Can App-V in the Cloud makes a good ROI even better?

Frugal IT executives looking for an edge in reducing costs are exploring and expanding virtual desktop infrastructure (VDI) solutions to help meet cost cutting goals. IDC research puts the cost of a typical PC at over $1,400 per year, consuming 20% or more of a typical IT budget. Contributing to the high cost of PCs is the difficulty in managing and maintaining standards in these distributed assets, application compatibility and change management, and PC security.

Delivering on the promise of VDI to cut costs, Microsoft App-V Application Virtualization (formerly SoftGrid) enables IT to securely deliver applications to the users as virtualized, centrally managed network services that never need to be installed on individual client PCs / devices.

How does this help reduce costs? Here are just a few examples:

· New applications: If a user needs a new application they simply request it. The client system pulls the application centrally from the App-V server with no need to install the application. The cached application and settings are saved locally so the application can run in disconnected mode, but when connected receive the latest with updates centrally controlled and managed (vs. pushed and installed to each client). This dramatically centralizes all packaging and management of applications and eliminates installation, and moreover distribution of patches and upgrades.

· Application patch or upgrade: If an application change such as an upgrade or patch needs to be made, the change does not need to be compatibility tested with each deployed PC system and configuration. The systems and OS are virtualized so that testing and remediation workloads are reduced by 90% or more. When the application is packaged and deployed the packaging is simplified because of a reduction in the number of different versions to deploy, and each user is automatically updated without having to package and push installs to the clients.

· Application retirement: If an application needs to be removed, it is done centrally as well.

· User change request: If a user should not longer want or need access to an application, rights can be changed using Active Directory.

According to IDC, the benefits of automated application delivery with App-V can deliver at least $120 in benefits per user per year.[1] Wipro PSA takes this analysis further looking beyond just the application delivery benefits to App-V’s impact on helping to implement other infrastructure optimization best practices. App-V combined with the other MDOP solutions is estimated to deliver over $230 in annual benefits per PC per year.[2]

For every 1,000 users using App-V for application delivery, a compelling $120,000 to $230,000 in IT labor productivity improvements and savings can be derived.

As it’s been said there is no free lunch, and as compelling as these benefits are, App-V does not come for free.

Licensing App-V is relatively straight forward and inexpensive. An organization needs to be covered by a Software Assurance agreement from Microsoft, and the MDOP suite can then be licensed. Incremental list price for this license are $10 per PC per year.[3] For 1,000 users, this would require only $10,000 in annual licensing costs at list price, and volume discounts may be available, driving this cost even lower.

However, the larger expense to an organization is in establishing and supporting the host server infrastructure needed to stream the applications. According to Microsoft estimates, App-V requires an estimated 1 server for every 800 corporate concurrent users, where the number of concurrent users is usually set to 50%-60% of the total user population, but can be higher depending on usage profiles of users. [4]

This ideal sizing metric is often affected by the number of remote or branch offices, where a local App-V host server will be required in order to support the users properly with adequate performance. In real world environments the number of servers is driven by a combination of topology / geography and user requirements, deriving an average of 250 users real-world per server versus the baseline / discussion sizing.

Virtualizing every 1,000 users with App-V will require the addition of on average 2 servers to support the delivery (using a 50% concurrency rate and considering real world geographic requirements).

For each new host server the average capital costs (using list pricing) are:

· $6,500 purchase price for the server hardware (2 CPU / 4 Core)
· $2,334 per enterprise OS license Windows Server 2008
· $1,290 per server for System Center Enterprise license
· $2,000 in networking, storage networking and other capital overhead additions per server

Each server will require setup and installation for the server, operating system and management solutions:
· 8 hours setup and install * $50 per hour = $400

This brings the total initial investment to $12,524 per server. For every 1,000 users, that would require just over a $25,000 investment.

These initial costs are typically amortized over the life of the server, in this case we will use three years, yielding an average amortized initial cost per server of: $4,175 per year.

On-going costs for the server infrastructure to support App-V should not be ignored when calculating the total cost of ownership. On average each server:

· $1,800 annual cost for energy (power and cooling)
· $1,200 annual cost for data center space
· 75.2 hours per server per year in server admin/ops overhead * $50 per hour = $3,760

This totals an additional $6,760 per server per year.

In total, almost $11,000 per server per year in ownership costs is required for each server needed to support the App-V installation. For our 1,000 user example, this totals $22,000 per year.

In total for our 1,000 user example, the investment required for the server infrastructure is:
· $10,000 per year for licensing
· $22,000 per year for infrastructure
· $32,000 total per year, or $32 per user per year.

For some installations, these host server costs may be too conservative as topology requirements or benchmarks prove that more servers are needed to maintain and support the users and workloads. In our experience, these costs are average, but could easily be tripled with a compute intensive / more distributed topology.

