What's the TCO for an OpenStack Cloud?
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This document discusses a Total Cost of Ownership (TCO) model for OpenStack clouds that was created by Red Hat. It finds that OpenStack has the lowest costs of any private cloud option on the market. The model accounts for costs across hardware, software, staffing and other areas. It analyzes how costs are reduced through automation, server density, and other factors. The document advocates for measuring and reducing virtual machine costs as clouds scale over time.
What's the TCO for an OpenStack Cloud?
- 1. ERICH MORISSE Director, Management Strategy @emorisse emorisse@redhat.com ELEPHANT IN THE ROOM WHAT’S THE TCO FOR AN OPENSTACK CLOUD? ELEPHANT IN THE ROOM WHAT’S THE TCO FOR AN OPENSTACK CLOUD? ERICH MORISSE Director, Management Strategy @emorisse emorisse@redhat.com
- 2. WHY DID WE NEED AN OPENSTACK TCO MODEL?
- 3. HOW IS THIS TCO DIFFERENT?
- 4. WE CREATED THE MOST COMPREHENSIVE AND MOST ACCURATE TCO MODEL WE CAN FIND FULL ACCOUNTING IMPACT ACROSS CASH FLOW, INCOME STATEMENT, AND BALANCE SHEET SUPPORTS MULTIPLE DISJOINT BUYING CYCLES OF HARDWARE, SOFTWARE, AND HIRING DESIGNED FOR COMPARATIVE DECISION MAKING HOW WE BUILT IT
- 5. SHOW ME THE MONEY!!!!
- 6. OPENSTACK IS THE LOWEST COST PRIVATE CLOUD ON THE MARKET. OPENSTACK IS THE LOWEST COST PRIVATE CLOUD ON THE MARKET.
- 7. NO MATTER HOW YOU GROW, OPENSTACK REMAINS THE LEAST EXPENSIVE OPTION NO MATTER HOW YOU GROW, OPENSTACK REMAINS THE LEAST EXPENSIVE OPTION
- 8. YEAR 1 2 3 WE LOOKED AT A LOT OF GROWTH CURVES VIRTUALMACHINES YEAR 1 2 3 YEAR 1 2 3YEAR 1 2 3
- 9. YEAR 1 2 3 WE LOOKED AT A LOT OF GROWTH CURVES VIRTUALMACHINES YEAR 1 2 3 YEAR 1 2 3YEAR 1 2 3
- 10. OPENSTACK VS. ? OPENSTACK AGAINST NON-OPENSTACK-BASED SOLUTIONS FOR PRIVATE CLOUD COMPUTING (e.g., server virtualization + automation) UPSTREAM AGAINST COMMERCIAL DISTRIBUTION
- 12. SERVER ADMINISTRATORS SERVER ENGINEERS STORAGE ADMINS NETWORKING STAFF SUBSCRIPTIONS LICENSES COSTS CONSIDERED SERVERS STORAGE NETWORKING
- 13. CLOUD SOLUTION IT AUTOMATION VM DENSITY SOFTWARE PEOPLE HARDWARE HOW COSTS ARE MITIGATED
- 15. Configuration and Change Management Virtual Infrastructure Capacity and Performance Management Chargeback Self-Service Provisioning and Service Catalog Orchestration ExternalCloudBrokering Cloud Management Platform Virtual Infrastructure Manager IaaS Cloud Manager https://www.redhat-cloudstrategy.com/when-and-why-openstack-needs-a-cloud-management-platform/
- 20. Red Hat Cloud Infrastructure $12,374 $6,869 $5,089 $4,556 $4,164 $4,006 Non-OpenStack Cloud $14,663 $8,307 $6,392 $5,824 $5,379 $5,281
- 21. Red Hat Cloud Infrastructure $1.2M $2.6M $4.6M $8M $15M $27.8M Non-OpenStack Cloud $1.3M $2.8M $5.1M $9.3M $17.1M $32.3M
- 22. $200,400 $250,400 $436,000 $853,600 $1,611,200 $3,392,000
- 23. $200,400 $450,800 $886,800 $1,740,400 $3,351,600 $6,743,600
- 24. OPENSTACK CAN SAVE YOU MILLIONS OF DOLLARS
- 25. SO, HOW TO OBTAIN THE MOST FROM OPENSTACK? SO, HOW TO OBTAIN THE MOST FROM OPENSTACK?
