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Server Virtualization Technology Update

Quick Reference Guide

The following content may no longer reflect Microsoft’s current position or infrastructure. This content should be viewed as reference documentation only, to inform IT business decisions within your own company or organization.


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Saves Millions by Using Hyper-V to Reduce Space and Power Consumption

Executive Overview

Situation: In 2004, the typical Microsoft IT (MSIT) production server’s CPU usage averaged less than 10% each day. If trends continued, the percentage would have dropped to 3% within a few years. MSIT determined that through virtualization and consolidation, IT could reduce costs associated with initial hardware expenditures, ongoing hosting charges, and datacenter growth.

Why You Should Care:

  1. MSIT adopted Hyper-V because it offered a clear business value in terms of cost savings and flexibility. These benefits drove MSIT toward machine virtualization in 2004.

  2. Hyper-V is designed to service machine virtualization needs for server consolidation and virtual desktop infrastructures. Hyper-V allows multiple virtual machines (VMs) to run concurrently on the same physical server. Each VM has its own representation of hardware, an isolated OS and application environment, and a unique network and security identity.

  3. Virtualization is an important part of MSIT’s strategy to standardize platforms, optimize IT, and create an automated dynamic environment.

  4. Microsoft IT actively contributes to the quality and capabilities of Microsoft products. In the case of Hyper-V and Virtual Machine Manager, any production issues with a root cause in the product and any capability needs identified by customers or by MSIT staff is reported directly to the product development team.

History of Server Virtualization at MSIT

  • The drive to virtualization began as a means to reduce costs by increasing the effective utilization of infrastructure resources. Using System Center Operations Manager, Microsoft IT measured server CPU usage in 15-minute increments for several years.

  • The first deployment was on Virtual Server 2005, the predecessor to Hyper-V. Investigation of server workloads determined that up to 70% average CPU utilization was possible without an adverse service impact. MSIT determined that 50% server utilization would be very conservative.

Current State of Server Virtualization in MSIT

  • As of September 2011, VMs make up more than 50% of Microsoft IT’s total Windows Server population. About 2500 physical servers of differing configurations currently host approximately 16,000 VMs.

  • MSIT is targeting 60% virtualization in FY12. Approximately 70% of all new server requests are fulfilled as VMs, though this percentage continues to increase as the capabilities of the Microsoft virtualization software and underlying hardware platforms improve.

  • The highest VM concentrations are in enterprise datacenters.

  • In the field, MSIT deploys “Virtual Branch Office Server.”

  • The onboarding process steers appropriate candidates into VMs for all new growth and hardware refresh/migration asks.

  • Hyper-V improvements, System Center tools that enable management at scale, and new hardware continue to increase virtualization reach and quality of service.


  • The goal of the VM hosting service in MSIT is to equal or better the service level and value of traditional commodity physical servers.

  • The preferred infrastructure platform is the MSIT “Scale Unit” which specifies a unified compute, network, and storage configuration, and a consistent framework for external resources, such as logical networks.

  • Hyper-V R2 deployments on the Scale Unit utilize
    16-node clusters to minimize sunk capacity and maximize flexibility.

  • Non-datacenter deployments can still use standard rack-mounted servers or a smaller capacity blade design.

  • All server consolidation hosts run Windows Server 2008 Enterprise Server Core. Windows Server 2008 R2 SP1 is the current standard.

  • All Virtual Desktop Infrastructure (VDI) hosts run
    Hyper-V Server R2 SP1.

  • Virtual machine configurations and resource allocations are very similar to those of the same workload on a physical machine.

  • MSIT strongly advocates the use of Windows Server 2008 R1 or greater as the guest OS to provide optimal performance.


  • All virtualization hosts are managed centrally by a full complement of tools that are appropriate for the environment and platform:

    • System Center Configuration Manager, System Center Operations Manager, and System Center Virtual Machine Manager infrastructures are deployed to provide central administration and support functions.

    • Hardware support agents, antivirus, and other tools provide additional capabilities.

    • MSIT strives to utilize remote and centralized management tools whenever possible, including for provisioning and lifecycle management.

