We often hear organizations considering or espousing a “cloud-first” policy in the hope of enabling the agility and faster time to market that they haven’t been able to achieve with a traditional SAN-based infrastructure. For example, this Chief Cloud Officer for a global real estate company told us this a while ago in a discussion (note that they have since become a Nutanix customer):
“I get the whole idea of Nutanix bringing public-cloud like agility, simplicity, & scalability to my own datacenter – but we’re just going to stick with our public cloud provider because they’re really cheap.”
On the other hand, both the migration and operating costs of lifting and shifting applications to public cloud is typically much more expensive than expected. What many are finding, like the Chief Cloud Officer quoted above, is that public cloud can be cheaper than legacy approaches, but not versus new technologies built on HCI that still provide a public cloud-like experience.
A recent IDC White Paper, sponsored by Nutanix, Organizations Leverage Nutanix Enterprise Cloud as Scalable, High-Performing, and Cost-Effective Infrastructure Foundation, shows that while deploying Nutanix Enterprise Cloud enabled an average of 62% lower cost of operations vs. legacy and alternative environments over five years, the most significant financial benefits by far result from an increase in business productivity as customers take advantage of the cloud qualities delivered by Nutanix including agility, simplicity, and fast, incremental scaling.
Nutanix and the IDC Study
Nutanix, for the third time in the last five years, commissioned a January 2020 white paper from IDC (you can download the report here) detailing the benefits of deploying enterprise applications on Enterprise Cloud. As was the case with both the 2015 and 2017 surveys, IDC conducted independent interviews and analysis of Nutanix customers across North America, Asia-Pacific, and Europe/North Africa. In this study, participant organizations averaged 31,286 employees, 794 IT staff, 213 applications and 494 Nutanix nodes running 3,678 VMs.
As you can see in the chart above, IDC calculated that Nutanix solutions provided infrastructure savings averaging $381,800 per organization (38% reduction), increased IT staff productivity of $2,303,300 (58% improvement), Risk Mitigation/User Productivity Benefits of $2,928,400, and a significant $7,831,400 in increased business productivity or 58% of total benefits. IDC calculated a strong average 5-year ROI of 477% with a payback period of 9 months.
The 2020 study also shows, in comparison with the earlier reports, continued significant benefits in both overall TCO percentage reduction and in average business productivity benefits per organization.
|5-Yr TCO Reduction||62%||60%||58%|
|Avg. Annual Business Productivity Benefits Per Org||$7,831,400||$2,440,000||$943,495|
Cloud is a Methodology, Not a Destination
“Nutanix is interested in creating and driving business value for us, while other companies focused on selling boxes. . . With Nutanix, the discussion was more around creating value for us and being connected.”
-Nutanix customer quoted in the IDC White Paper
Nutanix Enterprise Cloud enables customers to marry the benefits of public cloud-like agility and productivity with the low cost and control of an on-premises environment. IT teams shift their time to projects that are value additive to the business instead of just relegating those teams to simply “keeping the lights on.”
Nutanix customers participating in the IDC study slashed their cost and time associated with dealing with their IT infrastructure, including a 38% decrease in the cost of IT infrastructure itself, a 57% reduction in the time to deploy Nutanix versus equivalent alternative infrastructures, and a 58% decrease in the time required for IT infrastructure management for equivalent workloads.
In another customer’s words:
“We were running SAN-based architecture environment and we’ve reduced the number of FTEs that have to focus on management with Nutanix. Also, Nutanix Enterprise Cloud has allowed us to be very flexible in increasing capacity, if needed, by adding another node and additional storage.”
While infrastructure cost reductions are one side of the equation for enabling cloud-like efficiencies, the other is enhancing business productivity. As an example, IDC said that, “Nutanix enables developers by reducing or nearly eliminating friction associated with IT infrastructure affecting their work. [On average], developers working on the Nutanix Enterprise Cloud are 19% more productive.”
