The ROI of VDI – with Citrix and Nutanix

With all of the buzz around VDI for so many years, it’s reasonable to assume VDI owns a good chunk of the corporate desktop market. But Gartner says it only has 4.9% share, with storage as the primary bottleneck.

A Gartner study showed that, on average, storage costs accounted for 40% – 60% of the entire VDI budget. Even worse, 91% of the study participants spent more on storage than they planned.

Nutanix changed the economics of VDI with its introduction of hyperconverged infrastructure (HCI) four years ago. Organizations across the globe have realized both significant savings and a fast payback period by virtualizing desktops. Citrix’ support of Nutanix’s Acropolis Hypervisor makes the numbers more compelling than ever.

The Challenges of Legacy Storage

Monolithic storage arrays don’t lend themselves well to the evolving and dynamic environments typical of VDI deployments:

Storage Arrays Require Monolithic Purchases: SANs must be sized and purchased up-front to have enough capacity to accommodate future expectations. Additional storage shelves can be added up to a point. But once the storage controllers exceed 50% utilization, customers are forced to undergo an expensive upgrade that is risky, complex and time-consuming. Wikibon estimates that the cost to migrate to a new array is 54% of the cost of the array.

VDI Migration Patterns: A migration to VDI typically takes place over a number of years – often in conjunction with an organization’s refresh rate. It commonly starts with one department or a subset of the total user organization and is then expanded across the organization if it’s successful. To meet projected future demand without a forklift upgrade, organizations need to buy large SANs with storage controller and storage shelf capacity that sit unused for years.

VDI Workload Uncertainty: Many different scenarios increase VDI demand more than anticipated, such as implementing a new resource-intensive application, hiring more employees than expected, acquiring another company, etc. If an organization guesses incorrectly and under-buys SAN capacity, it still faces a forklift upgrade. And as the Gartner study referenced earlier shows, most organizations under-buy storage.

SANs Mean a Large “I” in ROI: Even when an organization purchases a large enough SAN to meet future resource requirements, it struggles to show a decent (if any) return on investment because of the up-front cost. As Table 1 shows, the excess capacity begins depreciating on the first day the SAN is installed. Besides the excess capacity expense, there are also rack space, power, and cooling expenses.

SAN Depreciation

 Table 1: Depreciation of the Up-Front Excess Capacity of a SAN

Performance Challenges: While SANs, particularly all-flash arrays, have gotten faster, performance is still limited by the physical storage controllers. As the throughput capacity of these controllers becomes saturated, users experience intermittent read storms and write storms. It translates to an inconsistent user experience – and users (and administrators) hate inconsistency. It’s better to give users a 100% mediocre experience than a 95% excellent and 5% mediocre experience.

Datacenter Politics: Traditional SANs create a political challenge – particularly for persistent virtual desktops. Desktop IT staff get frustrated by constantly going to central IT storage administrators to secure the LUN they need or for more IOPS/lower latency. The central storage staff, in turn, don’t understand write requirements for virtual desktops and doesn’t want to be bothered by VDI requests.

VDI Failure: The SAN issues around a lack of scalability, high initial cost, diminishing/intermittent performance, risk of forklift upgrades and politics make it difficult, as the VDI market share figures indicate, to implement a successful virtual desktop project. While I can’t find collaborating citations, it’s commonly accepted knowledge that most VDI deployments utilizing traditional storage stall out not long after the pilot phase or fail completely.

The Game-Changing Economics of Hyperconvergence

Nutanix HCI provides VDI customers with the exact opposite experience of a SAN. Customers can start small and expand as needed – one node at a time if they’d like. As they add nodes, they’re bringing the latest in CPU, memory, disk, and flash technologies to their environment The cost per VM and total project cost plummets. The risk of over-buying or under-buying is eliminated.

Additionally, HCI customers benefit from Moore’s Law. Table 2 shows a 5,000 user organization migrating to VDI in conjunction with a 5-year refresh rate. Every year for five years IT, rather than buying new PCs for 1,000 users, either locks down their devices or gives them zero clients.

