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White!Paper!
!
Applying!an!Economic!Model!to!IT!
Management:!!
Operations!Management!in!the!Virtual!Data!Center!
!

VMTurbo,!Inc.!
One!Burlington!Woods!Drive!
Burlington,!MA!01803!USA!
Phone:!(781)!373I3540!!
www.vmturbo.com!

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©!2012!VMTurbo,!Inc.!All!Rights!Reserved.!
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CONTENTS!
Contents!.......................................................................................................................................................!2!
Executive!Summary!.......................................................................................................................................!3!
The!Challenges!of!Virtualization!Management!..............................................................................................!3!
Virtualization!is!a!Game!Changer!....................................................................................................................................!4!

Managing!the!Tradeoffs!Between!Utilization!and!Performance!.....................................................................!6!
Managing!Virtualized!IT!Stacks!With!Economic!Abstractions!.........................................................................!8!
Modeling!Virtualized!IT!Stacks!as!Service!Supply!Chains!................................................................................................!9!
Using!Virtual!Currency!to!Manage!Supply!and!Demand!.................................................................................................!9!
The!Value!of!Virtual!Money!..........................................................................................................................................!10!
Economic!Management!of!Resource!and!Performance!................................................................................................!11!
Disruptive!Correlated!Workloads!..............................................................................................................................................!11!
Storage!IO!Bottleneck!................................................................................................................................................................!11!
CoIScheduling!Problems!............................................................................................................................................................!11!

Conclusion!..................................................................................................................................................!12!
About!VMTurbo!..........................................................................................................................................!12!
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All trademark names are property of their respective companies.

VMT-WP-ECONOMIC-1212!

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EXECUTIVE!SUMMARY!
Traditional!IT!architectures!have!been!typically!based!on!silos,!with!computing!resources!dedicated!to!specific!
applications!and!overIresourcing!to!accommodate!peak!demands!and!potential!future!growth.!Virtualization!
systems!have!been!replacing!these!silos!with!a!layer!of!shared!resources,!multiplexed!among!dynamic!
workload!demands.!This!consolidation!of!resources!and!workloads!has!resulted!in!dramatic!productivity!gains,!
improving!the!efficiency!of!IT!infrastructure!and!application!performance,!while!reducing!IT!costs.!!
However,!virtualization!leads!to!new!operations!management!challenges,!beyond!the!scope!of!traditional!
paradigms.!In!particular:!!
! Virtual!machine!(VM)!resource!utilization!and!performance!behaviors!may!be!dramatically!different!from!
those!of!physical!servers.!In!contrast!with!physical!servers,!VM!resources!fluctuate!dynamically!and!may!
experience!interference!from!other!VMs!sharing!the!same!physical!host.!!
! Virtualization!increases!the!utilization!of!physical!resources,!possibly!driving!applications!beyond!the!
boundaries!of!“safe”!operations!and!creating!quality!of!service!(QoS)!issues.!!
! Virtualization!eliminates!IT!silo!boundaries,!making!each!layer!of!the!IT!stack!more!sensitive!to!interference!
by!the!others.!These!interferences!can!lead!to!reduced!performance,!availability,!and!efficiency,!and!
reduced!ROI!at!every!layer!of!the!IT!stack.!!
Thus,!virtualization!requires!resource!and!performance!management!technologies!designed!to!handle!these!
factors!of!complexity.!These!technologies!need!to!replace!manual!partitioned!management!with!proactive,!
scalable,!automated,!and!unified!resource!and!performance!management.!!
This!white!paper!describes!VMTurbo’s!supply!chain!economy!approach,!which!uniquely!addresses!these!
requirements.!!VMTurbo!combines!monitoring,!analytics!and!actions!to!enable!proactive!virtualization!
management.!!VMTurbo’s!ObserveIAdviseIAutomate!model!delivers!intelligent!and!holistic!visibility,!analytics!
and!automation.!
!

THE!CHALLENGES!OF!VIRTUALIZATION!MANAGEMENT!
Traditional!IT!infrastructures!have!been!typically!organized!as!resource!silos,!dedicated!to!specific!applications.!
Applications,!such!as!a!sales!automation!system!or!customer!relationship!management!(CRM),!depicted!in!
Figure!1,!are!provided!with!dedicated!physical!hosts.!These!hosts!are!typically!overIresourced!to!handle!peak!
workloads.!The!average!workload!is!often!a!small!singleIdigit!percentage!of!this!peakItime!traffic.!Thus,!during!
offIpeak!hours,!the!capacity!of!silo!resources!far!exceeds!workload!demands,!assuring!best!performance!of!
applications.!!
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Figure'1. 'Traditional'IT'Stack'Silos' '
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Traditional!IT!operations!management!has!been!partitioned!along!silo!boundaries.!Each!silo!often!involves!
different!configurations!and!operations!parameters!to!be!monitored,!analyzed!and!controlled.!Operations!
management!has!thus!focused!on!managing!silo!configurations,!with!resource!and!performance!management!
often!relegated!to!incremental!deployments!of!excess!capacity!to!handle!growing!peak!loads.!!

