Microsoft Corporation

Windows Server 2012 Rapid Deployment Program

TCO Study Whitepaper

Published Date: June 2012

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ContentsExecutive Summary...................................................................................................1Administration Labor Cost Savings.............................................................................2Hardware and Infrastructure Cost Savings from Virtualization...................................4

Server Cost Savings................................................................................................4Storage and Network Cost Savings.........................................................................5

Software Cost Savings................................................................................................7Business Benefits.......................................................................................................8

System Availability..................................................................................................8User Productivity...................................................................................................10

Conclusion................................................................................................................11Appendix.................................................................................................................. 12

About This Study...................................................................................................12More Information...................................................................................................13References............................................................................................................13

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Executive SummaryIn today’s economic climate, business and technology decision makers find themselves facing a double-edged sword. IT teams are being stretched to respond to business needs as quickly as possible. Also, there is now a much greater pressure in justifying an organization’s technology spending. Microsoft’s® latest server operating system, Windows Server 2012, helps address these central business and IT challenges with a scalable, manageable, and cost-effective server platform.

More than 50 early adopter organizations (“early adopters”) that participated in a Rapid Deployment Program (“RDP”) for Windows Server 2012 were asked to share their experiences using the product. Participants from several different industries and geographies came to Windows Server 2012 looking to find IT improvements in a variety of scenarios, which mapped to the following key Windows Server 2012 pillars:

Beyond Virtualization

Participants focused on Windows Server 2012’s Hyper-V enhancements and private cloud capabilities.

Power of Many Servers, the Simplicity of One

Participants evaluated Windows Server 2012’s continuously available and efficiently manageable server, storage, and network capabilities.

Modern Work Style, Enabled

Participants tested Windows Server 2012’s direct access capabilities for their mobile and distributed workforce.

Every App, Any Cloud

Participants focused on Windows Server 2012’s open application and Web platform scalability features.

Through new product features and enhancements in Windows Server 2012, early adopters expect to realize one-time and ongoing cost savings across these key areas:

Administration Labor Cost Savings

Approximately U.S.$220,000 in labor cost savings per year for the IT department

Hardware and Infrastructure Cost Savings from Virtualization

Average 80% improvement in workload densityAverage 44% reduction in server hardware and

associated annual utility and real estate costs20% - 40% reduction in storage space

BusinessBenefits

Availability: Average 52% reduction in planned downtime; average 23% reduction in unplanned downtime

Time-to-Market: Approximately 41% reduction in

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“We were blown away by all the different features that

Windows Server 2012 has to offer.”

–Global Infrastructure Manager at a large Services Company in

the U.S.

workload deployment timeProductivity: Approximately 15 hours per employee

per year recovered in end-user productive time

Administration Labor Cost SavingsBy reducing the number of physical servers and discrete add-on tools, IT departments can save on server management and administrative overhead costs. 91% of Windows Server 2012 early adopters said that they expect time saved in server administration activity; and 88% expect savings in network administration hours. Overall, the surveyed early adopters identified total server and network administration labor savings of approximately 3.2 hours per IT employee per year, on average. Considering a fully burdened IT staff salary of approximately $37 i per hour for an average IT department size of 1,830 employees across all the surveyed participants, these savings amount to a total of approximately U.S.$220,000 per year for the department.

For server and network administrators of these companies, the biggest identified benefits are the ability to access integrated tools from one central location and the support for advanced automation of common management tasks. Server Manager, which comes built into Windows Server 2012, provides centralized and remote management capabilities allowing administrators to control and monitor servers without logging in to individual consoles. Windows® PowerShell™ provides automation of most management tasks via software-based policy controls. When combined Microsoft System Center, administrators also benefit from a sophisticated and integrated end-to-end management and monitoring platform. A Global Infrastructure Manager of a U.S. based services company explains, “Centralized management capability of Server Manager is very important for us. We don’t want to use servers as individual desktops. The ability to manage all servers from a single pane of glass is a huge benefit for us.”

The centralized administration console further allows admins to simplify management tasks and unify server and storage management into a singular interface. IT staff can provision servers, storage, virtual desktops and hard drives, and remote applications from a desktop without requiring physical access or remote connections to each individual server.

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“Centralized management capability of Server Manager is very important for us. We don’t

want to use servers as individual desktops. The ability to manage all servers from a single pane of glass is a huge benefit for us.”

– Global Infrastructure Manager at a large Services Company in the U.S.

