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Copy file name to clipboardExpand all lines: articles/migrate/concepts-business-case-calculation.md
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@@ -38,8 +38,9 @@ There are three types of migration strategies that you can choose while building
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--- | --- | ---
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**Azure recommended to minimize cost** | You can get the most cost efficient and compatible target recommendation in Azure across Azure IaaS and Azure PaaS targets. | For SQL Servers, sizing and cost comes from the *Recommended report* with optimization strategy - minimize cost from Azure SQL assessment.<br/><br/> For web apps, sizing and cost comes from Azure App Service assessment is picked. <br/><br/>For general servers, sizing and cost comes from Azure VM assessment.
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**Migrate to all IaaS (Infrastructure as a Service)** | You can get a quick lift and shift recommendation to Azure IaaS. | For SQL Servers, sizing and cost comes from the *Instance to SQL Server on Azure VM* report. <br/><br/>For general servers and servers hosting web apps, sizing and cost comes from Azure VM assessment.
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**Modernize to PaaS (Platform as a Service)** | You can get a PaaS preferred recommendation that means, the logic identifies workloads best fit for PaaS targets. <br/><br/>General servers are recommended with a quick lift and shift recommendation to Azure IaaS. | <br/><br/> For SQL Servers, sizing and cost comes from the *Recommended report* with optimization strategy - *Modernize to PaaS* from Azure SQL assessment.
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<br/><br/>For web apps, sizing and cost comes from Azure App Service assessment. For general servers, sizing and cost comes from Azure VM assessment. Although the Business case picks Azure recommendations from certain assessments, you won't be able to access the assessments directly. To deep dive into sizing, readiness, and Azure cost estimates, you can create respective assessments for the servers or workloads.
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**Modernize to PaaS (Platform as a Service)** | You can get a PaaS preferred recommendation that means, the logic identifies workloads best fit for PaaS targets. <br/><br/>General servers are recommended with a quick lift and shift recommendation to Azure IaaS. | <br/><br/> For SQL Servers, sizing and cost comes from the *Recommended report* with optimization strategy - *Modernize to PaaS* from Azure SQL assessment.<br/><br/> For web apps, sizing and cost comes from Azure App Service assessment. For general servers, sizing and cost comes from Azure VM assessment.
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Although the Business case picks Azure recommendations from certain assessments, you won't be able to access the assessments directly. To deep dive into sizing, readiness, and Azure cost estimates, you can create respective assessments for the servers or workloads.
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## How do I build a business case?
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After the appliance begins server discovery, you can start building your Business case. Follow our tutorials for [VMware](./tutorial-discover-vmware.md) or [Hyper-V](tutorial-discover-hyper-v.md) or [Physical/Bare-metal or other clouds](tutorial-discover-physical.md) to try out these steps.
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We recommend that you wait at least a day after starting discovery before you build a Business case so that enough performance/resource utilization data points are collected. Also, review the notifications/resolve issues blades on Azure Migrate hub to identify any discovery related issues prior to Business case computation. It will ensure that the IT estate in your datacenter is represented more accurately and the Business case recommendations will be more valuable.
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We recommend that you wait at least a day after starting discovery before you build a Business case so that enough performance/resource utilization data points are collected. Also, review the notifications/resolve issues blades on Azure Migrate hub to identify any discovery related issues prior to Business case computation. It ensures that the IT estate in your datacenter is represented more accurately and the Business case recommendations are more valuable.
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## What data does the appliance collect?
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-**Idle servers**: These servers were on but didn't deliver business value by having their CPU and memory utilization below 5% and network utilization below 2%.
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-**Decommission**: These servers were expected to deliver business value, but didn't and can be decommissioned on-premises and recommended to not migrate to Azure:
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-**Zombie**: The CPU, memory and network utilization were 0% with no performance data collection issues.
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- These servers were on but do not have adequate metrics available:
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- These servers were on but don't have adequate metrics available:
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-**Unknown**: Many servers can land in this section if the discovery is still ongoing or has some unaddressed discovery issues.
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## What comprises a business case?