Virtualization!is!a!Game!Changer!
Hypervisors!eliminate!silo!boundaries!to!provide!efficient!resource!sharing!among!workloads.!They!package!
shares!of!the!physical!resources!into!VMs!that!process!workloads!of!respective!applications,!as!depicted!in!
Figure!2.!This!resourceIsharing!architecture!can!dramatically!improve!resource!utilization!and!enable!flexible!
scaling!of!resources!and!workloads.!
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Figure'2. 'Virtualization'Architecture' '
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Virtualization!transforms!the!fundamentals!of!traditional!operations!management:!!
! Virtualization!eliminates!the!silo!boundaries!and!provides!uniform!abstractions!to!manage!configurations.!
This!can!greatly!simplify!configuration!management!through!common!templates.!!
! Even!when!VMs!are!semantically!indistinguishable!from!physical!servers,!their!operational!behaviors!can!
be!fundamentally!distinct:!!
! Unlike!physical!servers!whose!resources!are!static,!the!resources!available!to!a!VM!may!vary!
dynamically.!Therefore,!VMs!require!dynamic!management!of!their!resources’!allocations.!
! Unlike!physical!servers!whose!performance!is!independent!of!other!servers,!VMs!sharing!a!host!can!
interfere!with!each!other,!leading!to!complex!performance!management!challenges.!!Virtual!
infrastructures!shift!the!focus!of!operations!management!from!configuration!management!to!resource!
and!performance!management.!
! The!consolidation!of!workload!streams!increases!average!resource!utilization.!If!workloads!are!
uncorrelated,!their!peaks!may!be!dispersed!and!accommodated!by!the!excess!capacity!required!for!
individual!workloads.!If,!however,!the!underlying!workloads!are!correlated,!their!peaks!may!be!
compounded,!resulting!in!bottlenecks,!performance!degradation!and!failures.!Virtualization!management!
must!provide!protections!against!such!dynamic!problem!scenarios.!!
! Virtual!infrastructures!are!limited!in!assuring!application!performance!through!static!overIresourcing!of!
capacity.!Instead,!they!require!active,!automated,!management!technologies!to!provide!these!assurances.!
! Virtualization!removes!the!silo!boundaries,!allowing!crossIelement!interferences!and!respective!
propagation!of!problems.!Traditional,!partitioned!management!requires!complex!coordination!among!the!
infrastructure,!application,!storage,!and!network!administrators!to!resolve!such!problems.!Virtualization!
management!requires!technologies!to!unify!monitoring,!analysis!and!control!of!elements!to!avoid!these!
complexities.!!
Virtual!infrastructures!offer!the!potential!to!automatically!reduce!the!need!for!laborIintensive!management.!
Monitoring,!analysis!and!control!functions!should!be!unified!and!automated!to!permit!a!small!number!of!
administrators!to!manage!largeIscale!infrastructures.!!

Even'Correlated'Workloads'Can'Be'Disruptive''
Users!have!reported!significant!performance!problems!when!installing!
patches!for!guest!OSes.!Concurrent!patching!created!correlated!activity!at!
a!large!number!of!VMs.!These!correlated!workloads!produced!large!
compounded!traffic!peaks,!far!exceeding!the!shared!excess!capacity.!
These!peaks!resulted!in!performance!degradation!and!failures.!!
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MANAGING!THE!TRADEOFFS!BETWEEN!UTILIZATION!AND!PERFORMANCE!
A!simple!way!to!handle!the!aforementioned!challenges!is!to!consider!the!tradeoffs!between!resource!
utilization!and!performance.!Traditional!performance!analysis!uses!delayIutilization!curves,!as!in!Figure!3,!to!
depict!these!tradeoffs.!Utilization!of!a!resource!(or!service),!depicted!by!the!horizontal!axis,!is!often!defined!as!
the!ratio!between!workload!arrival!rate!and!its!service!rate.1!The!vertical!axis!represents!the!performance!of!
the!service,!measured!in!the!average!queuing!delay!seen!by!workloads.!!
As!utilization!increases,!so!does!the!delay.!When!utilization!is!low,!the!delay!entirely!consists!of!the!processing!
time!through!the!service.!As!utilization!increases!beyond!some!risk!threshold,!buffers!will!fill!up,!resulting!in!
congestion,!bottlenecks!(sustained!congestion),!overflows,!losses!of!traffic,!and!failures.!If!utilization!further!
increases,!these!congestion!conditions!will!be!exacerbated.!

