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Principled Technologies, Inc.: Initial investment payback analysis: Dell PowerEdge R710
solution with VMware ESX vs. HP ProLiant DL385 solution
OPM in each VM equivalent to that of the HP ProLiant DL385 solution. The total number of VMs the Dell
PowerEdge R710 solution could handle determines the replacement factor. Based on our specific workload, the
replacement factor is seven. Figure 1 depicts this replacement factor for replacing seven AMD Opteron 254-
based HP ProLiant DL385 solutions with a single Intel Xeon Processor X5550-based Dell PowerEdge R710
solution, as well as the initial investment payback time of under 18 months.
Figure 2 graphs the payback period and the cost savings of the Dell PowerEdge R710 solution. Savings continue
after the initial investment payback period. By the end of year two, we project a savings of $16,268. The line
representing the Dell PowerEdge R710 solution accumulates the initial investment cost and the monthly costs of
the solution. The initial investment cost includes the list price of the server and half of the cost of the shared
storage, as well as the costs of migrating from the seven HP ProLiant DL385 solutions to the newer Dell
PowerEdge R710 solution. The line for the seven HP ProLiant DL385 solutions shows the accumulated monthly
costs of seven HP ProLiant DL385 solutions. The lines cross at the end of the payback period. Appendix C
describes the payback period calculation.
Breakeven at
$60,016
in 17.6 months
$44,557
initial investment
$16,268
savings at 2 years
$46,680
savings at 3 years
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
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Dell PowerEdge R710 solution can pay back the initial investment in under 18
months
Seven HP ProLiant DL385 solutions Dell PowerEdge R710 solution
Payback period Initial investment
2nd year savings 3rd year savings
Figure 2: The payback period and cumulative estimated costs
1
for the seven HP ProLiant DL385 solutions and the Dell
PowerEdge R710 solution with VMware ESX. Lower costs and higher savings are better.
Costs for the Dell PowerEdge R710 solution include the initial investment of $44,557 plus annual costs of
$10,552, for a total year-one and -two cost of $65,660 for the solution. This solution could save approximately
$16,268 by year two over the $81,928 two-year costs for the seven HP ProLiant DL385 servers and HP
StorageWorks MSA30 storage arrays that this solution can replace. Figure 3 shows the specific areas of savings.
Specifically, it shows that the investment costs of buying the server and storage hardware and of migrating from
the older to the newer solution are offset by savings for the Dell PowerEdge R710 solution in hardware support
costs, software licenses, software support agreements, facility costs (including switch costs), energy costs, and
management costs.
1
We divide annual costs by 12 and do not adjust for inflation.