Calculating Infrastructure TCO per VM

Most organizations today tend to be mostly or completely virtualized. As their existing 3-tier infrastructure ages, they face a dilemma of whether to refresh their existing servers and SANs or migrate to a web-scale or hyper-converged platform.

The IT leadership often wants to evaluate a TCO (Total Cost of Ownership) analysis comparing the costs of both platforms over the lifecycle of the equipment. In these cases, it is important to factor in variables such as administrative costs, rack space requirements, scalability expectations, etc.

In order to assist IT staffs with their analyses, I have developed a formula that looks at the monthly TCO over N number of years per Virtual Machine:

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