91% of early adopters expect reduction in annual server administration labor effort 88% of early adopters expect reduction in annual network administration labor effort

U.S.$220,000 cost savings per year for the IT department

With new Microsoft Hyper-V® enhancements such as NIC Teaming, Failover Cluster Manager, Extensible Switch, Live Migration, and Storage Migration, customers will be able to make more efficient use of their time that is currently allocated for admin activities. Says a Windows Server 2012 deployment team member from a

United Kingdom based hosting company, “I would expect to save approximately 30% of time managing the hypervisor platform. In reality we’ll be able to do more with the same allocation of time – be more proactive, perform more advanced diagnostics and analysis for tuning, performance, and capacity management activities.”

Over 70% of Windows Server 2012 early adopters were large enterprises and hosting companies with users or customers distributed across a multi-server and multi-site IT infrastructure. Common challenges for these companies included lack of standard network management processes and reliance on internally developed solutions and tools, such as spreadsheets for tracking IP addresses and managing access policies. Manual processes and lack of accountability led to hundreds of hours lost annually in data validation, ensuring that the information is up to date, and in fixing errors related to duplicate or inaccurate information. For one such early adopter, a major automotive company in Europe, the dealer and financial applications are provisioned for different countries and customers. Currently, lack of automated processes leads to extra effort in troubleshooting and managing their Web farms. However, the company expects to reduce its admin labor costs by 20% once fully automated with Windows Server 2012 and Internet Information Services 8 (IIS8).

These early adopters expect to recover much of the administrative time lost in network, identity, and access management tasks by using new Windows Server 2012 capabilities, such as IP Address Management (IPAM), IIS8, and enhancements in Microsoft Active Directory® Domain Services (AD DS) functionality. Windows Server 2012 IPAM allows these customers to easily provision, track usage, view utilization statistics and trends, and create reports related to their day to day network management activities. “We use an in-house solution for tracking IP address usage. It is a manual process, which assumes

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“I would expect to save approximately 30% of time managing the hypervisor platform. In reality we’ll be able to do more with the

same allocation of time – be more proactive, perform more advanced diagnostics and analysis for tuning,

performance, and capacity management activities.”

– Windows Server 2012 Deployment Team Member at a Hosting Company based in the

“We have applications that run for different countries and customers and thus have a lot of Web farms to troubleshoot and manage.

Currently, all certificates are managed centrally, but it is a manual process which causes a lot of work. Our goal is to get fully automated with Windows Server 2012 and

IIS8. Automation of tasks will lead to estimated 20% reduction in costs.”

– Windows Server 2012 Deployment Team Member at a large Automotive Company in

Europe.

that all administrators follow the rules. The process is error prone and it can take considerable amount of time before updates are entered into the tracking application. We expect that IPAM will replace our current solution and save us at least half of the time that we currently spend for

managing IP addresses,” says a Windows Server 2012 deployment team member at a large European telecommunications company.

Hardware and Infrastructure Cost Savings from VirtualizationServer Cost SavingsIn keeping up with the advances in server virtualization technology, many of the Windows Server 2012 early adopters had already begun their journey towards complete virtualization of their IT workloads. All of the surveyed companies were either standardized on VMware or using Hyper-V on older versions of Windows Server®. Depending on the workload and performance needs, these customers were achieving a virtualization density of an average 27 virtual machines (VMs) per host (based on a range from 8 to 90).

Windows Server 2012 Hyper-V provides an enterprise level hypervisor that enables organizations to consolidate and host multiple, mixed workloads and a larger number of VMs on their physical servers. Windows Server 2012 Hyper-V provides enhanced

support for large workloads with up to 64 virtual processors and 1TB of memory, allowing organizations to run powerful and highly dense VM environments using fewer servers and operating system licenses. A Windows Server 2012 deployment

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“With Windows Server 2012 we expect to achieve a density of 32:1 [VM to Physical

Core] for a 2 x 8 core CPU blade. Currently we can only expect 17 VMs per blade with Windows 2008 R2.” – Windows Server 2012 Deployment Team

Member at a Hosting Company in theUnited Kingdom.

100% of early adopters expect improvement in virtualization density and private cloud tenant density

team member from a United Kingdom based hosting company explains, “With Windows Server 2012 we expect to achieve a density of 32:1 [VM to Physical Core] for a 2 x 8 core CPU blade. Currently we can only expect 17 VMs per blade with Windows 2008 R2.” 100% of the companies evaluating the Hyper-V virtualization scenarios expected to improve their workload density and hence their server footprint and related utility costs.

