1. VMware Virtualization: The Right, Most Strategic Investment VMware March 2009

2. Agenda Economic Environment in 2009 Why VMware is a Strategic Investment Proven Customer Success

3. The Rough Road Ahead…. Source: Goldman Sachs IT Spending Survey, March 9th, 2009 Source: IMF World Economic Outlook Report, Nov 6 th 2008 Our IT spending indices dipped further to new lows in our latest survey, deep in contraction territory. - Goldman Sachs A global economic recession is forecasted for 2009 The economic environment is a leading indicator of tech spending 71% of CIOs anticipate flat or decreasing IT spending budgets IT budgets in developed countries set to decline by 12% in 2009 and 9% globally

4. The IT Dilemma I am supposed to do the same job, but with less budget and headcount?!?

5. Agenda Economic Environment in 2009 Why VMware is a Strategic Investment Proven Customer Success

6. Recent CIO Surveys Agree: Virtualization is the Top CIO Priority in a Tough Economic Environment Source: Merrill Lynch CIO Survey, Oct 28 th, 2008 Source: Goldman Sachs IT Spending Survey, Nov 2nd, 2008 The current environment has moved virtualization toward the top of the priority list for CIOs. Total cost of ownership (TCO) reductions will be a key driver of the acceleration in server virtualization deployments as CIOs are forced to cut capital spending and reign in management, administrative and power/ cooling costs.

7. Customers Are Still Moving Ahead with Virtualization in 2009 CIOs expect to double the percentage of servers virtualized in 2009 Source: Goldman Sachs IT Spending Survey, Nov 2 nd, 2008

8. Which software providers are gaining share of your IT spending dollars? 1 13 Quarters # Source: Goldman Sachs IT Spending Survey, March 9th, 2009 VMware Continues to be the #1 Software Investment for CIOs in a Tough Economy Gaining 1.VMware 2.Citrix Systems 3.Cisco Software/ Security 4.Oracle 5.Symantec VMware

9. Source: Goldman Sachs IT Spending Survey, Nov 2 nd, 2008 VMwares incumbent position at the top of the rankings demonstrates that server virtualization momentum remains alive and well with a strong ROI case for a declining budget environment. - Goldman Sachs Which software providers are gaining share of your IT spending dollars? VMware is the Proven, Trusted Leader Providing the Highest ROI and Lowest TCO

10. Top 3 Reasons Why VMware is the Right IT Investment in a Tough Economic Environment Minimize Lost Revenue Due to Downtime 3 Reduce Datacenter Operating Cost (e.g. Power & Cooling) 2 Reduce Physical Infrastructure Cost 1

11. Business Loss Due to Datacenter Outage** Sys Admin per 100 Apps* * Source: IDC and VMware TAM program ** Source: VMware customer – a $2bn insurance company. Estimates based on 40 hrs needed to recover before virtualizing and 4.5 hrs needed for the same recovery after virtualization. Infrastructure Cost per App Reduction in Datacenter Capital Expense 2.0-3.0 $14,235 $5,694 0.3 – 1.0 Reduction in Datacenter Operating Expense $30 MM $4 MM Reduction in Risk VMware Delivers Tangible Business Outcomes

12. 12 Reduce Server Spend Through Consolidation VMware… Decouples software from hardware Encapsulates Operating Systems and applications into Virtual Machines A Server or Desktop Virtual Machine Typical Consolidation: 15:1 Typical Excess Hardware Capacity: 3 Years!

13. Total Savings Per Workload Servers100080$5,816 Network Switches 8410$296 Real Estate (Sq ft) 2053257$431 Power (kWh) 40752$759 Cooling (kWh) 50964$949 Savings per Workload (Over 3 years) $8,251* BEFOREAFTERSAVINGS Actual customer savings per application; represents typical savings Includes estimated cost of VMware licenses, Support and Subscription VMware consolidates servers, storage and networking infrastructure to safely achieve higher utilization Reducing Capital Cost 1 Reducing Operating Cost 2

