtime and VMware VDI


Investments




Investment Hardware

Includes Hardware Maintenance Includes Network Costs

Includes OS, Cluster

VMware Licenses

Includes HBAs $ 79,382 $ 1,400* $ 1,400*


Savings



SAP Upgrade $

Power Cost $ 4,047 $ 4,047 $ 4,047

Cooling Cost $ 4,047 $ 4,047 $ 4,047

SAP Frontend VDI $ 11,433 $ 11,433 $ 11,433

SAP Planned Downtime $ 1,584,000 $ 1,584,000 $ 1,584,000

Total Savings $ 1,815,822 $ 1,603,527 $ 1,603,527



Total Return on Investment 1725% 3205 % 4647%

ROI Time Frame

(in months) 1



67

9 Virtualizing Large Enterprise Applications with VMware vSphere

VMware began delivering the next generation of VMware Infrastructure, renamed VMware

vSphere 4, in May 2009. VMware vSphere 4 delivers a number of technical enhancements

including: • More virtual processors per virtual machine (from 4 to 8)

• More virtual NICs per virtual machine (from 4 to 10)

• More memory per virtual machine (from 64 GB to 255GB)

• A 3x increase in network throughput (from 9 Gb/s to 30Gb/s)

• A 3x increase in the maximum recorded I/O operations per second (to over 300,000)

• A new maximum recorded number of transactions per second - 8,900.

• Distributed power management, which automatically assesses server bandwidth requirements of applications at various times of day. During off-peak hours, DPM consolidates virtual machines on

fewer servers and powers down unnecessary hardware.

• Thin provisioning with VMware vStorage provides dynamic storage allocation that increases automatically when needed.

• A new Fault Tolerant feature for single-processor virtual machines

This new version opens the way for customers with large SAP implementations, such as the

ones described in this study, to pursue virtualization and its TCO benefits with full confidence

that their SAP solutions will meet or even exceed performance SLAs.


68

Copyright © 2009 VMware, Inc. All rights reserved. This product is protected by U.S. and

international copyright and intellectual property laws. VMware products are covered by one or

more patents listed at http://www.vmware.com/go/patents.

VMware is a registered trademark or trademark of VMware, Inc. in the United States and/or

other jurisdictions. All other marks and names mentioned herein may be trademarks of their

respective companies.

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