This organization purchases Nutanix or Dell XC nodes instead of a SAN. Assuming it starts with a pilot, it only needs to purchase three nodes to kick things off. As it expands to the first year’s targeted 1,000 users, eight nodes are purchased in total.

Table 2

Table 2: The Declining Number of Nutanix Nodes Required Due to Moore’s Law Hardware Enhancements

Moore’s Law, which states that the number of transistors on a processor doubles every eighteen months, has long powered the IT industry. Laptops, the web, iPhone, and cloud computing have been enabled by ever-faster CPUs.

There’s no end in sight for the continued performance benefits of Moore’s Law, even though the performance is achieved in ways Moore wouldn’t have guessed. The Intel Haswell E5-2600 CPUs, for example, show performance gains of 18% – 30% over the Ivy Bridge predecessor.

Moore’s Law means that hardware continues to get faster. If we assume an annual density increase in VMs per node of 25%, the example organization can handle the next 1,000 users with only six more nodes in year 2. By year 5, it only needs three more nodes to handle the last 1,000 users.

Software-Defined Storage Enabled 1-Click Upgrades

Because SANs use proprietary hardware, the firmware tends to be tightly coupled with the equipment. A new OS version can’t simply be applied to an older SAN, thereby giving it the attributes and capabilities of a new array.

But Nutanix is truly software-defined. Customers can non-disruptively apply the latest Nutanix OS to their existing nodes with a single click, giving their nodes all the capabilities and features of newer models. All nodes, old and new, run the same OS and are managed from a central single-pane-of-glass Prism management console even if the nodes are globally distributed. Because of our software, the older nodes realize increased performance as well.

Nutanix has seen a 5X increase in performance resulting from software from 2012 to today. A Nutanix and Citrix partner, Tim Buckholz of Choice Solutions, wrote a blog post describing how he saw around a 50% increase in performance on the same Nutanix nodes when he upgraded from OS 3.1 to 4.1. As another example, Nutanix’s latest OS release included its patented erasure coding which enables customers to realize around a 30% increase in capacity (even on their older Nutanix and Dell XC appliances).

Combining the hardware performance benefits resulting from Moore’s Law with the software-defined one-click upgrade benefits accentuates the advantages of Nutanix’s pay-as-you-grow architecture. Customers require far fewer nodes when expanding their environment. And original nodes, which are refreshed with the latest OS, can be repurposed for tertiary use cases that don’t consume primary datacenter real estate.

Linear Performance

With Nutanix, each node is a virtualized storage controller, reducing or eliminating the read and write storms common in a SAN environment. Combined with bringing the workload next to the CPU (rather than accessing it across a network), the Nutanix HCI architecture translates to a high-performing and consistent user experience. A better user experience leads to enthusiastic and broad-spread VDI acceptance.

Citrix XenDesktop and Acropolis Hypervisor

The pay-as-you grow capabilities of Nutanix HCI along with the advantages enabled by Moore’s Law and Software Defined Storage 1-click upgrades mean that organizations can realize significant CapEx and OpEx savings from VDI (and a payback period typically less than one year).

Acropolis Hypervisor (AHV) is a next-generation hypervisor that leverages the software intelligence of the hyperconverged architecture. AHV changes the core building block of the virtualized datacenter from hypervisor to application. It liberates virtualization from specialists – making it simple and manageable by anyone from DevOps teams to Citrix administrators.

Running Citrix XD with Acropolis Hypervisor provides customers with benefits such as simplicity, scalability, security, resiliency, analytics, and support of the entire stack. Table 3 shows an example of XenDesktop and Acropolis ROI results based on an analysis we provided earlier in 2015 for a university. After seeing how much money it could save and all the other benefits from using virtualized desktops, the university expanded the initiative from a small project to encompass 6,000 staff members (3,000 PCs and 3,000 laptops).

