Microsoft Windows Azure Platform TCO Analysis

MAB October 17, 2011

Model v2.130, Report v2.5

Windows Azure Platform for MAB

Usage Extra Small Computing Windows Azure Computing 0hrs / month 2,253.0hrs / month Rate $0.05 / hour $0.10 / hour Initial / Month $0.00 $225.30 Initial / Year $0 $2,704

Storage (unstructured) (GB) Storage transactions (tx)

1GB 50010K tx / month

$0.14 / GB / month $0.01 /10K tx

$0.14 $5.00

$2 $60

Content Delivery Network (CDN) CDN Transactions (tx) Usage

0GB 010K tx / month

$0.18 / GB / month $0.01 /10K tx Rate

$0.00 $0.00 Initial / Month Initial / Year

$0 $0

1GB databases (Web) 5GB databases (Web)

3units 0units

$9.99 / month $49.95 / month

$29.97 $0.00

$360 $0

10GB databases (Business Edition) SQL Azure 20GB databases (Business

0units 0units

$99.99 / month $199.98 / month

$0.00 $0.00

$0 $0

** Average usage, counts, rates and cost per month over analysis period. Initial defaults based on Profile selections. Annual costs are shown as initial costs and do not include monthly Edition) capacity growth. See monthly detail for costs with growth. *** This is not a pricing proposal, but an estimate for comparison. Please contact Microsoft or a certified Microsoft Partner to obtain an official pricing quote. All pricing subject to change. 30GB databases (Business 0units $0.00 | $0 Page 2 MICROSOFT CONFIDENTIAL$299.97 / month

Windows Azure Platform Total Cost of Ownership (TCO) for MAB

Windows Azure Platform Compute (Windows Azure instances) Annual (w/ growth) $3,530 Average Cost per Month $294

Storage (non-relational, files) Storage transactions (non-relational)

$2 $198

$0 $17

1GB databases 10GB databases AppFabric Service Bus connections

$1,239 $0 $0

$103 $0 $0

AppFabric Access Control transactions Bandwidth - inbound

$2 $0

$0 $0

Bandwidth - outbound IT administration and support Setup and delivery

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$239 $1,201 $82

$20 $100 $7
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Total

$6,493

$541

Windows Azure Platform Total Cost of Ownership (TCO) for MAB

Windows Azure Platform Total Cost

Windows Azure Platform total cost of ownership per year over the year analysis period.
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Windows Azure Platform Total Cost of Ownership (TCO) for MAB

Windows Azure Platform Costs Per Year

Total cost of ownership costs per month for the Windows Azure Platform, average over the year analysis period.
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Windows Azure Platform vs. On-Premises Solutions

Comparing the Windows Azure Platform with On-Premises solutions results in the following benefits for Windows Azure Platform:
Windows Azure Platform Advantage - One Year Analysis Period Net Savings with Windows Azure Platform Total Windows Azure Platform Costs Return on Investment (ROI) Net Present Value (NPV) Savings (discount rate = 11.0%) Time it takes for the Windows Azure Platform (in months) to recoup investment with savings when compared to alternatives Windows Azure Platform vs. On-Premises $110,677 $6,493 1,700.0% $107,008 1

* On-premises is configured with virtualization for comparison. * Purchase cost for initial on-premises infrastructure is included.

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Windows Azure Platform vs. On-Premises Solutions

TCO Comparison with Windows Azure Platform

Comparing the total cost of ownership of the Windows Azure Platform to on-premises solution over the next year.
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Windows Azure Platform vs. On-Premises Solutions

Net TCO Savings with the Windows Azure Platform

With Windows Azure Platform, compared to on-premises solutions, the savings in total cost of ownership over the next year.
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Windows Azure Platform vs. On-Premises Solutions

Windows Azure Platform vs. On-Premises (virtualized) Windows Azure Platform Savings Over One Year Analysis Period Web / worker computing Storage (non-relational) Database computing, licensing and storage Service Bus connections Access Control transactions Bandwidth IT administration and support Facilities and overhead Setup and delivery Total Cost Over One Year Analysis Period Windows Azure Platform $3,530 $200 $1,239 $0 $2 $239 $1,201 $0 $82 $6,493 On-Premises (virtualized) $60,863 $7 $25,430 $0 $0 $2,958 $12,616 $11,183 $4,113 $117,170 Windows Azure Platform Savings vs. On-Premises $57,333 ($193) $24,191 $0 ($2) $2,719 $11,415 $11,183 $4,031 $110,677 94.2% -2,757.1% 95.1% 0.0% 0.0% 91.9% 90.5% 100.0% 98.0% 94.5%
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Windows Azure Platform vs. On-Premises Solutions

Windows Azure Platform vs. On-Premises

Comparing the total cost of ownership of the Windows Azure Platform to an on-premises solution over the next year.
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On-Premises
The estimated costs of an equivalent On-Premises solution
On-Premises Costs Over One Year Analysis Period Year 1 Average per Month $5,072 $1

Web / worker computing Storage (non-relational)

$60,863 $7

Database computing, licensing and storage Service Bus connections

$25,430 $0

$2,119 $0

Access Control transactions Bandwidth IT administration and support

$0 $2,958 $12,616

$0 $247 $1,051

Facilities and overhead Setup and delivery

$11,183 $4,113

$932 $343

Total Cost

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$117,170

$9,764

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On-Premises
On-Premises Costs Per Year