14. Copyright © 2005 VMware, Inc. All rights reserved. Reduce Energy Consumption Copyright © 2005 VMware, Inc. All rights reserved. Highest consolidation rates on most secure and reliable virtualization platform Safely improve utilization rates 80% energy reduction Dynamic server and storage migration Power off unneeded servers in real-time Migrate storage dynamically 25% energy reduction Host desktop PCs in the datacenter Use thin clients, double refresh cycle Reduce storage for similar desktop images 70% energy reduction

15. Improving Operational Efficiency Source: IDC and VMware TAM program Do more work with the same number of people = operating cost savings Free up resources and budgets from day- to-day maintenance to focus on future innovation and strategic projects Drivers of productivity improvements: Instant provisioning Dynamic patching Zero downtime maintenance Reducing Operating Cost 2

16. Value of Zero Downtime Server Maintenance Server Maintenance is required for Updates to component hardware Updates / patches to the hypervisor Migration to newer servers Cost savings from zero downtime server maintenance with VMotion Avoid overtime cost to perform maintenance Avoid administrative time in scheduling downtime Business costs of downtime is specific to each industry and not included here For a 10 physical server, 150 VM environment, assuming: 2 hardware/ BIOS upgrades per server + 4 hypervisor patches = 6 maintenance activities per server per year 10 X 6 X + X $150/hr 2 hrs Overtime Cost Time to perform upgrade Overtime $/hr 0.75 hr 15 Scheduling Downtime # of apps per server Time spent scheduling downtime per app $60/hr $/hr X X = $ 58,500 VMware VMotion # of servers # of updates ( )

17. Value of Zero Downtime Storage Moves Maintenance Storage Maintenance is usually required for LUN optimization Upgrades to better hardware Cost savings from zero downtime storage maintenance with Storage VMotion Avoid overtime cost to perform maintenance Avoid administrative time in scheduling downtime and planning the move Avoid cost of buying an alternate data mover tool For a 10 physical server, 150 VM environment (50GB per VM of storage), assuming: Storage is moved once in 3 yrs, annualize 1/3 of the 7.5TB environment every year (2.5TB). ~20GB can be moved an hour. X $150/hr 124 hrs Overtime Cost Time to move 2.5TB each yr Overtime $/hr X $60/hr 248 hrs Scheduling Downtime Time spent scheduling downtime Admin $/hr X $60/hr 500 hrs Planning Move Time spent planning the move Admin $/hr $5000 Alternate Tool Cost + ++ = $ 68,113 VMware Storage VMotion

18. Value of Dynamic Load Balancing Customers report that without DRS automatically balancing their environments, they would either Decrease their consolidation ratio – this means that the full HW cost savings are not realized. Customers report up to 30% decrease in consolidation ratios. Have to manually monitor VMs to place them appropriately. For a 10 physical server, 150 VM environment, assume that the consolidation ratio decreases by 30% from 15:1 to 10. Alternatively, administrators would have to spend time monitoring the cluster or responding to customer calls every day Cost of increased monitoring time Decreased consolidation ratio means OR X $8,000 5 servers Increased Hardware Cost More servers needed Hardware, license, power/ cooling, space costs per server 260 2.5 hrs. Cost of Extra Admin Time Hours per dayDays in a year $60/hr Admin costs/hr X X = $ 40,000 = $ 39,000 OR VMware DRS

19. Offline machine patching Reduces exposure from non-compliant offline/suspended virtual machines Systems have NICs disabled during patching to reduce risk Value of Automated Patching Guest Patching Administrative time – 2448 hrs, $147,744 saved annually Calculated for 150 virtual machines, assuming 40 patches per machine > Scan machines > Assess patch requirements > Remediate systems > Troubleshoot > Rollback – 10% Manual 24 min Automated 15 min Annual Savings for 150 VMs 900 hrs, $54,000 Manual 156 min Automated 21 min Annual Savings for 150 VMs 1548 hrs, $93,744 Manual 180 min Automated 36 min Annual Savings for 150 VMs 2448 hrs, $147,744 Per virtual machine Per patch VMware Update Manager $147,744

20. Ensuring Business Continuity Source: IDC and VMware TAM program Reduce business risk without increasing costs or complexity Minimize lost revenue from and avoid costs of business downtime Drivers of productivity improvements: Built-in high availability Automated recovery Reducing Operating Cost Minimize Lost Revenue 3