 

Table 3 rev 4

Table 3: Projected 5-Year Cash Flow Savings from Migrating to Citrix XD on Nutanix Acropolis

CapEx

  • Refreshed Existing PCs: Cost of the PCs + the installation multiplied by the average number of PC upgrades each year by 5 years. For this example:
    • PC Cost (w/o monitor) $750
    • Installation Cost 2 Hr. @$30/hr. loaded cost = $60
    • Ave # Upgrades per Year 48 month refresh rate = 3,000 PCs/4 = 750 PC upgrades on ave. per year
    • ($750 + $60) X 750 X 5 years = $3,037,500
  • Refreshed Existing Laptops: Cost of the Laptops + the installation multiplied by the average number of Laptop upgrades each year by 5 years.
    • Laptop Cost $1,200 (w/o including docking station or monitor)
    • Installation Cost 2 Hr. @$30/hr. loaded cost = $60
    • Ave # Upgrades per Year 36 month refresh rate = 3,000 Laptops/3 = 1,000 laptop upgrades on ave. per year
    • ($1,200 + $60) X 1,000 X 5 years = $6,300,000
  • PC & Laptop Disposal Cost: $25 (university contract) for recycling or otherwise disposing of the old laptops and degaussing the drives.
  • VPN Equipment Eliminated with VDI: Using XD SSL VPN eliminates the need for $40K of VPN equipment per year at a 5 year refresh rate.
  • Nutanix Cost: Five year cost of Nutanix and support
  • XD & 1st Year SA Cost: Five year cost for XD licensing & 1st Year SA
  • Profile Manager: The University is not utilizing a profile manager, although many organizations do use products from manufacturers such as LiquidWare Labs, RES Software, AppSense and others (Unidesk is especially popular among universities).
  • Wyse Zero-Client Cost: PCs and laptops are locked down for the 1st three years and then are replaced with zero-clients (costing $300 each in the example).
  • Cost to Design & Deploy VDI: $80,000 including the Nutanix implementation (a small component)

OpEx

  • Encryption Cost for Physical Laptops: $20 per laptop per year
  • PC & Laptop Power Cost: 80 watts and 50 watts respectively. $.098 per kWH Commercial rate
  • Wyse Power Cost: 8 watts
  • Nutanix Power & Cooling: 1,100 watts per block
  • Eliminated VPN Maintenance: $4,000 per year
  • Staffing Expense: IDC says the cost of staffing virtual desktops, for a typical organization, is 5.2 hours per year – 40% of that for physical desktops. We used this metric along with a loaded IT hourly salary of $30.

What’s Not Included

Hypervisor Cost: Because the university is running XenDesktop on Nutanix Acropolis Hypervisor, there is no additional cost for a hypervisor. This integrated stack also makes management of the environment even easier.

Inventory:  The benefits of eliminating the existing PC & laptop inventories.

User Downtime: Savings from reducing user downtime. If IDC-reported downtime savings numbers are utilized, the analysis would reflect an additional $8M of savings.

User productivity: Savings from making users more efficient are difficult to quantify – especially for a university. In other use cases, it can be easier. For example, an attorney with access to her desktop billing program from anywhere may be able to increase cash flow. Nurses that reduce their log-in times through VDI technology can see more patients.

Disaster Recovery: We do not quantify the benefits from enabling anytime/anywhere access now for the faculty to their virtual desktops.

BYOD: Citrix XenDesktop makes it easy to provide users with their organizational desktop running on any device.

Student VDI: Further savings can be accrued from expanding the environment to encompass learning labs, BYOD, etc.

Table 4 shows another perspective of the ROI results, on a year-by-year cash flow basis – which is typically the way that finance people like to see the results. The $7,876,367 in five-year savings foots to the same number in Table 3. The projections show an ROI of 452% with a 9.4-month payback and an IRR of 106%.