Storage is required as well to support the App-V infrastructure. For a typical installation, storage is required for the App-V program instances, application delivery packages, user storage pools and sequencer cache. A. The size of this storage pool required will vary based on the number of application packages to deliver. Finding information on exact storage requirements is difficult. The application itself requires 1GB for all the server components, while cache, application delivery package, storage pools are installation dependent. For a typical 1,000 user environment:

· 120 applications each consuming 5 GB on average each, yields 600GB needed.
· 500MB per user storage for each of 1,000 users = 500GB.

For this 1,000 user environment, at least a TB will be required, and likely more if more user storage or more applications are to be supported.

For storage, at least $5 per GB should be allocated for the procurement of the storage (often not linear because subsystems may need to be purchased to support base capacity), and an additional $3 per GB per year for storage management, disaster recovery, energy and space costs. For our 1,000 user example, the average storage costs per year are expected to be almost $5,000 additional per year, an additional $5 per user per year.

Even with storage costs and potentially higher server costs for some, the ROI is strong for App-V, exceeding 600% in almost all projects we have examined.

Want an even better ROI?

For those environments where resources are scarce to setup and support the App-V infrastructure, the capital investment is not available or infrastructure investments are reserved for other projects, FullArmor offers a new and innovative solution, making App-V available via Microsoft Azure™ Services Platform - a comprehensive Microsoft services platform for cloud computing.

For those of you not familiar with FullArmor, the organization has been helping large organizations successfully manage their IT user policy and endpoint security with solutions based on Microsoft® products and technologies, including the Active Directory® service, Group Policy, and the Windows PowerShell™ command-line interface. Its products for policy management are well known to users of NetIQ solutions, who sell former products to supplement their management product line. A Boston-based Microsoft Gold Certified Partner, serves large organizations such as Boeing, the Federal Bureau of Investigation, Eli Lilly, Wal-Mart, and Bank of America, and it has a customer base of more than 5 million users and 1,500 organizations worldwide.

With FullArmor’s PolicyPortal solution, which customers use to manage networks that include PCs outside of Active Directory® domains, App-V can be hosted in the cloud on Azure.

With the desktop virtualization solution available from the cloud, the organization essentially outsources the infrastructure to support App-V to Microsoft including requirements for servers and storage. Availability and performance are managed by Microsoft and the huge investment it has made in its data center.

The challenge with App-V in the cloud, especially for small and medium businesses, is management and administration of the managed PCs. With the FullArmor PolicyPortal, organizations maintain network security by extending their directory-based policies over the Internet. A small piece of software resides on the client PC to communicate with the PolicyPortal application. Then, from a central location, administrators can manage PCs; set up user policies; distribute applications and updates; monitor the health of specific PCs; manage PC inventories; and perform security procedures such as remote data wipes in the event that a PC is lost or stolen. Through the use of the Microsoft .NET Workflow Service and Microsoft .NET Service Bus, administrative tasks are performed automatically, which minimizes or eliminates the need for intervention by the users of the targeted PCs.

Particularly appealing for small and medium businesses, this solution can help companies take advantage of the $120 benefits per desktop per year that desktop virtualization can deliver, with little investment and work in establishing and managing the infrastructure to support the solution. As PolicyPortal also includes key features to help standardize and manage client computers, the benefits extend beyond those of App-V to at least $230 per PC per year according to IDC research on implementing desktop standardization.

App-V served from Microsoft Azure using PolicyPortal can save $37 per user per year and help deliver on benefits of over $120 per virtualized desktop. Using PolicyPortal to manage desktop standardization can drive an incremental $110 per PC per year in annual savings, and allow organizations to potentially avoid additional infrastructure by providing Active Directory and Group Policy administration without having to add Active Directory infrastructure.

Additional information can be found in these research white papers

FullArmor - Solution Provider Delivers Flexible Policy Solution with Cloud-Based Platform

IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT
Labor Costs and Best Practices for Managing the Windows Desktop,” Doc #203482, October 2006, IDC.

Wipro Product Strategy and Architecture Practice’s Analysis of Features,
Cost Benefits, and Effects on IT Best Practices that Improve IT Infrastructure
Optimization March 2007 Wipro PCA


[1] IDC White Paper sponsored by Microsoft, “Optimizing Infrastructure: The Relationship Between IT Labor Costs and Best Practices for Managing the Windows Desktop,” Doc #203482, October 2006, IDC.

[2] Wipro Product Strategy and Architecture Practice’s Analysis of Features,Cost Benefits, and Effects on IT Best Practices that Improve IT Infrastructure Optimization, March 2007, Wipro PCA

[3] According to WiPro: Software Assurance is available on both Microsoft’s Select and Enterprise Agreement licensing programs and costs between $35 and $55 per PC, depending on the specific license each organization has with Microsoft. MDOP is an add-on service available to Software Assurance and is available to organizations with select A licensing for $10 per PC per year. Other licensing agreements are available that may increase or decrease the cost to add MDOP to a Software Assurance subscription.



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