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| Compute | Hardware | Server Hardware (Host machines) | Total hardware acquisition cost is calculated using a cost per core linear regression formula: Cost per core = 16.232*(Hyperthreaded core: memory in GB ratio) + 113.87. Hyperthreaded cores = 2*(cores)
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| Compute | Hardware | Server Hardware (Host machines) | Total hardware acquisition cost is calculated using a cost per core linear regression formula: Cost per core = 16.232*(Hyperthreaded core: memory in GB ratio) + 113.87. Hyperthreaded cores = 2*(cores)
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|| Software - SQL Server licensing | License cost | Calculated per two core pack license pricing of 2019 Enterprise or Standard. |
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||| Software Assurance | Calculated per year as in settings. |
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|| Software - Windows Server licensing | License cost | Calculated per two corepack license pricing of Windows Server. |
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|| Software - Windows Server licensing | License cost | Calculated per two core pack license pricing of Windows Server. |
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||| Software Assurance | Calculated per year as in settings. |
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|| Virtualization software for servers running in VMware environemnt| Virtualization Software (VMware license cost + support + management software cost) | License cost for vSphere Standard license + Production support for vSphere Standard license + Management software cost for VSphere Standard + production support cost of management software. _Not included- other hypervisor software cost_ or _Antivirus / Monitoring Agents_.|
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|| Virtualization software for servers running in Microsoft Hyper-V environemnt| Virtualization Software (management software cost + software assurance) | Management software cost for System Center + software assurance. _Not included- other hypervisor software cost_ or _Antivirus / Monitoring Agents_.|
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|| Virtualization software for servers running in VMware environment| Virtualization Software (VMware license cost + support + management software cost) | License cost for vSphere Standard license + Production support for vSphere Standard license + Management software cost for VSphere Standard + production support cost of management software. _Not included- other hypervisor software cost_ or _Antivirus / Monitoring Agents_.|
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|| Virtualization software for servers running in Microsoft Hyper-V environment| Virtualization Software (management software cost + software assurance) | Management software cost for System Center + software assurance. _Not included- other hypervisor software cost_ or _Antivirus / Monitoring Agents_.|
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| Storage | Storage Hardware || The total storage hardware acquisition cost is calculated by multiplying the Total volume of storage attached to per GB cost. Default is USD 2 per GB per month. |
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|| Storage Maintenance || Default is 10% of storage hardware acquisition cost. |
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| Network | Network Hardware and software | Network equipment (Cabinets, switches, routers, load balancers etc.) and software | As an industry standard and used by sellers in Business cases, it's a % of compute and storage cost. Default is 10% of storage and compute cost. |
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|| Maintenance | Maintenance | Defaulted to 15% of network hardware and software cost. |
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| Facilities | Facilities & Infrastructure | DC Facilities – Lease and Power | Facilities cost has not been added by default in the on-premises cost calculations. Any lease/colocation/power cost specified here will be included as part of the Business case. |
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| Facilities | Facilities & Infrastructure | DC Facilities – Lease and Power | Facilities cost hasn't been added by default in the on-premises cost calculations. Any lease/colocation/power cost specified here will be included as part of the Business case. |
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| Labor | Labor | IT admin | DC admin cost = ((Number of virtual machines) / (Avg. # of virtual machines that can be managed by a full-time administrator)) * 730 * 12 |
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#### Azure cost
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|| Storage (PaaS) | N/A | N/A |
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| Network | Network Hardware and software | Network equipment (Cabinets, switches, routers, load balancers etc.) and software | As an industry standard and used by sellers in Business cases, it's a % of compute and storage cost. Default is 10% of storage and compute cost. |
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|| Maintenance | Maintenance | Defaulted to 15% of network hardware and software cost. |
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| Facilities | Facilities & Infrastructure | DC Facilities - Lease and Power | Facilities cost is not applicable for Azure cost. |
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| Facilities | Facilities & Infrastructure | DC Facilities - Lease and Power | Facilities cost isn't applicable for Azure cost. |
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| Labor | Labor | IT admin | DC admin cost = ((Number of virtual machines) / (Avg. # of virtual machines that can be managed by a full-time administrator)) * 730 * 12 |
