VMware to Azure VMware Solution Migration ROI Calculator

Overview

This web-based calculator provides a comprehensive Total Cost of Ownership (TCO) and Return on Investment (ROI) analysis for migrating from on-premises VMware infrastructure to Azure VMware Solution (AVS). The calculator uses established financial methodologies to evaluate migration benefits, costs, and modernization opportunities.

Key Features

• Enhanced node type support: Choose from AV36, AV36P, AV52, and AV64 based on workload requirements
• Two cost calculation methods: Fixed annual cost or detailed breakdown
• VMware license inflation modeling: Accounts for Broadcom-driven VMware cost increases
• Hardware refresh planning: Automatically factors in refresh cycles and timing
• Optional modernization analysis: Evaluates savings from moving to native Azure services (defaults to £0)
• Simplified core migration costs: Focus on assessment, professional services, downtime, and service transition
• Streamlined partner funding: Microsoft migration funding, Azure credits, and additional incentives
• Detailed calculation breakdowns: Step-by-step explanation of all calculations
• Simplified financial metrics: ROI, payback period, and total cost savings
• Comprehensive documentation: Built-in methodology and formula explanations

Calculator Structure

The calculator is organized into six main tabs:

1. Current Environment Tab

Purpose: Capture baseline costs of your existing on-premises VMware environment.

Cost Calculation Methods

Fixed Annual Cost Method:

• Input: Total Annual On-Premises Cost (£)
• Why: Simplified approach using a single cost figure
• Formula: On-Premises Annual Cost = Fixed Annual Cost
• Hardware Estimation: Hardware Portion = 50% of Fixed Cost (for refresh calculations)

Detailed Cost Breakdown Method:

• Infrastructure Costs (Annual):

  • Hardware Depreciation/Lease (£) - Server hardware costs including depreciation
  • VMware Licensing (£) - vSphere, vCenter, vSAN, NSX licensing and support
  • Storage Hardware (£) - SAN, NAS, direct-attached storage costs
  • Network Equipment (£) - Switches, routers, firewalls, load balancers
  • Backup Hardware/Software (£) - Backup solutions and offsite storage
  • Support Contracts (£) - Hardware and software maintenance contracts

• Facilities & Operations (Annual):

  • Data Centre Space (£) - Rack space, colocation, facility costs
  • Power & Cooling (£) - Electricity, UPS, HVAC costs
  • Staff Costs (£) - IT personnel managing VMware infrastructure
  • Internet/Connectivity (£) - ISP, MPLS, dedicated line costs

Formula:

On-Premises Annual Cost = Infrastructure + Operations
Infrastructure = Hardware + VMware Licensing + Storage + Network + Backup + Support
Operations = Data Centre + Power/Cooling + Staff + Connectivity
Hardware Portion = Hardware + Storage + Network Equipment

Hardware Refresh Planning

• Hardware Purchase Date - When current hardware was acquired
• Hardware Refresh Cycle (Years) - Typical refresh frequency (3-5 years)
• Refresh Cost Multiplier - Cost increase for newer technology (e.g., 1.15 = 15% increase)
• Percentage to Refresh (%) - What portion needs refreshing

Formulas:

Current Age = (Today - Purchase Date) / 365.25 days
Next Refresh Year = Ceiling(Current Age / Cycle) × Cycle
Refresh Cost = Hardware Portion × Cost Multiplier × (Refresh % / 100)

Environment Details

• Number of VMs - Total virtual machines
• Total vCPUs - Virtual CPU cores allocated
• Total RAM (GB) - Memory allocated across VMs
• Total Storage (TB) - Storage consumed by VMs

2. Azure VMware Solution Tab

Purpose: Configure Azure VMware Solution costs and services.

AVS Configuration

• AVS Node Type - Choose from AV36, AV36P, AV52, or AV64 based on performance needs
• Number of AVS Nodes - Minimum 3 nodes required, size for capacity + 25% headroom
• Reserved Instance Term - Pay-as-you-go, 1-year, or 3-year reserved instances
• Azure Hybrid Benefit - Use existing Windows/SQL licenses for additional savings

Node Type Characteristics:

• AV36: Balanced compute and memory, ideal for general workloads
• AV36P: Enhanced memory (768GB vs 576GB), perfect for memory-intensive applications
• AV52: High-performance with maximum memory (1536GB) and storage (30.72TB), suitable for demanding workloads
• AV64: CPU-optimized with 64 cores but lower memory (512GB), ideal for compute-intensive applications