Details on the total cost of ownership per year for OnPremises solution over the next year.
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Partner Application Azure Profile Settings for MAB

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Partner Deal Projections

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Partner Investment and Profit

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Seasonality

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Seasonality

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Sources of Default Metrics

Costs for on-premises servers, storage and networking based on Alinean research 2009 using publicly available retail pricing from HP and Dell (servers), EMC (storage) and Cisco (networking). Costs for software licensing based on Microsoft retail prices as of August 26, 2009, including the following sources: Microsoft SQL Server 2008 Microsoft Windows Server 2008 Microsoft System Center 2007 IT administration, support and delivery management services for on-premises configuration are based on IDC IO studies 2006, updated to reflect latest best practice averages, salaries and burdened rate information by Alinean, 2009 (tuned for industry and location). IT administration and support for the Windows Azure Platform were derived based on comparing tasks that could be eliminated and reducing the staffing to account for outsourcing / automation. Migration costs for Windows Azure Platform are based on profile and configuration using metrics provided by Microsoft analyzing initial TAP customer experiences. Estimating these by default is difficult and it is recommended that the assumptions for Windows Azure migration, as with all assumptions, be reviewed and personalized to reflect your unique requirements and costs. All pricing for the Windows Azure Platform based on retail prices as of January1, 2010, Source http://www.microsoft.com/azure/pricing.mspx. All competitive pricing and metrics are for comparison purposes only. As many factors contribute to pricing, configurations and discounts, these figures should be used for guidance only. Alinean provides these metrics as a guide only and does not warrant results. It is important to research and enter your own unique configuration and pricing. All pricing for Windows Azure Platform is subject to change, and any pricing provided does not represent a price quote. Please contact your Microsoft representative for more information.

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Appendix

Steady Growth / Demand Spikes with On-Premises Solutions

On-Premises Solution
Computing Capacity and Costs
Under-provisioned

On-Premises Actual Capacity Used Capacity Forecast

Over-provisioned Over-provisioned Initial Over-provisioning

Time
In steady growth environments, on-premises or traditional hosted capacity is purchased based on forecasts where capacity is purchased ahead of time to support predicted workload/growth. According to IDC, these environments are typically 40-60% over-provisioned initially, and as growth occurs, additional capacity is added in similar overprovisioned fashion. In virtualized environments, capacity can be managed more easily by moving virtual machines to underutilized physical servers to help reduce the amount of underutilization. However, demand is not steady, and overprovisioning still occurs even in virtualized environments. As growth is monitored, unpredictable spikes in growth are not immediately handled, causing short term service level issues. When spikes occur, emergency provisioning often occurs to be sure future spikes are handled, but often just leads to additional headroom requirements and further over-provisioning. The over-provisioning comes with initial capital cost, and on-going operational expenses, leading to higher total cost of ownership (TCO).
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Steady Growth with Windows Azure

Windows Azure Platform

Computing Capacity and Costs

Capacity increases handled Reduced Over-provisioning Reduced Over-provisioning

Windows Azure Platform Actual Capacity Used Capacity Forecast

Lower initial costs

Time
With the Windows Azure Platform, additional capacity can be better matched and allocated to support monitored workloads, substantially reducing the amount of over-provisioning. When workloads decline from predictions, capacity can be reduced to lower costs. When workloads increase dramatically, additional capacity can be quickly and dynamically allocated to handle increased computing demands, adding just what is needed, and then de-allocating when not needed. With the Windows Azure Platform, actual capacity requirements can be more precisely matched against capacity purchased to dramatically reduce total cost of ownership.

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Predictable Spikes in Demand / Scheduled Workloads

On-Premises Solution

Computing Capacity and Costs

On-Premises

Over-provisioned

Capacity Forecast

Time
In environments with predictable demand spikes or scheduled workloads / applications, on-premises solutions are most often purchased based on peak requirements. When not in use, the computing capacity often sits idle. This leads to dramatic underutilization of the assets and unnecessary capital investment / on-going management and support costs. Sometimes this peak capacity can be utilized by other virtualized applications, moving demand to utilize the idle capacity. In this manner, utilization can be improved, but in practice the management overhead in non-fully automated environments leads to these resources sitting idle. If peak capacity varies or grows, the on-premises environment is over-provisioned to handle the growth in peak demand, making the return on assets that much worse, and leading to even higher total cost of ownership.

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Predictable Spikes in Demand / Scheduled Workloads

Windows Azure Platform

Computing Capacity and Costs

Eliminated Over-provisioning

Windows Azure Platform Capacity Forecast

Time
With the Windows Azure Platform, additional capacity can be allocated on a scheduled basis to precisely match the needs of the predictable demand spike or scheduled application. When demand spikes are not present, or the application computing power is not needed, the Windows Azure Platform capacity can be turned off to reduce costs. When demand spikes occur and the application computing power is needed, the capacity can be dynamically allocated to meet the exact requirements. With the Windows Azure Platform, actual capacity requirements can be more precisely matched against capacity purchased to dramatically reduce total cost of ownership.
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Disclaimer
This analysis report should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of the report. This analysis report is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT. 2010 Microsoft Corporation. All rights reserved. Microsoft, Active Directory, Axapta, BizTalk, Microsoft Dynamics, SharePoint, Windows, and Windows Server are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this report may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation. Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this analysis. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this analysis does not give you any license to these patents, trademarks, copyrights, or other intellectual property of Microsoft. This tool complies with their privacy policy.For more details, please visit the Microsoft website to review the policy in detail.
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