Virtual Servers, Real ROI

Peter Amstutz has one piece of advice for federal systems executives who are thinking about using virtualization technology to consolidate their servers: Just do it.

“It definitely pays off. You will receive cost avoidance or cost savings,” says Amstutz, chief of technical requirements and network design for the Defense Contract Management Agency. “Virtualization is a technology that is going to be inescapable.”

Within DCMA, Amstutz directs research and design efforts for new technologies such as virtualization, which lets multiple applications run concurrently on a single server. This reduces significantly the number of servers an organization might need. DCMA officials began seriously investigating virtualization technology in June 2005 following a “budget crunch,” Amstutz says.

At the time, DCMA had about 625 servers, which its 11,000 employees accessed daily for applications running on the machines. But the cost of buying more than 200 servers each year as part of the agency’s annual server refreshment threatened to exceed the planned budget. So in November 2005, the agency began buying new, virtualized servers running VMware technology. DCMA completed the project less than six months later. And instead of buying 200 new servers, the agency bought only 60 — all of which could handle the agency’s server needs.

“We went from about 625 servers to just 60,” Amstutz says. And so now, the agency only has to buy about 20 servers annually. He estimates that DCMA’s cost-avoidance savings in capital equipment alone will be about $1.25 million over the servers’ three-year life cycle. This does not include additional savings that also will accrue from reduced energy costs to run and cool the servers, or from reduced labor costs to maintain the machines.

The agency has seen other benefits as well. Server virtualization has helped DCMA consolidate its data centers from 22 to seven. Virtualization also makes it easier for the agency’s information technology staff to provision servers, migrate applications from one server to another and recover from disruptions at data centers.

“We realized that these other benefits would accompany virtualization,” Amstutz says.

Although saving energy and other green IT goals did not prompt DCMA’s virtualization initiative, agency officials anticipated that they would see significant cost savings through the data center consolidation enabled by virtualization. At one data center, for example, DCMA was paying overtime air conditioning costs of $10,000 each month to cool the servers and equipment. Amstutz has not done a formal analysis of the energy saving resulting from the data center consolidation, but he estimates that the energy costs to run and cool servers at the main data center in Carson, Calif., have been reduced 20 percent to 30 percent.

“Because the consolidation eliminated the 24 X 7 cooling and power consumption at so many of our data centers worldwide, we were able to achieve great cost savings at our facilities,” Amstutz says.

The chief challenge in implementing the virtualization technology was persuading DCMA employees that it would work. “People would ask: ‘How could you possibly run 10 Windows servers on this one box when we could barely run one?’ ” he recalls. “So we had to get people comfortable with the fact that you can run more than one server on a given piece of hardware, and that it isn’t going to cause resource issues.”

Amstutz says that after about three months, the skeptics began to recognize and accept virtualization’s value.

And now, after a year of observing virtualized servers at DCMA, Amstutz believes that other organizations soon will be embracing the technology as well. “The processor and hardware companies are putting virtualization abstraction technology into firmware, so I think it’s an inevitable fact of life that this is the way computing is going,” he says. “We’re going away from the pizza-box environment into larger servers again — sort of back to the mainframe as the pendulum swings — with the workload provision among virtual machines running on larger pieces of hardware.”