1. Virtualization: The Right Investment for a Tough Economy Andy Powell VMware apowell@vmware.com 860-875-4039

2. Agenda Where we are What is Virtualization? – The very basics Why Virtualization is a Strategic Investment Cost reduction – CapEx / OpEx Productivity Business Continuity – Disaster Avoidance Desktop Virtualization Proven Customer Success

3. The Problem Overwhelming complexity >70% of IT budgets just to keep the lights on <30% of IT budgets goes to innovation and competitive advantage

4. The Mission – “Make the Plumbing Disappear!” “Make the plumbing disappear – in the Datacenter, in the Cloud, on the Desktop…” “How can I extend my server and storage investment?” “How can I deploy new services faster and with less effort/training?” “How can I make my applications, esp. email, more available?” “How can my backups be faster and more predictable?” “How can I stop worrying about daily IT operations and plan for the future?”

5. Agenda Where we are What is Virtualization? – The very basics Why Virtualization is a Strategic Investment Cost reduction – Capex / Opex Productivity Business Continuity – Disaster Avoidance Desktop Virtualization Proven Customer Success

6. Recent CIO Surveys Agree: Virtualization is the Top CIO Priority in a Tough Economic Environment Source: Merrill Lynch CIO Survey, Oct 28 th, 2008 Source: Goldman Sachs IT Spending Survey, Nov 2nd, 2008 “The current environment has moved virtualization toward the top of the priority list for CIOs.” “Total cost of ownership (TCO) reductions will be a key driver of the acceleration in server virtualization deployments as CIOs are forced to cut capital spending and reign in management, administrative and power/ cooling costs.”

7. Hardwa re Virtualized World Physical World What is Virtualization? Traditional x86 Architecture Legacy rule: Run only one application per server because single application crashes result in OS or server failure Typical hardware utilization under 8% Virtualization: New rule: Run multiple applications per server because OS/applications are isolated from one another Typical hardware utilization 80%

8. Agenda Where we are What is Virtualization? – The very basics Why Virtualization is a Strategic Investment Cost reduction – Capex / Opex Productivity Business Continuity – Disaster Avoidance Desktop Virtualization Proven Customer Success

9. Virtualizations’s Business Impact Increase Staff Productivity Increase Application Availability Reduce Physical Infrastructure Cost 1 Increase Data Protection 2 3 4 3-Yr Cost Savings Opportunity 20 Servers50 Servers $290k$774k 1 month Payback 3 month Payback

10. Immediate Savings on Server Consolidation ATER VMware Before VMwareWith VMwareSavings in $Savings in % Servers203 Utilization8%80% Server HW 3 -Yr Cost$208,000$49,918$158,08276% Networking 3 -Yr Cost$17,649$4,412$13,23775% Real Estate, Power & Cooling$97,000$36,141$60,81974% VMware license and support cost$0$5,706($5,706) Shared storage 3 -Yr Cost$0$23,004($23,004) Total 3 Yr Capital Costs$322,649$119,181$203,468$63% Current System With Virtualization More applications per server = less servers to buy, power, and maintain Reduce Physical Infrastructure Cost 1 $200k+ 3-Yr Cost Savings! Source: VMware TCO Calculator – www.vmware.com www.vmware.com

11. Copyright © 2005 VMware, Inc. All rights reserved. Reduce Energy Consumption Copyright © 2005 VMware, Inc. All rights reserved. Highest consolidation rates on most secure and reliable virtualization platform Safely improve utilization rates 80% energy reduction Dynamic server and storage migration Power off unneeded servers in real-time Migrate storage dynamically 25% energy reduction Host desktop PCs in the datacenter Use thin clients, double refresh cycle Reduce storage for similar desktop images 70% energy reduction

12. Get More Done with Existing Staff % of IT Staff Time Spent on Maintenance With VMware 24% Do more work with the same number of people = operating cost savings Drivers of productivity improvements: Zero downtime maintenance Built-in high availability Dynamic patching Instant provisioning Increase Staff Productivity 2 Before VMwareWith VMwareSavings in $Savings in % Servers203 Utilization8%80% Server Provisioning 3 -Yr Cost$26,065$1,954$24,11193% Server Administration 3 -Yr Cost$139,971$120,374$19,59714% Automated Patching with VMware Update Mgr$57,375$15,501$41,87473% Total 3 Yr Staff Operating Costs$223,411$137,829$85,582$38% 72% $85k+ 3-Yr Productivity Savings! Source: VMware TCO Calculator – www.vmware.com www.vmware.com

13. Keep Your Business Running Automatic detection and restart of failed servers Increase Application Availability 3 Detects server failures and initiates the new virtual machine restart on a different physical server without human intervention Typical downtime per failure 4 hours Lost revenue per hour $14k* Lost staff productivity per hour $50/hour Average failures per year 2 Savings per Year$120k Average Downtime Costs* * Assumes company with 150 employees, 20 servers and $37.5m a year in sales (lost revenue is 10% of affected server time) How much does down time cost your business?