Node Costs (Monthly, GBP):

• AV36: £7,000 (PAYG), £5,600 (1-year), £4,200 (3-year) - 36 cores, 576GB RAM, 15.36TB vSAN
• AV36P: £9,350 (PAYG), £7,480 (1-year), £5,610 (3-year) - 36 cores, 768GB RAM, 15.36TB vSAN
• AV52: £14,000 (PAYG), £11,200 (1-year), £8,400 (3-year) - 52 cores, 1536GB RAM, 30.72TB vSAN
• AV64: £11,200 (PAYG), £8,960 (1-year), £6,720 (3-year) - 64 cores, 512GB RAM, 15.36TB vSAN

Formulas:

Monthly AVS Cost = Node Cost × Number of Nodes × Pricing Tier
Azure Hybrid Benefit = 40% savings on compute portion
Total Monthly Azure Cost = AVS Nodes + Additional Services

Additional Azure Services (Monthly)

• ExpressRoute (£) - Dedicated private connection to Azure
• Azure Backup (£) - Backup service costs based on data volume
• Data Transfer (£) - Outbound traffic, VPN, cross-region charges
• Monitoring & Management (£) - Azure Monitor, Log Analytics, Security Center
• Additional Storage (£) - Extra storage beyond AVS nodes
• Security Services (£) - Azure Security Center, Sentinel, Key Vault

3. Modernisation Tab

Purpose: Identify workloads that can move to native Azure services instead of AVS.

Note: All modernisation values default to £0, making this section completely optional. Only configure if planning to modernise workloads to native Azure services.

Application Modernisation

• VMs Moving to Azure VMs (%) - Percentage moving to native Azure compute
• Applications to PaaS (Count) - Apps moving to App Service, Functions
• Databases to Managed Services (Count) - DBs moving to Azure SQL, MySQL, etc.
• File Servers to Azure Files (Count) - File servers replaced by Azure Files

Modernisation Impact

• AVS Node Reduction (Count) - Nodes eliminated through modernisation
• VMware License Reduction (%) - Licensing cost reduction
• Modernisation Timeline (Months) - Time to complete modernisation
• Modernisation Investment (£) - One-time modernisation costs

Native Azure Service Costs (Monthly)

• Azure VMs Cost (£) - Native Azure compute costs
• PaaS Services Cost (£) - App Service, Functions costs
• Managed Database Cost (£) - Azure SQL, managed database costs
• Azure Storage Cost (£) - Files, Blob storage costs

Formulas:

Modernisation Start Year = Ceiling(Timeline in Months / 12)
Node Savings = Nodes Saved × Node Cost Per Year
Modernisation Savings = Node Savings - Native Azure Service Costs

4. Migration Costs Tab

Purpose: Capture one-time migration investment costs and partner funding.

One-Time Migration Costs

• Assessment & Planning (£) - Discovery, workshops, architecture design
• Professional Services (£) - Microsoft/partner services for migration execution
• Downtime/Business Impact (£) - Cost of business disruption during migration
• Service Transition Cost (£) - Optional costs for service transition and operational readiness
• Contingency (%) - Buffer for unexpected costs (typically 10-20%)

Cloud Partner Funding & Incentives

• Microsoft Partner Migration Funding (£) - Migration funding provided by Microsoft to qualified partners (typically £10,000-£50,000+)
• Azure Consumption Credits (£) - Azure credits to offset initial consumption costs (often £5,000-£25,000)
• Additional Partner Incentives (£) - Other partner incentives such as go-to-market funding and marketing co-op (default £0)

Formulas:

Base Migration Costs = Assessment + Professional Services + Downtime + Service Transition
Gross Migration Investment = (Base Migration Costs × (1 + Contingency%)) + Modernisation Investment
Total Partner Funding = Migration Funding + Azure Credits + Additional Incentives
Net Migration Investment = Max(0, Gross Investment - Partner Funding)

Migration Timeline

• Migration Timeline (Months) - Time to complete initial AVS migration

5. Documentation Tab

Purpose: Comprehensive explanation of calculation methodology, formulas, and assumptions.