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### Year on Year costs
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| Server Depreciation | (Total server hardware acquisition cost)/(Depreciable life) | Depreciable life = 4 years ||
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| Storage Depreciation | (Total storage hardware acquisition cost)/(Depreciable life) | Depreciable life = 4 years ||
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| Fit out and Networking Equipment | (Total network hardware acquisition cost)/(Depreciable life) | Depreciable life = 5 years ||
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| License Amortization | (virtualization cost + Windows Server + SQL Server + Linux OS)/(Depreciable life) | Depreciable life = 5 years | VMware licenses won't be retained; Windows, SQL and Hyper-V management software licenses will be retained based on AHUB option in Azure).|
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| License Amortization | (virtualization cost + Windows Server + SQL Server + Linux OS)/(Depreciable life) | Depreciable life = 5 years | VMware licenses are not retained; Windows, SQL and Hyper-V management software licenses are retained based on AHUB option in Azure).|
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|**Operating Asset Expense (OPEX) (B)**||||
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| Network maintenance | Per year |||
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| Storage maintenance | Per year | Power draw per Server, Average price per KW per month based on location. ||
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| License Support | License support cost for virtualization + Windows Server + SQL Server + Linux OS || VMware licenses won't be retained; Windows, SQL and Hyper-V management software licenses will be retained based on AHUB option in Azure). |
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| License Support | License support cost for virtualization + Windows Server + SQL Server + Linux OS || VMware licenses are not retained; Windows, SQL and Hyper-V management software licenses are retained based on AHUB option in Azure). |
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| Datacenter Admin cost | Number of people * hourly cost * 730 hours | Cost per hour based on location. ||
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#### Future state (on-premises + Azure)
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You can override the above values in the assumptions section of the Business case.
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In Azure, there is no CAPEX, the yearly Azure cost is an OPEX
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In Azure, there's no CAPEX, the yearly Azure cost is an OPEX
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This article describes how to build a Business case for on-premises servers and workloads in your datacenter with Azure Migrate: Discovery and assessment tool.
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[Azure Migrate](migrate-services-overview.md) helps you to plan and execute migration and modernization projects to Azure. Azure Migrate provides a centralized hub to track discovery, assessment, and migration of on-premises infrastructure, applications, and data to Azure. The hub provides Azure tools for assessment and migration, as well as third-party independent software vendor (ISV) offerings.
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[Azure Migrate](migrate-services-overview.md) helps you to plan and execute migration and modernization projects to Azure. Azure Migrate provides a centralized hub to track discovery, assessment, and migration of on-premises infrastructure, applications, and data to Azure. The hub provides Azure tools for assessment and migration, and third-party independent software vendor (ISV) offerings.
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## Prerequisites
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:::image type="content" source="./media/how-to-build-a-business-case/build-inline.png" alt-text="Screenshot of the Build Business case button." lightbox="./media/how-to-build-a-business-case/build-expanded.png":::
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We recommend that you wait at least a day after starting discovery before you build a Business case so that enough performance/resource utilization data points are collected. Also, review the **Notifications**/**Resolve issues** blades on the Azure Migrate hub to identify any discovery related issues prior to Business case computation. It will ensure that the IT estate in your datacenter is represented more accurately and the Business case recommendations will be more valuable.
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We recommend that you wait at least a day after starting discovery before you build a Business case so that enough performance/resource utilization data points are collected. Also, review the **Notifications**/**Resolve issues** blades on the Azure Migrate hub to identify any discovery related issues prior to Business case computation. It ensures that the IT estate in your datacenter is represented more accurately and the Business case recommendations are more valuable.
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1. In **Business case name**, specify a name for the Business case. Make sure the Business case name is unique within a project, else the previous Business case with the same name will get recomputed.
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1. In **Business case name**, specify a name for the Business case. Make sure the Business case name is unique within a project, else the previous Business case with the same name gets recomputed.
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1. In **Target location**, specify the Azure region to which you want to migrate.
