Down with Hardware: Calculating Cost Savings of Software Infrastructure

One of the most amazing things I find with virtual software are the cost savings available to IT. For years, networking pros took it for granted that they had to pay a premium for proprietary hardware or otherwise risk sacrificing performance. But improvements in server designs now enable organizations to dramatically reduce infrastructure costs, by as much as 70 percent, without sacrificing performance.

This is why the world’s largest telecom and media giants have deployed Silver Peak’s virtual products to accelerate data movement over longer distances.

Some savings are achieved by leveraging unused server resources in the organization, eliminating any of the otherwise-additional hardware costs that would be required to run the virtual machine. Take, for example, an organization that needs to accelerate a 1 gigabit-per-second (Gbps) connection. A Riverbed solution will cost just over $270,000—Riverbed’s high-end 7050-M appliance with one year of support. By contrast, the Silver Peak VRX virtual product costs a whopping 70 percent less, at just over $80,000. However, the high cost of hardware is not exclusive to Riverbed’s 7050. Even a Silver Peak NX-9700, also capable of optimizing 1 Gbps of throughput, would run nearly $250,000 with support. The fact is that hardware appliances are nearly always expensive, in part because of Q&A testing and production processes needed on one hand, and the economies-of-scale and intense price competition of off-the-shelf servers on the other.

Down with Hardware: Calculating Cost Savings of Software

Omitting the server costs when calculating the software investment may sound “unfair” at first.  After all, the infrastructure software consumes the processing cycles, which otherwise would be used for a different application. But for many organizations, those cycles are a wasted resource, and until there’s significant demand for those processes it is a mistake to factor in the purchase of additional hardware.

But even if you include the cost of a new server, the virtual solution is still 60 percent of the Riverbed solution. This assumes a high-end Dell server with a 2.4 GHz, 8 core processor, and 16 146 gigabyte (GB) disks (total price is about $27,000, including support, before any corporate discounts).

Once the server is in place, though, adding another gigabit of optimized capacity is simple — just add more software. Riverbed, in contrast, would require the customer to add a new appliance, again raising capital costs (CAPEX) back to nearly 70 percent more than the server/VRX combination. In fact, you could add up to about four Silver Peak VRXs to such a server for 4 Gbps of optimized throughput. A comparable Riverbed solution would be more than three-times the cost, to say nothing of the time needed to deploy physical appliances, the additional electricity and cooling costs for the added hardware, nor the rack space they occupy.

Now you see the true power of a virtual infrastructure. Yes, there are tremendous improvements in agility and operational expenditures. Organizations can also drive greener data centers and lower their energy costs and consumption with virtual appliances. But it’s the “cost savings” that’s the real kicker. So tell me, why purchase proprietary hardware when you can spend nearly one-third of the cost and go virtual?

(Additional reporting by Chris Nguyen, Silver Peak lab manager)