Financial Modeling for HCI/Cloud
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The document provides an analysis of financial modeling for HCI/cloud infrastructure at Twitter, highlighting the shift towards strategic project funding and measuring project success through ROI/TCO analysis. It discusses the economic advantages of Nutanix's pay-as-you-grow model, which significantly reduces costs and improves performance in virtualized environments. Case studies from organizations like St. Luke’s Healthcare System and San Mateo County demonstrate substantial ROI and operational benefits from adopting Nutanix solutions.
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“[Organizations] are realizing that their application infrastructures, which was
designed — in some cases — over 10 years ago, cannot support the demand
for the real-time analytics, development agility, deployment flexibility and
fast reconfiguration of business networks required to successfully compete
in the digital era.“ – Massimo Pezzini, Vice President and Gartner Fellow
(Gartner Press Release April 2015)
Nutanix product
development
Infrastructure Agility Improves Business Profitability](https://image.slidesharecdn.com/roi-160926194109/85/Financial-Modeling-for-HCI-Cloud-20-320.jpg)
Financial Modeling for HCI/Cloud
- 1. 1 Financial Modeling for HCI/Cloud @Twitter
- 2. 2 3-Tier Infrastructure Lens Perspective
- 3. 3 Shift perspective to strategic big picture Achieve project funding Help ensure & measure project success What is the Objective of an ROI/TCO Analysis?
- 4. 4 IDC Report: Expenses Related to Virtualization as Percent of Total Cost 33% 80% 66% 20% 1996 2014 Operating Expenses Capital Expenses Source: IDC Worldwide Ratio of Annual Server Opex to Annual Server Capex 2014 Year Operating expenses are taking over datacenter costs
- 6. 6 Example Only Traditionally assets must be purchased up front causing high waste of depreciation 3-Tier Infrastructure Economic Challenges
- 7. 7 1-Click Simplicity & Financial Enhancement
- 8. 8 New DT VMs per Year New Nodes per Year Year 1 1000 8 Year 2 1000 6 Year 3 1000 5 Year 4 1000 4 Year 5 1000 3 Nutanix “Pay as You Grow” Slashes Project Cost & Maximizes Performance
- 9. 9 IDC: Administration Time Reduced 71%
- 11. 11 vSphere AHV License Cost $3,500/CPU + SNS Inc. Management Cost vCenter $6,000 + SNS + HW Inc. Analytics Cost vRealize Operations ~$1,000/CPU + SNS? Inc. DR Cost SRM ~$300/CPU + SNS Inc. Resiliency SQL Server or Oracle + HW + set-up Inc. Design Costs Extensive for large deployment Minimal Business Disruption Costs Disruptive upgrades & 3rd party SW increase risk Very low risk TCO Variables: vSphere vs. AHV
- 13. 13 TCO: Nutanix vs. Vblock
- 14. 14 Nutanix Pay-as-Your-Grow Slashes Costs & Risk Aggregated Financial Metrics Year Physical Desktop Virtual Desktop Net Cash Flow Without Staff Costs Investment - $1,405,404 ($1,405,404) ($1,405,404) Year 1 $7,840,528 $4,144,415 $3,696,113 $3,042,630 Year 2 $7,840,528 $4,821,823 $3,018,705 $1,719,239 Year 3 $7,840,528 $4,101,510 $3,739,018 $1,793,568 Year 4 $7,840,528 $4,751,831 $3,088,698 $ 680,198 Year 5 $7,840,528 $4,201,693 $3,638,385 $1,230,335 Total $39,202,642 $23,426,676 $15,775,966 $7,060,566 ROI 1123% 502% Payback 4.6 Months 5.5 Months IRR 252% 180% VDI ROI: St. Luke’s Healthcare System
- 16. 16 “I love the new Virtual Desktop! I honestly think it is THE most successful thing that our IT department has done in the last 5 years.” - St. Luke’s physician St. Luke’s Health System – Brett Taylor
- 17. 17 County of San Mateo
- 18. 18 Nutanix Pay-as-Your-Grow Slashes Costs & Risk Aggregated Financial Metrics Year Physical Servers Virtual Servers Net Cash Flow Without Staff Costs Investment - $ 725,000 ($ 725,000) ($ 725,000) Year 1 $2,537,600 $ 39,671 $2,497,929 $2,137,929 Year 2 $2,834,400 $1,151,731 $1,682,669 $1,142,669 Year 3 $2,951,200 $ 130,175 $2,821,025 $2,281,025 Year 4 $3,068,000 $ 444,490 $2,623,010 $2,083,010 Year 5 $3,184,800 $ 505,805 $2,678,995 $2,138,995 Total $14,576,000 $ 2,997,373 $11,578,627 $9,058,627 ROI 1597% 1249% Payback 3.5 Months 4.1 Months IRR 326% 268% San Mateo County ROI Server ROI: County of San Mateo