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- With the default *Azure recommended approach to minimize cost*, you can get the most cost-efficient and compatible target recommendation in Azure across Azure IaaS and Azure PaaS targets.
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- With *Migrate to all IaaS (Infrastructure as a Service)*, you can get a quick lift and shift recommendation to Azure IaaS.
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- With *Modernize to PaaS (Platform as a Service)*, you can get cost effective recommendations for Azure IaaS and more PaaS preferred targets in Azure PaaS.
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1. In **Savings options**, specify the savings options combination that you want to be considered while optimizing your Azure costs and maximize savings. Based on the availability of the savings option in the chosen region and the targets, the business case will recommend the appropriate savings options to maximize your savings on Azure.
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- Choose 'Reserved Instance', if your datacenter comprises of most consistently running resources.
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1. In **Savings options**, specify the savings options combination that you want to be considered while optimizing your Azure costs and maximize savings. Based on the availability of the savings option in the chosen region and the targets, the business case recommends the appropriate savings options to maximize your savings on Azure.
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- Choose 'Reserved Instance', if your datacenter comprises most consistently running resources.
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- Choose 'Reserved Instance + Azure Savings Plan', if you want additional flexibility and automated cost optimization for workloads applicable for Azure Savings Plan (Compute targets including Azure VM and Azure App Service).
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1. In **Discount (%) on Pay as you go**, add any subscription-specific discounts you receive on top of the Azure offer. The default setting is 0%. Note that the discount isn't applicable on top of reserved instance savings option.
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1. In **Discount (%) on Pay as you go**, add any subscription-specific discounts you receive on top of the Azure offer. The default setting is 0%. The discount isn't applicable on top of reserved instance savings option.
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1.**Currency** is defaulted to USD and can't be edited.
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1. Review the chosen inputs, and select **Build business case**.
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:::image type="content" source="./media/how-to-build-a-business-case/build-button.png" alt-text="Screenshot of the button to initiate the Business case creation.":::
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1. You'll be directed to the newly created Business case with a banner that says that your Business case is computing. The computation might take some time, depending on the number of servers and workloads in the project. You can come back to the Business case page after ~30 minutes and select **Refresh**.
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1. You are directed to the newly created Business case with a banner that says that your Business case is computing. The computation might take some time, depending on the number of servers and workloads in the project. You can come back to the Business case page after ~30 minutes and select **Refresh**.
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:::image type="content" source="./media/how-to-build-a-business-case/refresh-inline.png" alt-text="Screenshot of the refresh button to refresh the Business case." lightbox="./media/how-to-build-a-business-case/refresh-expanded.png":::
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It covers the cost of running all the servers scoped in the business case using some of the industry benchmarks. It doesn't cover Facilities (lease/colocation/power) cost by default, but you can edit it in the on-premises cost assumptions section. It includes one time cost for some of the capital expenditures like hardware acquisition etc., and annual cost for other components that you might pay as operating expenses like maintenance etc.
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### Estimated Azure cost
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It covers the cost of all servers and workloads that have been identified as ready for migration/modernization as per the recommendation. Refer the respective *Azure IaaS* and *Azure PaaS* report for details. The Azure cost is calculated based on the right sized Azure configuration, ideal migration target and most suitable pricing offers for your workloads. You can override the migration strategy, target location or other settings in the 'Azure cost' assumptions to see how your savings could change by migrating to Azure.
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It covers the cost of all servers and workloads that have been identified as ready for migration/modernization as per the recommendation. Refer to the respective *Azure IaaS* and *Azure PaaS* report for details. The Azure cost is calculated based on the right sized Azure configuration, ideal migration target and most suitable pricing offers for your workloads. You can override the migration strategy, target location or other settings in the 'Azure cost' assumptions to see how your savings could change by migrating to Azure.
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### YoY estimated current vs future state cost
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As you plan to migrate to Azure in phases, this line chart shows your cashflow per year based on the estimated migration completed that year. By default, it's assumed that you'll migrate 0% in the current year, 20% in Year 1, 50% in Year 2, and 100% in Year 3.
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