What's the TCO for an OpenStack Cloud?
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ERICH MORISSEDirector, Management Strategy
@emorisse
ELEPHANT IN THE ROOMWHAT’S THE TCO FOR AN OPENSTACK CLOUD?
ELEPHANT IN THE ROOMWHAT’S THE TCO FOR AN OPENSTACK CLOUD?
ERICH MORISSEDirector, Management Strategy
@emorisse
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WHY DID WE NEED AN OPENSTACK
TCO MODEL?
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HOW IS THIS TCO DIFFERENT?
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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
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SHOW ME THE MONEY!!!!
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OPENSTACK IS THE LOWEST COST PRIVATE CLOUD ON THE MARKET.OPENSTACK IS THE LOWEST COST PRIVATE CLOUD ON THE MARKET.
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NO MATTER HOW YOU GROW, OPENSTACK REMAINS THE LEAST EXPENSIVE OPTION
NO MATTER HOW YOU GROW, OPENSTACK REMAINS THE LEAST EXPENSIVE OPTION
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YEAR 1 2 3
WE LOOKED AT A LOT OF GROWTH CURVESV
IRTU
AL
MA
CH
INES
YEAR 1 2 3 YEAR 1 2 3 YEAR 1 2 3
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YEAR 1 2 3
WE LOOKED AT A LOT OF GROWTH CURVESV
IRTU
AL
MA
CH
INES
YEAR 1 2 3 YEAR 1 2 3 YEAR 1 2 3
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OPENSTACK VS. ?
OPENSTACK AGAINST NON-OPENSTACK-BASED SOLUTIONS FOR PRIVATE CLOUD COMPUTING (e.g., server virtualization + automation)
UPSTREAM AGAINST COMMERCIAL DISTRIBUTION
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SOFTWARE
PEOPLE
HARDWARE
COSTS CONSIDERED
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SERVER ADMINISTRATORS
SERVER ENGINEERS
STORAGE ADMINS
NETWORKING STAFF
SUBSCRIPTIONS
LICENSES
COSTS CONSIDERED
SERVERS
STORAGE
NETWORKING
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CLOUD SOLUTION
IT AUTOMATION
VM DENSITY
SOFTWARE
PEOPLE
HARDWARE
HOW COSTS ARE MITIGATED
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Configuration and Change Management
Virtual Infrastructure
Capacity and Performance Management
Chargeback
Self-Service Provisioning and Service Catalog
Orc
hes
trat
ion
Ext
ern
al C
lou
d B
roke
rin
g
Cloud Management Platform
Virtual Infrastructure Manager
IaaS CloudManager
https://www.redhat-cloudstrategy.com/when-and-why-openstack-needs-a-cloud-management-platform/
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Red Hat Cloud Infrastructure $12,374 $6,869 $5,089 $4,556 $4,164 $4,006Non-OpenStack Cloud $14,663 $8,307 $6,392 $5,824 $5,379 $5,281
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Red Hat Cloud Infrastructure $1.2M $2.6M $4.6M $8M $15M $27.8MNon-OpenStack Cloud $1.3M $2.8M $5.1M $9.3M $17.1M $32.3M
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$200,400 $250,400 $436,000 $853,600 $1,611,200 $3,392,000
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$200,400 $450,800 $886,800 $1,740,400 $3,351,600 $6,743,600
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OPENSTACK CAN SAVE YOU MILLIONS OF DOLLARS
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SO, HOW TO OBTAIN THE MOSTFROM OPENSTACK?
SO, HOW TO OBTAIN THE MOSTFROM OPENSTACK?
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AUTOMATION HAS THE MOST SIGNIFICANT IMPACT ON COSTAUTOMATION HAS THE MOST SIGNIFICANT IMPACT ON COST
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HIGH AUTOMATION DOUBLES OS INSTANCES PER ADMINDOUBLE YOUR SERVICE WITHOUT KILLING YOUR ADMINS
!
“Server Support Staffing Ratios,” Computer Economics, Inc.
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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, 2015–2019Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition
(probably a lot worse because does not include containers)
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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
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AUTOMATION COSTS AN ADDITIONAL $53 PER VM
BUT GIVES 20x ROI (OR MORE)
EVEN IN A MATURE CLOUD
(YEAR 5 SHOWN) RH
ELO
SP
RH
CI
AUTOMATION COST $53
$1,229SAVINGS
PER
VM
LO
AD
ED C
OST
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https://www.redhat-cloudstrategy.com/why-did-red-hat-acquire-ansible/
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VM COST IS A BETTER INDICATOR OF HEALTH OF CLOUD THAN TOTAL COSTS
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VM COSTS DEPEND ON TIMING
33
YEAR ‘14 ‘15 ‘16 ‘17 ‘18
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TOTAL COSTS HIDE VM COST IMPROVEMENTS
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YOU ARE SUCCESSFUL IFVM COSTS DECREASE ANDCLOUD COSTS RISE
YOU ARE SUCCESSFUL IFVM COSTS DECREASE ANDCLOUD COSTS RISE
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LOWERING VM COSTS WILLINCREASE USAGE AND INCREASE TOTAL COSTS
LOWERING VM COSTS WILLINCREASE USAGE AND INCREASE TOTAL COSTS
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$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$$$$ $$$$$$$
REDUCING PRICE CAUSES MORE USE AND HIGHER TOTAL COSTS
$1$1
$0.20
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DENSITY HAS A LOW IMPACT ON VM COST
DENSITY HAS A LOW IMPACT ON VM COST
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INCREASING DENSITY MEANS BUYING LESS HARDWARE
=
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CO
ST P
ER V
M
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YOU DID WELL, OPENSTACK IS A GOOD CHOICE!
NOW YOU HAVE TO DO YOUR HOMEWORK...
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IMPLEMENT AUTOMATION. IT’S MORE IMPORTANT THAN DENSITY
MEASURE AND TRACK VM COSTS
EXPECT GROWTH, NOT SAVINGS
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WHAT CAN YOU CHANGE IN THE MODEL?
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ASSUMPTIONS
1. VM as unit for cost2. 3 year, straight-line
depreciation3. salaries are identical by job
across technologies4. Server specs5. Recruiting vs internal hire
ratio
1. Software costs at list2. VM/admin & VM/server ratios3. Automation benefits4. Server and VM costs5. Employment time 6. Salary and loaded salary
bands7. Network ports per admin8. Storage per admin
INDUSTRY DATA
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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
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MORE THAN JUST LINUX.