I was recently reading an Information Week on SMB Virtualization, where the author mentions that VMware believes SMB customers (defined here as sub-10 physical server) are either jumping in full force, or not virtualizing at all. He also spoke with Dell GM for SMB, Erik Dithmer, who mentioned that customers would save little or no money at all on virtualization. Dithmer must be basing his math on the process of shared storage in a virtualized environment vs. individual server storage on the non-virtualized path. I would actually present an alternate solution to the problem for a user with less than 10 physical servers in their company today.
Physical
On Dell.com today, I can purchase a R710 for $999 at street price. This will be my baseline for a physical server solution. Multiply this by 10, and we have a $10k price tag. To build a proper disaster recovery scenario in a physical world, you need to both backup and replicate your data from one physical location to another. The least expensive backup option I can select is Commvault, at $549 per server. The least expensive replication scenario I can find is a 5-pack of Double-take for $2499. So, at a very minimum, a physical server disaster recovery scenario is going to run you $10k +$5500 +$5000 = $20,500.
Virtual with SAN
Best practice for a disaster recovery scenario including shared storage is for there to be 2 equal SAN arrays on either side of your disaster recovery location. At a minimum, it is required to have 2 servers in your primary location for failover activities, and a single machine in the disaster facility for run-time operations. Once again, I went out to Dell.com to prove out Erik Dithmer’s hypothesis.
Although Dell markets a Virtualization in a Box config listed at $12,999, that configuration contains 3 R710 servers which only have a single socket, rendering most of the features VMware offers like Virtual SMP and CPU affinity fairly useless. So lets config this the old fashioned way. Dell offers the R805 online ($4500) as the “Virtualization” ready choice, so the standard configuration has dual quad-core Opterons and 8GB of memory, when coupled with VMware’s Memory overallocation capabilities, gives it the same performance as 16GB of RAM in physical systems. The shared storage component of this equation brings in the big question mark. Do I go with the MD3000i, iSCSI SAN on both sides for about $5000 each and add the $3500 per ESX server Commvault and $2500 per 5-VM Doubletake ($25,500 total) or do I go with two Dell Equallogic arrays, which have free replication software but would still need the Commvault (well over $25k).
So with the two scenarios side by side, Dithmer is correct that virtualization can in fact be more expensive than business as usual based on some assumptions.
The Third Option – Veeam Backup and Replication
Virtualization is the right option for so many reasons, a few of them including encapsulation, isolation, and portability. The ability to get a VM back up in running in minutes versus hours to rebuild a physical box is definitely the soft dollar value that most people know it is. But how do you accomplish these SLAs without requiring the large capital investment in shared storage? Or how do you leverage something like the Dell MD3000i, which comes in at roughly $5000 a piece in a proper DR strategy? The answer for me is Veeam Backup and Replication 4.1 with its virtualization capabilities. At a retail price point of $599 per physical ESX socket for unlimited VM backup and replication, you have the opportunity to get your disaster recovery scenario under control immediately. Veeam has the capability of backing up local storage, VMFS datastores on iSCSI and deliver those backups to pretty much any data storage site you can see. Veeam’s replication includes the capability of replicating ESXi to ESXi systems as well, so the security of ESXi can also be covered. So in the above scenarios, you can configure your hardware any which way you like for a DR scenario and still get accurate backups and replications.
Let’s take a look at the minimum virtualization configuration capable of accomplishing the DR strategy. Let’s use 3 virtualization capable systems with the R805 ($4500) plus 6 total sockets of Veeam Backup and Replication 4.1 ($3600). The primary location will have two R805’s, each configured to backup to each other’s local storage. The primary systems would also replicate to the DR location in case of site failure, and your data would be contained in two places. Mission accomplished, 10 VMs backed up and replicated for under $14,100. That is roughly $6,000 less than the 10 physical servers in a customers environment. It also takes no consideration for the reduction in energy usage, number of parts that might break, or any of the other environmentals of a data center.
In summary, Veeam Backup and Replication can save your SMB business significant costs when implementing virtualization.

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