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What to Know When Estimating Virtualized Environment Costs

Management Track



Virtualization, which allows a single piece of hardware to function as multiple “virtual” pieces of hardware, is one of the principal trends for current IT systems. As the technology has matured over the last several years, various organizations in both the public and private sectors have made the transition to operating in a virtual environment in an effort to reduce costs and streamline data access. With server, storage, and network virtualization becoming more prevalent, cost analysts are frequently asked to estimate and assess the costs associated with virtualization.

This follow-on research to the 2009 and 2010 SCEA papers entitled “Cost Impacts of Server Virtualization” and “Server Virtualization and Government Organizations” will provide lessons learned and questions cost estimators should ask when evaluating virtualization cost impacts. A significant segment of the commercial industry has already embraced virtualization, offering a plethora of success stories about dramatic reductions in the cost of operations. However, as the 2009 and 2010 research illustrated, there are several factors which can impact cost savings due to virtualization, especially for government agencies. Factors such as program size, security and mission-critical application concerns, availability of compatible commercial-off-the-shelf (COTS) software, power, space and cooling availability, and program complexity can affect the total cost savings experienced by organizations in the process of virtualizing.

Previous research has focused on the virtualization process for various programs and organizations to determine the magnitude of cost savings that can realistically be expected and establish overarching principles and factors that can be used to assess a program’s future savings due to virtualization. In contrast, this paper focuses on lessons learned and the data collection stage of the estimation process. Through multiple estimates of IT systems that are virtualized or are in the process of virtualizing, as well as continued conversations with industry leaders, it has become apparent that some pieces of information are critical to constructing a sound cost estimate. Because virtualization will impact each organization differently due to unique characteristics and requirements, this paper aims to guide cost estimators through the virtualization estimation process. By understanding important questions to ask and how to best utilize provided information, cost analysts will be better able to assess the hardware, software, facility, and personnel implications of virtualization.


Jennifer Woolley
Scitor Corporation
Jennifer G. Woolley graduated from William and Mary in May of 2006 with a B.A. in Economics and Psychology. In July of 2006, Jennifer began working for Northrop Grumman as an operations researcher performing cost analysis for the Intelligence Community. She led analysts creating life cycle cost estimates and Intelligence Capability Baseline Descriptions (ICBD) for the development and maintenance of multiple programs. Ms. Woolley also worked on a team conducting Independent Cost Proposal Evaluations throughout Northrop Grumman. In July of 2009, Jennifer joined Scitor, where she has supported multiple customers throughout the Intelligence Community and Department of Defense. She currently develops program cost estimates for various agencies as part of the budgetary process and is pursuing a Master’s of Science in Management and Information Technology from the University of Virginia.

Ryan W. Boulais
Scitor Corporation
Mr. Boulais began his career in 1998 as a Military Intelligence officer with assignments in Bamberg and Wurzburg, Germany, Fort Monroe, VA, and a deployment to Kosovo. In 2003, he accepted a position with Northrop Grumman TASC as a cost analyst supporting customers at the NGA, MDA, Navy, and internal corporate customers. In 2004 he was promoted to Section Manager. In 2006, Mr. Boulais was recalled from the Army’s individual ready reserve (IRR), re-designated as a Civil Affairs officer and deployed to Baghdad, Iraq for a year where he served as the Economic Team Leader for the Baghdad Provincial Reconstruction Team (PRT) and the Executive Officer to the US Ambassador in charge of reconstruction for Iraq. Upon his return, he resumed his career at TASC as a Section Manager with customers at the NGA, NRO, and JFCOM.

In January 2009, Mr. Boulais joined Scitor Corporation. He has supported various customers within the NRO including leading a business process re-engineering (BPR) effort in the FM environment and developing a risk-adjusted independent cost estimate for a source selection effort. In his current role, Mr. Boulais is the contractor research lead at the ODNI Cost Analysis Improvement Group.

Mr. Boulais received a B.S. in Operations Research from the United States Military Academy at West Point in 1998 and an M.A. in Systems and Information Engineering from the University of Virginia in 2004.

Sandra J. Williams
Scitor Corporation
Ms. Williams joined Scitor Corporation in December 2008 as a Consultant, providing cost estimating and financial management support to both Intelligence Community (IC) and Department of Defense (DoD) customers. She currently supports the Office of the Director of National Intelligence (ODNI) Systems Resource & Analyses (SRA) Cost Analysis (CA) Division, formerly known as the ODNI Cost Analysis & Improvement Group (CAIG). Prior to Scitor, Ms. Williams worked for Northrop Grumman – TASC from May 2005 to November 2008. In her role as a Department Manager from March 2006 to November 2008, Ms. Williams and her various teams provided support for the ODNI CAIG, the CFO Resource Management Office (RMO), the USG, NGA and its associated Directorates (Acquisition, New Campus East, Engineering/O&S), NSA, DIA, the Navy Engineering Logistics Office (NELO), the NRO, and other internal Northrop Grumman customers. Ms. Williams worked for BearingPoint (formerly known as KPMG Consulting) as a Manager from June 2001 to April 2005 providing cost estimating and financial support to the NRO, the USG, NAVSEA, NAVAIR, and the Royal Australian Navy. From May 1994 to May 2001, Ms. Williams provided acquisition support to the Joint Strike Fighter Program Office -specifically the Technology Maturation/Systems Engineering and Supportability Directorates. From March 1991 to April 1994, Ms. Williams provided cost estimating support to NAVSEA – PMS 415. Ms. Williams received her Masters of Business Administration from The Pamplin College of Business in 2000. She received her Bachelors of Science in Business Administration from Mary Washington College in 1989. Ms. Williams is married with three children.