Caveats
Without actual, real-world workloads and operating systems, I decided to take a simplistic approach to this comparison by keeping things relatively streamlined. For example, you'll notice that: in both the VMware and Microsoft cases, the total workload is 150 virtual machines; every virtual machine is running Windows Server 2008 Standard; and every host is identically configured with dual processors.
My goal was to develop a reasonable, consistent baseline and then just work the numbers to see how things would fall out. Further, all of the pricing you see is list; no volume discounts are applied because that information varies too much between vertical and between licensing programs.
These calculations do not include hardware costs; this is a software-only affair. This comparison does not attempt to include maintenance costs, either, as these vary by support level. The Microsoft pricing does include some software maintenance, but only because it's included in the list price. Note that only the Data Center (DC) edition of Windows is compared against the various editions of vSphere. To use any other Windows version in an enterprise virtualization platform would simply not make sense and would drive pricing through the roof due to Microsoft's general DC-only virtualization policies.
In addition, when it comes to server virtualization, my organization (Westminster College) is a VMware vSphere/ESX shop, but I am also keeping my eye on Hyper-V. I stayed as unbiased as possible in this cost comparison.
Cost comparison
Table A shows you this comparison, along with two costing options. Below the table, I provide more detail.
Table A
Click the image to enlarge.
License model. The method by which the product is licensed. This is either per host or per processor.
List price. This is the published list price for each component based on the license model. For example, for vSphere, the list price is per processor, as indicated in the row above.
VMs/host. How many virtual machines will run on each physical host? Originally, I gave an advantage to vSphere due to the product's memory overcommitment capabilities, among other things. I feel that VMware's features give it a significant capacity edge over Hyper-V. However, I decided to keep the comparison as streamlined and consistent as possible. In order to do so, I needed to keep the capacity information consistent. You will note that pricing Option 2 shows what could happen when you take into account vSphere's increased VM density.
Total VMs. How many total virtual machines will be hosted by the infrastructure?
Req'd hosts. Based on the inputs from the VMs/host and Total VMs rows, how many hosts are needed to support this environment?
Host processors. How many processors are installed in each physical host? Since some products are licensed on a per-processor/per-socket basis, this is important.
VM OS. What operating system will run inside each virtual machine in the environment? For the sake of comparison, I indicate that every VM will run Windows Server Standard. In the real world, this is highly unlikely, but it does provide a good baseline software cost comparison.
Management. What management tool or tools will be used to manage the virtual infrastructure? For vSphere, vCenter is your choice. For Microsoft, there are various options, but at the density levels in the table, using Microsoft's Server Management Suite Data Center, which is pretty expensive and licensed per processor. There are other management options for Hyper-V, so don't take what you see here as the final word. Consider the issue of management software carefully and buy only what you need. Note that this suite includes only CALs for individual management tools, such as Operations Manager; you still need to separately license the Operations Manager server. The same holds true if you decide to use Configuration Manager and/or Data Protection Manager. Those CALs are also included in the suite, but the server license is a separate deal.
Management license model. As is the case with the hypervisor, the management software is licensed either per host or per processor.
Management list price. What is the list price for the management software based on the license model?
Windows Server. How much does Windows Server Standard cost?
Hypervisor Costs. What is the total cost of the hypervisor software based on the inputs?
Windows Server Costs. At first glance, how much do the individual Windows Server Standard virtual instances cost? There is a $0 amount in the Hyper-V column because Windows Data Center includes unlimited virtual instances of Windows Server, any edition. If you were to run this infrastructure on Hyper-V on Windows Server Enterprise, you'd pay a whole lot for those virtual instances since only four are included with an Enterprise license.
Management Costs. How much does the management software cost? From everything I've read, the Microsoft management product is licensed per physical host, thus making the management costs go through the roof.
Total. What is the total cost of the solution?
Option 1
This is an extremely important and cost saving option… and it's legal. Several years ago, Microsoft made the following statement regarding the unlimited virtualized instances allowance in the Windows Server Data Center license:
"Licensing does not depend on which virtualization technology is used. With all processors in a server licensed for Windows Server 2003 R2, Datacenter Edition, you can run one instance of the software in a physical operating system environment and an unlimited number of instances in virtual operating system environments. With VMWare GSX Server or SWsoft Virtuozzo, this means you can run one physical instance plus unlimited virtual instances. With VMWare ESX Server, it means you can run unlimited virtual instances because there is no need for a physical instance."
This means that you can run any hypervisor you want and, as long as you also buy a Windows Server DC license to apply to that physical host, you can run as many Windows Server instances as you like on that server. This basically means that you're buying software you'll never use — Windows Server DC — but if you do that math, you can see that having the ability to run as many copies of Windows as you like on a virtual host can quickly add up to a lot of savings. For a dual processor server, a DC license would cost about $6,000. It would take only two virtual enterprise instances or six virtual standard instances to hit the breakeven point. Since this example assumes 10 VMs per host, there are a lot of savings.
Option 2
This option shows the possible effect of vSphere's increased VM density.
Final notes
Again, the values I placed in the table are only for comparison. I'd expect to see higher densities on VMware hosts, which quickly brings down the cost. As you eliminate VMware hosts due to density increases, you get just about $7,000 back per server ($3,495 x 2 processors), and you also save on the associated Windows DC license ($6,000 - $2,999 x 2 processors). For example, suppose you increase the density to 15 VMs per server under vSphere Enterprise Plus. In this case, your total cost would drop from $199,815 to $134,875, which isn't too far off the Hyper-V cost. If you need fewer features, you can license vSphere Standard or Advanced and actually save money on the VMware solution.
If you want to play around with the numbers in this cost comparison, the table is available as a downloadable Excel spreadsheet.