IDC also said that Nutanix customers, “…can better meet demand from employees and customers for timely, relevant, and high-performing business applications and services.” Some study participant examples IDC cited include:
- Faster onboarding of new branches/partners to generate business
- Much improved customer satisfaction
- Ability to focus on business generates more revenue
- Faster to stand up environments means quicker to cash
The Department of No - no longer
Essentially, Nutanix enables customers to transform IT from the “Department of No” into a partner of the business enabling it to thrive in a digitally transformed world. In a Nutanix customer’s words quoted in the paper:
“In the past, the business was not as agile as it is now with Nutanix because we can react much faster. So if our business wants to implement something, we can say: yes, no problem, we can do that.”
A big part of the Nutanix Enterprise Cloud success is its ability to minimize risk and enhance availability. The IDC White Paper notes a decrease in both operational risk as well as in unplanned downtime.
IDC found in their interviews that surveyed customers additionally saw value from enhanced security management, saying: “Customers benefit with Nutanix Enterprise Cloud from having a single, robust infrastructure platform with strong automation capabilities to make their security efforts more efficient, which IDC puts at 28% on average.”
Customer Journey from HCI to Hybrid Cloud
Beyond the agility and efficiency documented in the report, there are additional areas where customers see value from a Nutanix deployment. We’ve been steadily building out our Enterprise Cloud platform with additional capabilities that capitalize on the unique capabilities of our software-defined HCI. As just one example, Nutanix Era dramatically simplifies and automates managing databases. It leverages the HCI platform to enable zero-byte overhead snapshots and clones that don't require duplicating the actual data. This makes the clones and snaps super-fast, and they don't use any more actual storage capacity until new data is written or overwritten.
While IDC calls out many of Nutanix’s Enterprise Cloud offerings from AHV to Calm to Flow to Era, it doesn’t specifically quantify the additional potential business benefits from utilizing these capabilities. These can potentially provide significant savings on top of the fundamental Nutanix OS, although IDC’s study does not validate this. As an example, we recently worked with a customer who could use Era to enable a single DBA to meet the company’s database requests, resulting in 5-year TCO savings of $2.6M.
Calculating Your Savings from Deploying Nutanix
The IDC study shows that the average total annual benefits from deploying Nutanix come to $13.44 million per organization (note that they also provide “per 100 users” data so you can tailor the information to your organization size if you don’t align to the average.) These benefits result from four primary areas:
IT Infrastructure Cost Reductions and Avoidances: $381K from maintenance, power, facilities, licensing, and disaster recovery ($1,335 per 100 users). Here’s another surveyed customer’s quote about the savings they saw deploying Nutanix:
"Nutanix helped us reduce costs of operating and with the savings we duplicated our environment, basically paying for a second datacenter."
IT Staff Productivity Benefits: $2.3M from reducing by, on average, 58% of the IT staff time to deploy, manage, and support their legacy infrastructures, and increasing the productivity of developers ($8,057 per 100 users).
Risk mitigation/User Productivity: $2.9M in increased user productivity and reduced revenue losses from fewer unplanned outages and faster resolution ($10,244 per 100 users).
Business Productivity Benefits: $7.8M from enhanced agility, scalability and performance along with improved business results and higher user productivity ($27,395 per 100 users).
You can use this info to get a feel for how you might see value from a move to Nutanix. Also, check back in March on www.nutanix.com/tco as we will have a customizable calculator using this data that will provide your unique savings. As always, we’re here to answer your questions and help you on your journey across private and hybrid clouds. Don’t forget you can test drive Nutanix software anytime here to get a feel for the exceptional experience and value you might realize. We hope this paper helps you to make a difference within your own organization and transform IT to drive more and more value like this customer quoted in the paper:
"We're repurposing staff with Nutanix to get closer to the business. In the past, our IT team was often just order takers. Now, we are more engaged with the business."
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