- 19. 19 Business Drivers Trump Infrastructure Savings Business Savings Trump Infrastructure Savings
- 20. 20 “[Organizations] are realizing that their application infrastructures, which was designed — in some cases — over 10 years ago, cannot support the demand for the real-time analytics, development agility, deployment flexibility and fast reconfiguration of business networks required to successfully compete in the digital era.“ – Massimo Pezzini, Vice President and Gartner Fellow (Gartner Press Release April 2015) Nutanix product development Infrastructure Agility Improves Business Profitability
- 21. 21 83% Reduce Time Per Storage Upgrade 51% Improved Application Performance 38% Reduced Time To Release Applications $499,560 Additional Revenue from Improved Operations $190,863 Additional Revenue from Reduced Downtime ＄ ＄ IDC Validation of Business Savings
- 23. 23 ✓ Agility ✓ Predictable Scale ✓ Low Opex Revenue Forecast 2015 $6B Run Rate Public Cloud Comes Closest to the Notion of Invisible Infrastructure
- 24. 24 Source: http://www.datacommunitydc.org/blog/2013/01/gce-versus-ec2-a-comparison-of-instance-pricing- and-characteristics-part-1 Sandy Bridge 8 Core 2.6GHz 16 Hyper Threads 2 Per Core 44 EC2 Instance 2.75 Per Hyper Thread Many IT professionals do not fully understand their application’s utilization before moving to the cloud EC2 Does not Equal CPU
- 25. 25 75% vs Elasticity Predictability 25% 75% of workloads are predictable Enterprise Workloads are Heavily Weighted Towards Predictable Workloads
- 26. 26 ✓ EC2 ✓ EBS ✓ EBS w/IOPS ✓ Elastic Load Balancer ✓ Cloud Front ✓ Cloud Search ✓ Cloud Watch Alarming System Add-on Services The Gotchas in Cloud
- 27. 27 Just Migrating to Public Cloud is Expensive
- 28. 28 AWS: 141% more to run over 5 years • Total Cash Flow savings of $1,047,903 – Amazon: $1,789,962 – Nutanix: $742,059 • Equipment Supply Company Use Case Example (Actual workload) – 68 VMs of C4.4xlarge and M4.xlarge – Compute turned down during off hours • Cloud: Enterprise vs. Public $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 Option 1: AWS Option 2: Nutanix Total Cost Comparison Over 5 Years Public Cloud Costs Nutanix On-Prem Cloud Peoples Cost 141%+ Cloud: Enterprise vs. Public
- 29. 29 60 Months OpEx Spend Option 1: AWS Option 2: Azure Option 3: Nutanix Option 4: Nutanix Lease Users Supported 600,000 600,000 600,000 600,000 VM Supported 300 300 300 300 Operating Costs Depreciation Expense $0 $0 $1,442,005 $1,442,005 Maintenance Amortization $0 $0 $975,274 $975,274 Interest Expense $0 $0 $0 $163,028 Power & Cooling Expense $0 $0 $517,187 $517,187 Data Center Expense $0 $0 $34,286 $34,286 Sub-Total Operating Costs $0 $0 $2,968,752 $3,131,780 People Costs Full Time Equivelent @ $210K $8,400,000 $8,400,000 $8,400,000 $8,400,000 Sub-Total People Costs $8,400,000 $8,400,000 $8,400,000 $8,400,000 Cloud Costs Compute $3,666,060 $8,672,400 $0 $0 Storage $1,152,000 $334,200 $0 $0 Bandwidth costs $2,141,925 $963,866 $0 $0 AWS Support charges (one-time) $0 $0 $0 $0 AWS Support charges (monthly) $215,700 $60,000 $0 $0 Sub-Total Cloud Costs $7,175,685 $10,030,466 $0 $0 Total OpEx $15,575,685 $18,430,466 $11,368,752 $11,531,780 Monthly Cost per VM $865 $1,024 $632 $641 Monthly Cost per User $0.43 $0.51 $0.32 $0.32 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 Option 1: AWS Option 2: Azure Option 3: Nutanix Option 4: Nutanix Lease Total OpEx Operating Costs People Costs Cloud Costs Nutanix vs. Cloud Financial Summary
- 30. 30 92 45 42 41 39 39 38 29 27 22 VMware Cisco HP NetApp Microsof t Dell Citrix Nutanix Apple EMC Nutanix has won the NorthFace Scoreboard Award for Excellence in Service Delivery 2013, 2014 & 2015 Quantifying Support
- 31. 31 Best Buy
- 32. Thank You