On average, these early adopters expected to raise their host virtualization density to approximately 48 VMs per host – an increase of approximately 80% from their hypervisor technology currently in use (based on a range from 20 to 125). Windows Server 2012 early adopters viewed the ability to consolidate their VM workloads and the above Hyper-V enhancements as an essential requirement that allowed them to control and cut their server and IT costs. With virtualization, these companies expected a 44% reduction in their existing server hardware – contributing to one-time savings on their future hardware needs, annual maintenance cost savings, and hardware associated annual utility and real estate cost savings.

Storage and Network Cost SavingsThe amount of data in enterprises is growing at a tremendous rate making storage efficiency a critical requirement for IT departments. Windows Server 2012 brings cost efficiencies with new storage capabilities such as Storage Spaces, Thin Provisioning, and Data De-duplication. These features greatly increase disk space availability by ensuring that data is stored and accessed efficiently, only storage needed at a given point in time is provisioned for use, and unused storage is reclaimed. 86% of the early adopters evaluating storage management capabilities of Windows Server 2012 expect to see a reduction in storage space utilization. Internet hosting providers evaluating these scenarios expect a significant recovery – ranging 20% to 40% – in their current storage space needs.

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“Considering our future requirements, we estimate [U.S.] $75,000 savings for server shared

SAS solution and 5TB Fibre Channel SAN through use of commodity

hardware.” – Windows Administrator at a Leading

80% improvement in workload density (VMs per host)

44% reduction in server hardware and associated annual utility and real estate costs

Windows Server 2012 also features enhancements such as Failover Clustering, Server Message Block version 3 (SMB3) , and Remote Desktop Services (RDS) that allow organizations to leverage their existing commodity storage infrastructure and stem demand for new and high-end SAN or block-based storage hardware. With SMB Direct, companies also expected cost savings from using Network Interface Cards (NIC) that support the Remote Direct Memory Access (RDMA) protocol to achieve class performance similar to fibre channel, which usually comes at a 10% or more cost premium. A Windows

Administrator from a U.S. based university says, “Considering our future requirements, we estimate [U.S.] $75,000 savings for server shared SAS solution and 5TB Fibre Channel SAN through use of commodity hardware.”

With the continued consumerization of IT, organizations are increasingly asked to provide their employees an “always-on” access to the corporate data and business applications from virtually anywhere and on any device. 75% of the organizations that evaluated branch infrastructure enhancements currently lacked any data caching capabilities. Each of these organizations expected to see significant improvements in the Wide Area Network (WAN) traffic utilization and also reduce their bandwidth costs via Windows Server 2012’s BranchCache® capabilities, which allow them to cache the network content and make it available at their branch locations, thus reducing WAN use. A Windows Server 2012 deployment team member of a Canadian educational institution explains, “We’re not scratching the surface of what BranchCache can do. We will migrate from NetApp to Windows Server 2012 and take it to the next level.”

Using Windows Server 2012’s DirectAccess features, remote users can now securely access internal resources without connecting to a Virtual Private Network (VPN), thus allowing organizations to save on VPN infrastructure costs. Although most of the organizations that evaluated DirectAccess scenario did not see their VPN infrastructure eliminated immediately, they did, however, expect to reduce their

dependency on VPN infrastructure over time by relying on DirectAccess instead. For example, a leading

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“We’re not scratching the surface of what BranchCache can do. We will migrate from

NetApp to Windows Server 2012 and take it to the next level.”

– Windows Server 2012 Deployment Team Member from a Public Education Institution in Canada.

“As we transition more and more mobile workstation users to DirectAccess, we anticipate use of our traditional VPN

infrastructure by more than 3,500 Windows clients to decrease significantly.”

– Windows Server 2012 Deployment Team Member from a Healthcare Organization in the US.

86% of early adopters expect improvement in storage space utilization100% of early adopters expect reduction in network bandwidth utilization with BranchCache

20% - 40% reduction in storage space (data includes hosting providers only)

healthcare company in the U.S. currently supports a large number of disparate mobile workstations over VPN. With Windows Server 2012, the company has plans to transition its mobile workstation users to DirectAccess instead of VPN, and thus significantly reduce reliance on their traditional VPN infrastructure.