- 26. AUTOMATION HAS THE MOST SIGNIFICANT IMPACT ON COST AUTOMATION HAS THE MOST SIGNIFICANT IMPACT ON COST
- 27. HIGH AUTOMATION DOUBLES OS INSTANCES PER ADMIN DOUBLE YOUR SERVICE WITHOUT KILLING YOUR ADMINS ! “Server Support Staffing Ratios,” Computer Economics, Inc.
- 28. 28 DEMAND ON SYSADMINS IS INCREASING EXPONENTIALLY 7,721,175 NEW LOGICAL SERVERS 11,250 NEW JOBS FOR COMPUTER ADMINS IDC: Worldwide Cloud IT Infrastructure Hardware Spending Forecast, 2015–2019 Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition (probably a lot worse because does not include containers)
- 29. Upstream $15,998 $9,666 $7,951 $7,258 $6,788 $6,649 Commercial Distribution $13,609 $8,043 $6,264 $5,909 $5,340 $5,200 Commercial with CMP $12,374 $6,869 $5,089 $4,556 $4,164 $4,006
- 30. AUTOMATION COSTS AN ADDITIONAL $53 PER VM BUT GIVES 20x ROI (OR MORE) EVEN IN A MATURE CLOUD (YEAR 5 SHOWN) RHELOSP RHCI AUTOMATION COST $53 $1,229 SAVINGS PERVMLOADEDCOST
- 32. VM COST IS A BETTER INDICATOR OF HEALTH OF CLOUD THAN TOTAL COSTS
- 33. VM COSTS DEPEND ON TIMING 33 YEAR ‘14 ‘15 ‘16 ‘17 ‘18
- 35. TOTAL COSTS HIDE VM COST IMPROVEMENTS
- 36. YOU ARE SUCCESSFUL IF VM COSTS DECREASE AND CLOUD COSTS RISE YOU ARE SUCCESSFUL IF VM COSTS DECREASE AND CLOUD COSTS RISE
- 37. LOWERING VM COSTS WILL INCREASE USAGE AND INCREASE TOTAL COSTS LOWERING VM COSTS WILL INCREASE USAGE AND INCREASE TOTAL COSTS
- 38. $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ $$$ $$$$$$$ REDUCING PRICE CAUSES MORE USE AND HIGHER TOTAL COSTS $1 $1 $0.20
- 39. DENSITY HAS A LOW IMPACT ON VM COST DENSITY HAS A LOW IMPACT ON VM COST
- 40. INCREASING DENSITY MEANS BUYING LESS HARDWARE =
- 41. COSTPERVM
- 42. YOU DID WELL, OPENSTACK IS A GOOD CHOICE! NOW YOU HAVE TO DO YOUR HOMEWORK...
- 43. IMPLEMENT AUTOMATION. IT’S MORE IMPORTANT THAN DENSITY MEASURE AND TRACK VM COSTS EXPECT GROWTH, NOT SAVINGS
- 44. WHAT CAN YOU CHANGE IN THE MODEL?
- 45. ASSUMPTIONS 1. VM as unit for cost 2. 3 year, straight-line depreciation 3. salaries are identical by job across technologies 4. Server specs 5. Recruiting vs internal hire ratio 1. Software costs at list 2. VM/admin & VM/server ratios 3. Automation benefits 4. Server and VM costs 5. Employment time 6. Salary and loaded salary bands 7. Network ports per admin 8. Storage per admin INDUSTRY DATA
- 46. So, Um. What if we “Open Sourced” This? WANT TO HELP CREATE THE WHOLE MODEL? WANT A REUSABLE, TUNABLE, TOOL SHOWING THE VALUE OF PRIVATE CLOUD TO YOU? LET US KNOW HOW YOU’D LIKE TO CONTRIBUTE! https://www.redhat-cloudstrategy.com/opentco
- 47. MORE THAN JUST LINUX.