Note that even if staff cost reductions are removed from the calculations that 5-year savings are still projected at over $3M with a payback of under a year.

Table 4 rev 2

Table 4: Cash Flow Savings by Year

Tips for VDI Success with an HCI Architecture

One of VDI’s challenges has been that IT staff assume virtualizing desktops is as easy as virtualizing servers. VDI involves hundreds or thousands of users – each with their own experiences and expectations. Just one disgruntled user, if it’s the right user, can kill a large VDI project.

When a VDI deployment has problems, it tends to affect a large number of users. No matter how well the “mission-critical” application environment is constructed – if the users can’t access the applications, then the organization suffers. A VDI initiative should be treated with the same importance as an enterprise ERP application deployment.

Start with an ROI Analysis

Generating a big picture ROI analysis that includes pain point identification, objectives, and costs is a great start to a successful virtual desktop project. The economic savings enabled by Citrix and Nutanix virtual infrastructure provide incentive for the organization to make the VDI migration a high priority.

Consider Including a User Experience Management Solution

As the ROI analysis almost always shows, Nutanix architecture enables enough savings to warrant an organization “doing VDI right”. Consider using a leading UEM vendor such as Unidesk, LiquidWare Labs, AppSense, or RES Software. Nutanix has partnerships with all of these organizations, and their products are all Nutanix Ready.

Take Advantage of Hyperconverged Infrastructure to Provide a Stellar Pilot

A VDI pilot is one of the most important elements of a successful initiative. If pilot users have a poor experience, they will quickly spread word. The project stalls or fails. With this in mind, you can understand why VDI has such a low market share.

Conventional storage makes it difficult for organizations to establish a successful pilot and then grow the environment. Organizations want to start off with a small SAN sized for the initial pilot and not invest in a larger unit until they’re sure of the project success.

But this approach leads to poor performance for the all-important pilot users. Even if the initial users are happy, the environment grows as peers want their own virtual desktops. Performance degrades and the project stalls.

Nutanix lets organizations start a pilot with as few as three nodes, growing one node at a time as needed. It provides users with a great virtual desktop experience from the start and remains consistent as the environment grows.

Take Advantage of Nutanix Shadow Clones

Nutanix shadow clone technology works well with Citrix MCS and can deliver both persistent and non-persistent desktops. This article by Kees Baggerman and Martijn Bosschaart explains how to effectively use Citrix MCS and PVS on Nutanix.

Remember VDI is Primarily About User Productivity

As impressive as the savings might be from utilizing Citrix XD on Nutanix, increased user productivity is the most important benefit for most organizations. Focus on delivering the best user experience along with improved security, disaster recovery, BYOD, support, and administration. And deploy the best architecture and products possible in order to ensure project success.

 

See Also

The Single Biggest Benefit of Nutanix Hyperconverged Infrastructure (It’s Not What You Think). 12/10/2015. Steve Kaplan. Nutanix web site.

The 7 Reasons Why Acropolis is the Next Generation Hypervisor. 12/01/2015. Steve Kaplan. Nutanix web site.

Nutanix and Citrix: Citrix App Delivery on Nutanix Acropolis. 08/13/2015. Kees Baggerman. MyVirtualVision.

Citrix Mounts Acropolis, Offers Support for Nutanix Citrizenry. 08/13/2015. Chris Mellor. The Register.

Citrix XenDesktop & XenApp Supported on Nutanix Acropolis. 08/12/2014. Andre Leibovici. MyVirtualCloud.net.

Lord of the Token Rings: Nutanix Forms New Alliance with Citrix. 08/12/2015. Adrian Bridgwater. Forbes.

The Secret Bottleneck of VDI. 10/10/2014. Mark Lockwood. Gartner Blog Network.

 

Thanks to Kees Baggerman – CTP (@kbaggerman), Martijn Bosschaart (@mbosschaart) and Andrew Mills (@drutanix) and Tim McCallum (@TimMcCallum97) for contributions and editing.

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