Software Cost SavingsWindows Server 2012 provides organizations the key, built-in capabilities that are needed to deploy and support multi-site and multi-tenant private clouds, maintain continuous availability, easily move virtual machines and virtual hard disks (VHD) between remote sites, and manage other core infrastructure services required to run their IT environment. Currently, participants were either outsourcing their network and storage management tasks or relying on third party software solutions. Says an IT Manager from an Australian retailer, “With XenServer, the technical skills of our IT team were not exposed and we had to rely a lot on partners. Hyper-V is something we have a better understanding of.” The medium sized company with approximately 500 employees also expects a one-time cost savings of more than U.S.$60,000 in third-party software products such as XenServer and StorageCraft for VM replication. Similarly, a European hosting company expects to realize U.S.$2,500 savings for each of its 500 servers by eliminating third party replication software. Like these companies, several other early adopter companies that were surveyed relied on disparate software solutions, which included:

XenServer, VMware vCenter, and manual procedures for VM provisioning; CiscoWorks LAN Management Solution, SolarWinds, Secure CRT, and Hitachi

network management tools for managing the Ethernet switching infrastructure;

Symantec NetBackup, HP Data Protector, IBM Tivoli, and EMC Networker for storage and backup management;

Microsoft SharePoint®, Microsoft Excel®, and legacy in-house applications for IP address space management; and

Other third party tools for monitoring, policy, and patch management of the virtualization environment.

These organizations expect significant cost savings from virtualization, which reduces the number of servers and thus cuts down the number of licenses required to support the hypervisor platform. For example, a global financial services company expects to save more than U.S.$2.5 million by eliminating third party

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“With XenServer, the technical skills of our IT team were not exposed and we had

to rely a lot on partners. Hyper-V is something we have a better

understanding of.”

– IT Manager at a leading retailer in Australia.

hypervisor platform licensing. Another Turkish IT services company is currently virtualized on a mix of server OS that includes both Linux and Windows Server products. The customer expects to increase their virtualization density by as much as 33% after migrating to Windows Server 2012 and achieve significant OS license cost savings through increased density and licensing options.

With Windows Server 2012 and System Center software, organizations can leverage their current network infrastructure without introducing new routing and switching, data recovery, management, and administration add-ons. Built-in NIC teaming capabilities of the OS works with all network adapters and does not require any additional third-party

teaming solutions. The Hyper-V Extensible Switch (vSwitch), a layer-2 virtual network switch, allows organizations to emulate full capabilities of third-party hardware-based networking solutions. Windows Server 2012 also includes built-in support for IPAM, which allows discovering, monitoring, auditing, and managing IP address space used in a network from one central location.

By eliminating the use of these add-on products, organizations expect to save significantly in software licensing and maintenance costs. A Global Infrastructure Manager at a U.S. based services company explains, “We are looking at Hyper-V as a replacement for our VMware and NetApp applications. This represents millions of dollars in cost savings for us going forward for all our companies.”

Business BenefitsIn addition to the IT cost savings discussed above, Windows Server 2012 also provides certain indirect benefits leading to more revenue generating opportunities for businesses.

System AvailabilityBesides serving as a foundation for virtualization solutions, such as Virtual Desktop Infrastructure (VDI) and private cloud, Windows Server 2012 introduces continuous availability solutions for server and storage at no added cost. More than 60% of the early adopters said that they expected to reduce their planned and unplanned downtime after migrating to Windows Server 2012.

With Windows Server 2012, availability is accommodated during planned downtime or maintenance windows. Hyper-V Live Migration and Storage Migration allow organizations to move multiple running VMs and VHDs between physical hosts or

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“We are looking at Hyper-V as a replacement for our VMware and

NetApp applications. This represents millions of dollars in cost savings for us going forward for all

our companies.” – Global Infrastructure Manager at a Large Services Company in the U.S.

storage locations with no downtime. With Online Corruption Isolation and Repair, check and repair activities on storage disks can be done while the volume remains online, ensuring that the services are continuously available to the users. Cluster Aware Updating integrates with existing Windows Update Agent and Windows Server Update Services, and maintains

availability during planned update activities. Windows Server 2012 early adopters evaluating these features expected to reduce their annual planned system downtime by an average of 52%.

For a few others, although the companies did not directly benefit from downtime improvements, they did, however, expect to reduce development and maintenance time required in managing uptime using their existing solutions. A Windows Server 2012 deployment team member at a global financial institution explains, “We have zero planned downtime in VM and VHD migration. A lot of in house development was needed to create this situation. I expect this in house development is not needed with Hyper-V as Live Migration is always in the Microsoft solution.”

Windows Server 2012 early adopter organizations also expect to lower their unplanned downtime during failures via built-in continuous availability, replication, and disaster recovery features such as NIC teaming, Failover Clustering, Hyper-V Replica, and new file share protocol enhancements. File server availability is now improved via transparent failover capabilities that make node outages transparent to dependent services. Thus, a workload running on an active-active cluster remains available even when the particular cluster node running that service fails. Companies evaluating these features expected to reduce their annual planned system downtime by an average of 23%.

