On-premises Costs

The following rules are applied in the calculation of on-premises VM costs.

  • On-premises costs are determined from the VM perspective. VM compute cost is a relative cost allocation. The intent is to compare on-premises VM costs to in-cloud VM costs.

  • The on-premises cost of a VM is a fair allocation of the parent host-cost, based on the relative size of the VM with respect to its parent host. The following factors are considered as the costs are calculated:

    • Lifetime of the host hardware - Over which the server hardware is amortized (default = 36 months). This is used to calculate the monthly cost.

    • CapEx1 - Total cost of the hardware including any applicable taxes, network, implementation costs, etc., minus the cost of storage.

    • CapEx2(storage cost) - Total cost of DAS or SAN (or iSCSI) storage or NAS devices if the VMDK files reside in a NAS device.

    • OpEx - All operating costs such as facilities, power, WAN, backups, administration and other labor, etc.

  • For default calculations, on-premises host and VM costs are estimated based on a customer’s hardware configuration compared against industry benchmarks and norms. These costs are based on a default lifetime of 36 months. However, you can apply your actual costs to provide a more accurate view of your on-premises costs. See Custom Pricing for Cost Analysis for more information.

  • Calculating on-premises VM costs

    • CapEx1: A portion of the total Capex1 is allocated to the VM based on the VMs relative size (CPU & Memory) to the parent host (CPU & Memory). It factors the following nuances:

      • Excess capacity: For example, if a host has 24 cores and 1TB RAM but has only 1 VM with 2 CPU and 8GB RAM, then only the 2 CPUs and 8GB RAM will be considered in calculations.

      • Move-Group aware: If your move group includes only a subset of the VMs in a host, then host cost will consider only the VMs in the move-group.

      • Overcommit aware: It is very common for customers to over-allocate CPU and memory. For example, if a host has 24 cores and 1TB RAM and the CPU/memory has been overcommitted by a factor of 2, then the host is treated as a system with 48x2TB system, effectively reducing the VM costs by 50%.

    • CapEx2 (storage cost): VM storage is an absolute cost assignment based on the allocated (not used) VM storage. For example, assuming you have a host with 2 VMs and the following configuration:

      • Host has 10TB storage costing $20,000.00 - effective cost $2/GB

      • If VM1 has been allocated 500GB, then the on-premises VM storage cost for this VM would be $1,000.00

      • If VM2 has been allocated 2TB, then its storage cost would be $4,000.00

      Note: Allocated storage is strictly from the point of view of the VM as storage seen within VMDK(s). This applies regardless of how the VMDK has been provisioned (in DAS, SAN, NAS). Network storage connected to a VM is not considered as the VMs native storage and therefore is not included in the mapping/costing.

  • OpEx: It uses the same allocation rules as CapEx1

  • Lifetime: After the cost of the host has been allocated to a VM, then the monthly VM cost is calculated using this value.