Open virtualization: The enterprise economic impact

This is the second post in Red Hat's three part series on open virtualization. Read the first post here.

Forrester Consulting recently embarked on a Red Hat-commissioned study of the total economic impacts (TEI) of Red Hat Virtualization. You can read that study in its entirety here, but allow me to give you the short version: The company that brings you Red Hat Enterprise Linux, does a lot more than that, and, according to this research our virtualization offering provides an efficiently-priced solution that helped one IT organization invest in future initiatives at lower incremental costs.

The TEI study from Forrester was based on an interview with a large European transportation manufacturer that has used Red Hat Virtualization over a period of six months. It was conducted with the intention of having its readers understand some of the economic impacts of implementing Red Hat Enterprise Linux and then applying or adapting the use case to their own situations. Among other powerful numbers included in the article, this customer realized a 103 percent return on investment (ROI), a net present value of $447,665, and a payback period of 5.6 months.

You can read the study yourself, it isn’t that long and it’s all pretty black-and-white. What’s really interesting, however, is this:

“The customer highlighted that achievements in automating workflows reduced the five-day process, which included 1 hour of work, to 20 minutes with minimal to no lead time. The customer estimates that 10% to 20% of an infrastructure developer’s time is saved each year by increased virtualization task and process efficiency.” - Red Hat Virtualization Increases Efficiency and Cost Effectiveness of Virtualization."

Let’s talk about that for a second, because that’s really important; According to this study, the customer expects risk-adjusted total benefits to be a present value of $881,113. That present value figure was based partially on faster resource provisioning and deployment. Long story short; time to set up a virtual machine (VM) shrank to only 20 minutes, with a significant decrease in lead time, and that resulted in a 10 to 20 percent reduction in total time spent by an infrastructure developer per year.

That’s a big deal because time saved by your developers can be spent doing something else besides setting up new VMs. Additionally, because of its flexibility and scalability, Red Hat Virtualization represents an investment in additional capacity. Therefore, the opportunity to invest in new technologies at a lower marginal cost presents itself. All that aforementioned time and money saved could be spent making some IT automation magic happen with Red Hat Virtualization and Ansible, or implementing new cloud technologies like the customer discussed in the TEI study.

So what’s my personal take on this? There are some amazing opportunities out there to advance your other IT goals when a holistic and big picture approach is taken.

Sure Red Hat Virtualization creates a perfect synergy with Red Hat Enterprise Linux, but it also presents one of those opportunities with technologies higher up in your stack like containers, automation and cloud computing. Depicted in the ecosystem to the left is an example of Red Hat Virtualization integrated with Red Hat OpenShift Container Platform, managed by Red Hat CloudForms and automated by Ansible, much like the solution described in the TEI study that was catalyzed by the incremental cost saving presented by Red Hat Virtualization. With this in mind, it may not be a stretch to say that Red Hat Virtualization stands to be more than just virtualization software for your company; it could lead to a lot more.