  • A centralized deployment team provisions VMs using System Center Virtual Machine Manager.

  • Adoption of Hyper-V is driven by a managed on-boarding process (“RightSizing”), financial incentives, and value-adds that distinguish VMs from physical machines.

  • MSIT discourages “VM sprawl” through cost recovery and auditing.

  • Self-hosting of VMs is prohibited within security environments and facilities designated for MSIT server populations.


  • Hosts are supported by the commodity server administration groups at operational tiers, with service-and technology-specific support at delivery and engineering tiers when required. This allows for economies of scale and “follow-the-sun” administration.

  • Microsoft IT has a global client base and global operations. VMs have been deployed worldwide and require matching support services 24x7. Data Center Operations responds to alerts and remotely manages all server instances, both physical and virtual.

  • Service Operations Compute provides Tier III support, service design, and solution engineering.

  • Datacenter Capacity Management provides capacity planning and customer request review.

  • Windows Services Engineering provides platform design and engineering-level support.


  • MSIT has achieved 99.99% availability for VMs running on Hyper-V (average is 99.95% prior to host clustering and VM migration options) and anticipates that availability will increase for virtual machines running on vNext. The 99.99% calculation includes the monthly IT maintenance window. This availability meets or exceeds the physical server availability outside of VM hosts.

  • The VM hosting charge is 50% of the cost of a comparable physical server.

  • Microsoft IT’s internal customers fully recover the up-front charge for a VM in less than one year.

Best Practices

  • Overcoming Resistance. IT personnel often feel uncertain about virtualization. This is particularly prevalent with application support teams for the more complex or sensitive applications. Having consistent communications, setting the right expectations, and having an appropriate evangelism campaign helps overcome much of this resistance.

  • Hosting Service. MSIT created a VM hosting service to further reduce costs and improve efficiency by centralizing ownership and lifecycle management.

  • Standards. Being able to deploy consistent builds yields consistent and predictable results and enables support teams such as Incident, Change, Monitoring, and Patching to perform best.

  • Stay Current. Make sure Hosts are up-to-date with respect to patches, OS version, and so on.

  • Quality of Service. To encourage adoption, create demand for the service in terms of reliability, flexibility, and manageability—not just financial savings.

  • Manage Capacity. Ensure that there are well-defined processes to deploy and support Data Center, Power, and Network.

MSIT’s Cloud Push And Approach

  • CEO and CIO Commitment: Lead with the Cloud. 85% to 90% of MSIT workloads will be in the cloud by the end of this decade.

  • Traditional IT will be reduced over time as the Private Cloud expands and consolidation/virtualization barriers are eliminated. MSIT is transforming the internal environment to enable a hybrid cloud for enterprise applications that will remain on-premises. The Private Cloud using Hyper-V is the current direction for infrastructure services and applications that must remain internal.

  • Microsoft Azure and other Microsoft cloud offerings are the direction for service and applications that can be adapted for these environments. MSIT is redesigning its line-of-business (LOB) applications for Microsoft Azure, when possible.

  • External cloud migration will increase as public cloud capabilities expand and MSIT applications and services evolve. MSIT is migrating its user and service base to Office 365, Dynamics CRM Online, and other Microsoft cloud SaaS offerings as appropriate.


  • Machine virtualization continues to increase Microsoft IT’s operational efficiency in the server space.

  • Achieving lower operational overhead while still meeting or exceeding customer expectations and SLAs is a key measure of success.

  • Use of virtualization has reduced MSIT’s space and power consumption significantly already, but in conjunction with virtualization, optimized infrastructures (“Scale Unit”) could reduce the footprint by up to 90% over the next few years.

  • Proper use of virtualization has enabled Microsoft to avoid millions of dollars of capital costs for new equipment and datacenter expansion in what was an underutilized environment.

  • MSIT has been able to pass along cost savings in reduced procurement and hosting charges to their internal customer base.

  • Machine virtualization and complementary technologies are critical to meeting MSIT’s business strategies and priorities.

  • The level of reliability and availability achievable with VMs meets the needs of most production applications.

  • Properly handled, virtualization can be a significant step forward in achieving dynamic systems infrastructure.

Education Resources

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