Core Financial Formulas

Return on Investment (ROI):

ROI = [(Total Savings - Total Investment) / Total Investment] × 100

Where:
- Total Savings = Sum of annual cost savings over analysis period
- Total Investment = Net migration costs after partner funding

Payback Period:

Payback Period = Time when Cumulative Savings ≥ Total Investment
Simple calculation showing when investment will be recovered through cost savings

Total Cost Savings:

Total Savings = Σ(t=1 to n) [Annual Savings in Year t]
Sum of all cost savings over analysis period, accounting for growth and modernisation

Growth and Timing Calculations

Annual Cost Growth:

Cost in Year t = Base Cost × (1 + Growth Rate)^(t-1)

Hardware Refresh Timing:

Hardware Age = (Current Date - Purchase Date) / 365.25
Next Refresh = Ceiling(Hardware Age / Refresh Cycle) × Refresh Cycle
Years Until Refresh = Next Refresh - Hardware Age

6. ROI Analysis Tab

Purpose: Configure financial analysis parameters and display comprehensive financial analysis results and breakdowns.

Financial Analysis Parameters

• Analysis Period (Years) - Time horizon for ROI analysis (typically 3-5 years)
• Annual Growth Rate (%) - Expected IT cost inflation (typically 3-5%)
• VMware License Inflation (%) - Annual VMware license cost increases if staying on-premises (typically 5-15% due to Broadcom acquisition)

Key Metrics Displayed

• Return on Investment (ROI) - Percentage return on migration investment
• Payback Period - Time to recover initial investment through savings
• Total Cost Savings - Sum of all cost savings over analysis period
• Gross Investment - Total upfront costs before partner funding
• Partner Funding - Total funding and incentives received
• Net Investment - Actual customer investment after partner funding
• Modernisation Savings - Additional savings from native Azure services

Detailed Breakdowns

Annual Cost Comparison Table:

• Year-by-year comparison of on-premises vs Azure costs
• Hardware refresh costs highlighted when they occur
• Modernisation savings shown after modernisation timeline
• Cumulative savings tracking

Cost Breakdown Summary:

• Category-by-category comparison of cost structures
• Difference calculations showing savings/costs per category

Detailed Calculation Breakdown:

• Step-by-step calculation methodology
• Base cost calculations with method explanations
• Azure VMware Solution cost breakdown with node specifications
• Migration investment calculations including partner funding
• Growth rate applications and VMware license inflation impact
• Complete ROI and payback period calculation formulas

Key Assumptions

1. Fixed Cost Method: Hardware represents 50% of total costs, VMware licensing represents 20%
2. Staff Reduction: 30% reduction in staff costs with Azure (breakdown method)
3. Growth Rates: General inflation applied to infrastructure and operational costs
4. VMware License Inflation: Higher inflation rate applied specifically to VMware licensing costs (typically 5-15% annually)
5. Hardware Refresh: Occurs when equipment reaches refresh cycle age
6. Modernisation: Savings begin after modernisation timeline
7. Currency: All costs in GBP (£)

Limitations

• Does not include intangible benefits (agility, innovation, scalability)
• Azure pricing is estimated and may vary by region and contract terms
• Assumes steady-state operations after migration completion
• Does not account for business disruption during migration
• Hardware refresh timing assumes uniform equipment age

Usage Instructions

1. Start with Current Environment: Choose cost calculation method and enter baseline costs
2. Configure Azure Solution: Size AVS environment and select node type and pricing options
3. Plan Modernisation (Optional): Identify workloads for native Azure services (all defaults to £0)
4. Estimate Migration Costs: Focus on core costs - assessment, professional services, downtime, and optional service transition
5. Review Documentation: Understand methodology and assumptions
6. Set Analysis Parameters: Configure financial analysis parameters (analysis period, growth rate, VMware license inflation)
7. Calculate ROI: Generate comprehensive financial analysis

Technical Requirements

• Modern web browser with JavaScript enabled
• No server-side dependencies required
• Single HTML file for easy deployment and sharing

File Structure

├── index.html          # Complete calculator application
└── README.md          # This documentation file

Mathematical Validation

All formulas follow practical IT investment analysis principles:

• ROI calculation follows standard investment analysis methodology
• Payback period uses simple cumulative cash flows for clarity
• Growth rates applied using compound interest formulas
• VMware license inflation accounts for real-world Broadcom pricing changes
• Detailed calculation breakdowns provide full transparency
• Simplified approach focuses on practical migration decisions

Support and Maintenance

This calculator provides a framework for migration cost analysis. Users should:

• Validate Azure pricing with current Microsoft pricing sheets
• Adjust assumptions based on specific organizational factors
• Consult with Azure specialists for complex migration scenarios
• Update calculations as business requirements change