VMware, Red Hat and Microsoft currently better value than OpenStack distributions for TCO: 451 Research

| May 3, 2015

451 Research launched its latest Cloud Price Index, the most rigorous and comprehensive analysis of the cost of cloud computing. For the first time in the industry, buyers have complete transparency into the complex pricing models of both public and private clouds, analysis of the total cost of ownership, and insight into the ‘golden ratios’ that determine when private or public cloud options become better value.

According to 451 Research, for equivalent solutions, commercial software vendors currently have TCO advantages over OpenStack due to the high cost and low supply of skilled OpenStack engineers.

The typical cost of small-scale enterprise private clouds powered by VMware, Red Hat and Microsoft are all within half a cent of each other at about $0.10 per virtual-machine hour while OpenStack distributions cost, on average, $0.08 per VM hour, a 20% saving, the researchers said. But when factoring other elements, including the scarcity of OpenStack skills, 451 Research believes that for a typical deployment, buyers could hire 3% more engineers to support a commercial cloud environment, and still have a lower cost of ownership compared to an OpenStack distribution.

“Finding an OpenStack engineer is a tough and expensive task that is impacting today’s cloud-buying decisions. Commercial offerings, OpenStack distributions and managed services all have their strengths and weaknesses, but the important factors are features, enterprise readiness and the availability of specialists who understand how to keep a deployment operational. Buyers need to balance all of these aspects with a long-term strategic view – as well as TCO – to determine the best course of action for their needs,” said 451 Research senior analyst Dr. Owen Rogers.

“Decisions also need to include the risks associated with lock-in should prices rise, support dwindle or features be decommissioned. As OpenStack matures and the pool of available engineering staff increases, buyers can expect the TCO of deploying OpenStack to improve.”

Golden Ratios

The value of managed and public clouds compared to self-managed implementations depends on how many virtual machines a team of engineers is able to successfully support. Using the CPI, 451 Research has analyzed the ‘golden ratio’ of how many virtual machines a team of engineers must be able to support on a private cloud for a TCO advantage to be achieved in a small-scale enterprise scenario. If a private cloud is being successfully operated with a ratio of at least one engineer to about 100 virtual machines, it may be deriving better TCO than the averagely-priced managed private cloud. If each engineer is not able to fully support this minimum amount, an average managed cloud is likely to be cheaper. For mission-critical, resource-intensive workloads installed on a private cloud, this ratio might not be achieved, and thus managed services offer better TCO.

The low price of public cloud relative to the average private cloud price makes this ratio even larger. For a small-scale self-managed enterprise private cloud to be cheaper than public cloud, the golden ratio is at least 250 virtual machines per engineer. However, due to the huge variation in price between quotations received, both ratios will depend on the price quoted by each provider – some managed private cloud quotations were cheaper than public cloud. Considering the security, regulatory and control benefits of private cloud, paying more for private can certainly be worthwhile for mission-critical environments.

 

Source: The Data Center Journal451 Research Cloud Price Index: Private Edition—VMware, Red Hat and Microsoft Currently Better Value Than OpenStack Distributions for Total Cost of Ownership – The Data Center Journal

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Category: Applications, Cloud computing, Green ICT, Press release

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