14. Copyright © 2005 VMware, Inc. All rights reserved. Ensures Data is Available and Recoverable Copyright © 2005 VMware, Inc. All rights reserved. Increase Data Protection 4 Built in data protection saves time and money Simplifies administration Faster recovery times Save on storage costs with disk de- duplication Less downtime = higher staff productivity

15. Virtualization’s business Impact Increase Staff Productivity Increase Application Availability Reduce Physical Infrastructure Cost 1 Increase Data Protection 2 3 4 3-Yr Cost Savings Opportunity 20 Servers50 Servers $290k$774k 1 month Payback 3 month Payback

16. Virtualization Offers Protection At Every Level NIC Teaming, Multipathing High Availability, Fault Tolerance, DRS Maintenance Mode, VMotion Storage VMotion Site Recovery Manager Component Server Storage Data Site VCB + 3 rd -Party Backup Solutions, vCenter Data Recovery* Protection against hardware failures Planned maintenance with zero downtime Protection against unplanned downtime and disasters VMFS

17. Transforming the Cost and Complexity of Business Continuity Cost Uptime Entry-Level Server High-End Server Failover Cluster Fault-Tolerant Configurations Mirrored Sites Traditional solutions are costly and complex Point solutions tied to HW, OS, or applications Virtualization reduces cost and complexity at each business continuity level Integrated with the VI platform HW, OS, app independent  Encapsulation  VMotion  HA  Shared Redundancy  DRS  FT  Site Recovery Manager  Isolation

18. Agenda Where we are What is Virtualization? – The very basics Why Virtualization is a Strategic Investment Cost reduction – Capex / Opex Productivity Business Continuity – Disaster Avoidance Desktop Virtualization Proven Customer Success

19. IT Needs To Bring Down Costs, but…  Thick or Thin?  Mobile or Not?  Windows or Mac or Linux? End Users Want Their Desktop To Follow Them  Want info to be accessibly anywhere, anytime  Don’t want info locked up in a single device  But don’t want to give up richness The Desktop Dilemma

20. Cost is driving PC alternatives

21. Unified Access Desktop Virtualization – High Level Clients Connection Broker Desktop Composer Virtualized Applications Offline Desktop Virtualization Infrastructure Virtual Desktops

22. Agenda Where we are What is Virtualization? – The very basics Why Virtualization is a Strategic Investment Cost reduction – Capex / Opex Productivity Business Continuity – Disaster Avoidance Desktop Virtualization Proven Customer Success

23. 23 Meet Service Levels Efficiently Using VMware virtual infrastructure, we can offer the same levels of service and more flexibility for up to 40 percent lower server and operating costs.” Rob Jones, Director of Technology, ALSTOM Reduce Costs “Using VMware software has brought a huge cost benefit to IT - avoiding costs by $1.1 million is fantastic. For every production virtual machine, we estimate a $7,500 cost avoidance per server. We multiply 150 applications by $7,500 and estimate a $1.1 million cost avoidance. Barry Naber, Technology Manager at International Truck and Engine Corporation Customer Testimonials Simplify Management The net impact of utility computing with VMware Infrastructure 3 for the business is higher service levels, for IT - it is simplified and easier to manage infrastructure. Fazil Habibulla, Vice President and System Architect, NATIXIS Capital Markets

24. OS APP OS APP Storage Networking Virtual Machines CPU Memory 64 cores and 1TB of physical RAM Hardware Scale Up Lowest CPU overhead Hardware Assist Purpose Built Scheduler Maximum memory efficiency Hardware Assist Page Sharing Ballooning Wirespeed network access VMXNET3 VMDirectPath I/O Greater than 300k iops per second Lower than 20 microsecond latency Storage stack optimization VMDirectPath I/O  Virtual hardware scale out 8-way vSMP and 255 GB of RAM per VM VM Scale Up CurrentNEW ESX OS APP OS APP OS APP Virtualization Optimization for the Largest Applications Add ed to scri pt

25. The Good News when there is Bad News Increase Productivity, Operational Flexibility and Responsiveness 3 Reduce Datacenter Operating Cost 2 Reduce Physical Infrastructure Cost 1 Less physical servers at both your production and disaster recovery site Free up servers for use as additional recovery resources Fewer servers to maintain means your IT staff can spend more time innovating Centralized, electronic DR plans are simpler and more cost-effective Automated DR means faster and more reliable recovery Non-disruptive DR testing Reduced risk of an expensive outage

26. Thank You!