Digging deeper into per VM cost analysis

I consider this pretty high level and overly general. I’ve written this more in the style of a memo form that I could provide to management as a way to help them understand the costs associated with virtual systems within our organization. Once again, pricing can and does change and the pricing listed below should not be construed to be representative of any one server/software vendor.


The current virtual environment consists of several VMware ESXi host computers that provide a distributed resource pool that is shared within the environment. This pool of resources allows for the creation of server workloads in a virtual space that are highly available, and portable. A single ESXi Host computer can provide enough resources for anywhere from 25-45 standard virtual machines.

Cost Breakdown

There are many factors that contribute to the makeup of the costs associated with the virtual servers. Network, Storage, Memory, CPU, Software Licensing and Support all contribute to costs. At its most simplistic view, and when all aspects are taken into account, a virtual machine ends up costing $340 per GB of active memory and $5 per GB of consumed disk space. The final cost for a fully licensed ESXi Host comes out to $61,700, this price reflects all aspects of the infrastructure involved with providing virtual resources. Breakdown as follows:

  • 1 Dual Socket Server with 16 Processor Cores and 256GB of Memory
  • Redundant 10GB Network Access Ports
  • Redundant 8GB Fibre Channel SAN Ports
  • 2 Terabytes of SAN Disk Space to host Virtual Machines
  • Software and support for Virtual Machine Backups (Veeam)
  • Software and support for Tivoli Storage Manager Backups (TSM)
  • Microsoft Data Center Licensing to cover all Microsoft Server Licenses
  • VMware Enterprise Plus Licensing for 2 Sockets with 3 years support
  • 3 years of hardware support

Per Virtual Machine Costs

The primary cost factors for virtual machines are the amount of memory and disk space that will be required.  Across the virtual environment, we see the average machine using 8GB of RAM, and 80GB of SAN disk space which equates to $3120 worth of resources. Further analysis will show that for virtual machines of different memory sizes, the costs for a virtual system will actually surpass those of a physical system. It’s once our consolidation ratios get higher, that the price breakdown makes more sense. One aspect to take into account is that I have not included any costs for power/cooling, and those can be significant.

Total Costs Including Network/Storage/Host/Licensing
RAM per VM Number of VMs Price Per VM































Items to Consider

Memory and disk space for our environment are the two resources that we are constrained by, that is why they are the two primary cost driving factors. These costs are broken down based on a host with a capacity of 192GB of active memory. We do not run hosts at the full 100% utilization of their allotted physical memory because of high availability/N+1 capacity restrictions. I have included the costs of all network access in this calculation, even though those resources existed before our virtual environment was fully in place. We currently have enough high speed network and fibre channel SAN connectivity to support 2 new ESXi hosts, after that, additional network and fibre channel assets will have to be procured. There are two line items for backup, this is because of limitations with virtual backups and physical RDM volumes, plus a large number of systems still use iSCSI connections to different storage tiers. ESXi5 will help with this as I plan to setup SDRS and implement a more efficient set of storage pools.


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