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62% of early adopters expect reduction in annual unplanned system downtime23% reduction in annual unplanned system downtime expected

Also, by cloud optimizing their IT infrastructure, organizations can now respond to new business needs at a fraction of time it took them before. Windows Server 2012 early adopters expect to reduce their workload deployment time, thus making their applications available quicker by an average of 41%. This allows them to start taking advantage of the revenue generating opportunities enabled via these workloads sooner than they could before.

User ProductivityWindows Server 2012 enhancements are not only visible to the IT admins, but are also extended to end-users in the form of productivity improvements. Windows Server 2012 supports the modern, distributed workforce by giving users the full Windows experience and access to data and applications from anywhere and on any device they choose. The few companies evaluating remote access scenarios had almost 20% of their total employees mobile or remote. These companies expect to benefit from Windows Server 2012’s ease of access features such as single-sign-on to VMs and Remote Apps, DirectAccess instead of connecting to VPN, and cached data access at branch networks, which allow the remote and mobile users to authenticate, open, and start working on their data much faster and reduce the unproductive time lost due to waiting.

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91% of early adopters expect improvement in end-user productive hours15 hours per employee per year recovered in end-user productive time

67% of early adopters expect reduction in workload deployment time

41% reduction in workload deployment time expected

“VM deployment currently requires a lot of manual steps and about 30-45 minutes to provision each time. Using Windows Server 2012 and

System Center, over the next few months we expect to create

automated processes to deploy and move workloads around.”

– IT Manager at a leading Retailer in Australia.

With Remote Desktop Services, users can also disconnect and then reconnect to the RemoteApp programs and VMs all at once, saving time to restore the work environment. User personalization settings are saved across sessions. Backed by these enhancements, Windows Server 2012 early adopters expect to see the end-user productivity improve by an average 15 hours per employee per year.

ConclusionWindows Server 2012 allows organizations to consolidate their existing IT infrastructure and optimize it for the future cloud services. The operating system allows for complete virtualization, dynamic and faster provisioning of workloads that support business needs, and centralized management of tasks. These capabilities bring about cost savings across administration and management activities, hardware purchases and maintenance, energy and cooling requirements, and software licenses. Moreover, improvements in system availability and end-user experience allow businesses to make optimum use of their resources, serve their customers more efficiently, and create faster and more revenue generating opportunities.

The phase one of this TCO study included early adopter organizations that were still evaluating Windows Server 2012 features and aims to capture the percent of these companies experiencing benefits from this new server operating system. Feedback from these early adopters shows that Windows Server 2012 will indeed reduce costs and deliver business benefits that help these organizations generate additional revenue. Phase two of the study aims to confirm and capture the exact numbers and dollar amounts for the benefits identified in this TCO study.

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AppendixAbout This StudyIn early 2012, 51 participants from Windows Server 2012 Rapid Deployment Program were surveyed, with a few augmented with phone interviews, to share their experiences and expectations about the cost savings and indirect benefits from managing their assigned workloads or scenarios on a day-to-day basis.

Interviewees represented companies across North America, EMEA, and Asia Pacific. These companies, operating in different industry segments, ranged in size from less than 20 to more than 150,000 employees. See Figure 1 below for an overview of all participating companies by location and size.

Americas APAC EMEA0

5

10

15

20

25

30

Small (<250)

Medium (<500)

Large (<1000)

Enterprise (1000+)

Figure 1: Distribution of Windows Server 2012 RDP participants by company size and region

Overall, all respondent companies were asked to evaluate a mix of scenarios that span different Windows Server 2012 features. The different scenarios are as follows:

Beyond Virtualization:o Hyper-V Density and Scaleo Cloud Optimized ITo Multi-site Private Cloud

Power of Many Servers, the Simplicity of One:o Efficiencies in Server and Storage Managemento Flexible and Highly Available Storage Serviceso Address and Network Managemento Identity and Access Management

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The Modern Work Style:o The Branch Infrastructureo The Remote Usero The Virtual Desktop

Every App – Any Cloud:o Internet Information Services (IIS) 8

More InformationFor more information on Windows Server 2012, follow these links:

Windows Server 2012 Website Windows Server 2012 Datasheet Windows Server 2012 Detailed Product Overview Whitepaper

References

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i System Administrator - Server Salary (U.S. Average). PayScale.com. Web. 20 May 2012. <http://www.payscale.com/research/US/Job=System_Administrator,_Server/Salary>.