21. Value of Automated Site Recovery SRM cost savings can have several contributions: Cost of lower disaster recovery site investment Cost of lower recovery plan planning and management time Cost of less lost business revenue Cost of less lost wages The below only captures a conservative estimate of savings from lost business revenue and lost productive time Company that does $5M in revenue a year = ~$20k / weekday. Assume a disaster strikes. Assume that SRM can achieve RTO of 24 hours instead of 72 hours compared to traditional DR plan. = $ 64,000 (Per disaster) X $20,000 Value of Lost Revenue Days of faster recovery Lost revenue per day X + X 40 Value of Lost Time by Workers Days of faster recovery Number of workers X X $300/dy Cost of worker wages 2 2 VMware SRM

22. Value of High Availability High Availability cost savings can have several contributions: Cost of lost business, lost work Cost of lost productive time The sheer simplicity of VMware HA and reduced time & effort compared to other clustering solutions is not captured The below only captures a conservative estimate of savings from lost productive time For a 10 physical server, 150 VM environment, assuming 2 failures a year: X 10 4 hrs. Value of Reduced Lost Productive Time Hours of downtime Number of users per VM 15 Number of VMs per host X X $50/hr Cost of User productive time X 2 X = $ 60,000 VMware HA Failures per year in 10- host cluster

23. Value of Fault Tolerance Fault Tolerance (FT) cost savings is primarily in preventing lost business revenue from when mission-critical, high-revenue applications go down Fault Tolerance prevents lost business revenue by providing zero downtime, zero data loss continuous availability for your applications The simplicity of FT and reduced time & effort compared to other hardware-based solutions is not captured For a 10 physical server, 150 VM environment, assume ~10% of VMs are protected by FT (15 VMs). 2 host failures in the cluster per year. Lost revenue per minute of high-revenue apps can range from $2000-15000 per minute depending on type of transactions being processed. X $7000/min 4 Value of Lost Revenue Minutes of downtime prevented Lost revenue per minute 15÷10 Avg. number of FT-protected VMs per host X X X = $ 69,000 2 Failures per year in 10- host cluster X 1 $15000 Extra Hosts for FT Cost per host Number of extra hosts - VMware FT

24. Agenda Economic Environment in 2009 Why VMware is a Strategic Investment Proven Customer Success

25. 25 Meet Service Levels Efficiently Using VMware virtual infrastructure, we can offer the same levels of service and more flexibility for up to 40 percent lower server and operating costs. Rob Jones, Director of Technology, ALSTOM Reduce Costs Using VMware software has brought a huge cost benefit to IT - avoiding costs by $1.1 million is fantastic. For every production virtual machine, we estimate a $7,500 cost avoidance per server. We multiply 150 applications by $7,500 and estimate a $1.1 million cost avoidance. Barry Naber, Technology Manager at International Truck and Engine Corporation Customer Testimonials Simplify Management The net impact of utility computing with VMware Infrastructure 3 for the business is higher service levels, for IT - it is simplified and easier to manage infrastructure. Fazil Habibulla, Vice President and System Architect, NATIXIS Capital Markets

26. VMware is Lowest TCO Per VM VMware VI3 Foundation VMware VI3 Enterprise Other Solutions 2-way server (16GB RAM) $7,000 Cost: Guest Windows licenses 1 $5,998 Cost: Virtualization license $995$5,750$0 Subtotal $13,993$18,748$12,998 Total VMs 2 (2GB each) 15* 7 Cost per VM $933$1,250 $1,857 1 List price for 2-socket Windows 2003 Server Datacenter Edition 2 Assumes a 2:1 memory overcommit ratio based on VMware advanced memory mgmt technologies * Assumes 1GB of memory used by host virtualization SW for all vendors VI3 Enterprise includes advanced functionality such as live server and storage migration, dynamic workload balancing, built in high availability, data protection, and power management which competitors dont have. VMwares cost-per-VM beats even free products… plus …

27. Available Resources Online ROI/ TCO Calculator: Robust and customizable analysis of virtualizations impact on your IT budget and datacenter costs www.vmware.com/calculator Why Choose VMware: Vendor selection checklist to ensure a Complete, Robust, Proven Virtual Infrastructure www.vmware.com/technology/why vmware/

28. Thank You!