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Customers remain skeptical of HCI vendors' low-cost claims

HCI vendors claim that the cost benefits of hyper-converged technology drives interest in vSAN and other similar offerings, but customers beg to differ.

At a glance, it's easy to see the appeal of hyper-converged infrastructure: It takes the disparate software components in your data center and neatly wraps them together in a single hardware package. A single appliance cuts down on the administrative overhead associated with traditional or even converged infrastructure. And if HCI vendors are to be believed, it'll save you money, too.

At least, that's Vahid Fereydouny's assertion, a senior product line manager at VMware. During a session titled "vSAN and the HCI Landscape," Fereydouny claimed that cost was the primary motivation behind customer interest in vSAN and other HCI technologies, but session attendees weren't convinced. According to one attendee, most HCI vendors are cagey when it comes to talking cost, making it difficult to determine just how cost-effective HCI could be.

However, this reluctance to talk cost isn't simply an evasive maneuver -- it's a tactical approach from HCI vendors, one that acknowledges the complexity of pricing hyper-converged systems. 

HCI cost considerations

Forget can't see the forest for the trees -- when it comes to evaluating HCI costs, many customers focus on the bigger picture and fail to look at the details.

"One of the challenges [associated] with HCI is ensuring [that] all of the pieces you might need to adjust are accounted for," said Brian Kirsch, IT architect and instructor at Milwaukee Area Technical College.

One of the challenges [associated] with HCI is ensuring [that] all of the pieces you might need to adjust are accounted for.
Brian KirschIT architect and instructor, Milwaukee Area Technical College

"While it's easy to focus on the central storage aspect, [many customers] overlook the connection costs." Potential buyers should also assess whether they need to change their backup strategy to adjust to a more decentralized storage design and whether their deduplication technologies would still apply, Kirsch said.

Although the initial price of an HCI offering is fixed, the overall cost of investment can quickly add up depending on the size and scale of your environment. For customers whose goal is to reduce complexity in their data centers, keeping track of these accumulating costs can cause a serious headache and potentially negate the proposed value of deploying an HCI system.

In a traditional environment, you need to calculate storage, compute and networking into the total cost of ownership (TCO). HCI combines storage and compute to reduce TCO, but hidden costs can arise when you size and scale compute, storage and network.

If you're considering an HCI appliance, ask for a forward-looking quote. Find out well in advance how much it would cost to add a node or to add storage a few years down the line, said Ori Broit, senior product marketing manager at VMware.

"These are the things many vendors significantly discount upfront," Broit said. "But when customers want to increase the amount of storage […] prices go up because, by then, the customer's locked in."

Another factor that affects TCO is whether you use a prebuilt vendor-supplied appliance or use commodity hardware to build one yourself. Although a prebuilt appliance typically costs more, it can save the administrator the time and effort of sizing and ordering servers, connecting them to the environment and purchasing software licenses. Prebuilt appliances also save you the hassle of handling support on your own, which is often an issue in production systems. The main appeal of HCI technology is its simplicity, not the cost, many session attendees said.

However, this doesn't necessarily mean that prebuilt appliances are easy to use. HCI vendors, like VMware and Hewlett Packard Enterprise (HPE), tout the simplicity of their appliances, but a potential buyer still needs to choose hardware components -- which come at different costs -- and might need to hire an engineer to put all the pieces together. Ultimately, there's merit to both a prebuilt appliance and building one yourself; take care to consider the cost of each option thoroughly before you make a decision.

Finally, be sure to factor maintenance into your TCO. You might be able to purchase a one-year maintenance contract at a significant discount but find that you need to pay a much higher price the next year when repurchasing maintenance. When you evaluate TCO, "The real question is: What is the purpose of this system?" Kirsch said. "That will drive many of [your] purchasing decisions."

VSAN vs. competitors

Compared to similar HCI systems, like those HPE and Nutanix offer, VMware vSAN is entirely software. An administrator can use the vCenter UI as a central control panel to assign storage policies, such as deduplication, compression and encryption, on a per-VM or per-VMDK basis. Ready Nodes -- hyper-converged nodes designed to support vSAN -- come in a number of different configurations to eliminate the risk of hardware-software incompatibility and make it easier to install HCI software on servers.

Hypervisor licensing is another cost consideration when it comes to shopping for an HCI system. A number of HCI systems on the market include a license-free hypervisor, such as Nutanix Acropolis Hypervisor, but there's no such thing as a free lunch.

Free hypervisors typically aren't as good at consolidation ratios as their paid counterparts, like vSphere, Broit said. This means customers will need more servers for the same amount of VMs and could end up paying more for hardware than for software.

No matter how you slice it, HCI systems, including vSAN, won't come cheap. It is likely for this reason that session attendees were so adamant in their refusal of the notion that cost drives interest in HCI. Instead, those looking to buy a hyper-converged offering come into it ready to swallow the bitter pill of high costs, so long as it provides the simplicity that HCI vendors advertise; that said, an awareness of your environment and attention to detail can go a long way toward keeping TCO as low as possible.

Next Steps

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This was last published in September 2017

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Do you think the proposed benefits of HCI justify the cost -- why or why not?
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First of all, I'd like to commend Marissa for writing this post and discussing the importance of cost. That being said, there is a tremendous amount with which I disagree. This is probably to be expected. I've built my 30-year IT industry career on financial modeling, and head a team of 5 (and growing) business value analysts at Nutanix that engage in financial comparisons for customers across the globe. In short, I have tremendous data and experience with which to draw upon. 

I do want to address one particularly egregious misunderstanding. Even disregarding the competitive pressure from 40 (and growing) HCI manufacturers, HCI customers should have no need to be concerned with rising prices down the road. There are 2 reasons for this. The first is, that unlike a SAN which uses proprietary storage controllers of a certain model, HCI uses commodity HW that benefits from enhanced performance wrought by Moore's Law. As an HCI deployment expands over time, fewer and fewer nodes are required to run the same use case. If we assume just a 25% annual increase in density per node, then in 5 years only 37% of the nodes are required to run the same workload as in year 1. 

This second reason is that unlike a SAN which has firmware that is tightly coupled with the underlying proprietary HW, an HCI environment can easily be upgraded with the latest and greatest HCI software. For example, Nutanix (which by the way is just SW) includes extremely simple 1-click upgrades that increase the performance and capacity of existing nodes. So without touching any of their nodes, and regardless of geographic location, Nutanix customers are able to run considerably more VMs on existing nodes - even those which are years old. This then further reduces the number of newer nodes required as the footprint expands.
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