Figure'3. 'Delay/Utilization'Curve' '

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Without!virtualization,!each!silo!must!accommodate!fluctuations!of!utilization!between!average!and!peak!
traffic.!If!this!gap!is!large,!the!resource!will!be!underIutilized!most!of!the!time.!Resource!and!performance!
management!are!mostly!reduced!to!static!overIresourcing!of!each!silo!and!ensuring!that!peaks!are!well!
handled.!!
Virtualization!consolidates!multiple!workload!streams!to!improve!average!utilization.!The!average!utilization!is!
the!sum!of!the!individual!stream!utilizations!and!is!shifted!accordingly!to!the!right.!If!the!workloads!are!
uncorrelated,!the!peaks!of!the!aggregate!workloads!could!be!serviced!at!similar!utilization!levels!as!individual!
streams.!As!a!result,!the!average!utilization!can!grow!while!the!peak!utilization!is!retained,!improving!resource!
efficiency.!!
Still,!occasional!correlations!or!peak!workloads!can!push!utilization!beyond!the!risk!thresholds.!This!could!
result!in!congestion,!bottlenecks,!losses,!and!failures.!Therefore,!performance!management!can!no!longer!be!
handled!through!static!overIresourcing!and!must!proceed!with!dynamic!realItime!decisions.!This!leads!to!
substantially!novel!challenges.!!
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1
!Utilization!measures!the!amount!of!new!service!demand!arriving!during!unit!of!service!time,!also!known!as!throughput!processed!
by!the!resource.!

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To!illustrate!these!challenges,!it!is!useful!to!contrast!the!management!of!bottlenecks!in!traditional!systems!
versus!virtualization!systems.!A!bottleneck!is,!by!definition,!a!resource!experiencing!sustained!or!intermittent!
congestion.!Bottlenecks!typically!arise!during!peak!traffic!time.!Consider!first!the!silo!architecture!of!Figure!1.!
The!sales!automation!application!administrators!can!anticipate!potential!bottlenecks!during!its!peak!time!of!3I
5!pm.!They!detect!these!bottlenecks!by!monitoring!threshold!events.!For!example,!bottlenecks!in!the!storage!
access!path!may!manifest!in!excessive!queue!lengths.!Resolution!is!simple:!avoid!bottlenecks!by!provisioning!
additional!capacity!to!absorb!the!peaks!!(i.e.,!deploy!a!higher!bandwidth!host!bus!adapter![HBA]).!While!this!
excess!capacity!is!wasted!during!offIpeak!times,!it!eliminates!costlier!bottlenecks.!
Bottlenecks!in!virtualization!systems!may!be!much!more!complex!to!detect!and!isolate.!At!the!same!time,!
virtualization!admits!more!flexible!resolution!strategies!(see!Virtualization'IO'Bottleneck!sidebar).!

Virtualization'IO'Bottleneck'
Consider!the!Human!Resources!(HR)!and!sales!automation!applications!of!Figure!2.!If!their!peak!times!are!9I
11!am!and!3I5!pm,!respectively,!the!applications!administrators!continue!to!monitor!threshold!events!during!
peak!times,!just!as!they!did!before!converting!from!physical!to!virtual!infrastructures.!Suppose!a!bottleneck!
occurs!during!offIpeak!time.!There!could!be!numerous!root!causes,!such!as!the!compounded!IO!streams!
exceeding!the!capacity!of!elements!along!the!IO!path.!Alternatively,!the!HR!application!may!generate!an!IO!
stream!of!random!accesses!that!disrupts!the!sequential!access!by!the!sales!automation!application.!In!this!
case,!the!HR!application!administrator!may!not!see!any!bottleneck!signs,!while!the!sales!automation!
application!administrator!may!see!slow!response!and!queues,!even!when!the!workload!is!perfectly!normal.!
Detecting!and!isolating!the!bottleneck!may!be!very!difficult!and!may!require!complex!collaboration!between!
application,!virtualization,!and!storage!administrators.!!
Once!the!bottleneck!has!been!isolated,!virtualization!offers!more!flexible!and!efficient!resolution!than!silos.!
By!reconfiguring!resources!to!increase!the!capacity!of!the!IO!path!the!bottleneck!can!be!avoided.!For!
example,!route!the!IO!streams!over!different!pathways,!increase!the!buffers!along!the!pathways,!or!use!
different!LUNs.!Alternatively,!one!may!shift!VM1!or!VM2!to!another!host!where!storage!IO!is!more!available.!
Still!another!resolution!is!to!provision!new,!higher!bandwidth!HBAs.!This!greater!flexibility,!however,!comes!
at!the!price!of!increased!operational!complexity.!

More!generally,!several!fundamental!factors!influence!the!complexity!of!virtualization!management:!!
! Interference:!Workload!streams!sharing!a!resource!may!disrupt!each!other.!!
! Ambiguity:!Operations!data!of!a!resource!may!reflect!the!aggregate!behaviors!of!multiple!workload!
streams!sharing!it,!making!it!difficult!to!interpret!the!data!and!isolate!the!effects!of!individual!streams.!!
! Fragmentation:!Configuration!management!is!fragmented!along!silo!and!element!boundaries.!Yet,!
performance!problems!may!propagate!among!multiple!elements!and!systems,!requiring!complex!
coordination!among!virtualization,!applications,!and!storage!administrators.!!
! Higher!utilization:!Leads!to!higher!probability!of!performance!problems,!bottlenecks!and!failures.!!
! Hypervisor!complexities:!Hypervisor!mechanisms!may!give!rise!to!management!problems.!For!example,!
some!VMs!may!require!symmetric!multiIprocessor!(SMP).!The!hypervisor!provides!SMP!semantics!by!
scheduling!concurrent!vCPUs.!This!may!lead!to!coIscheduling!problems!(see!CoGScheduling'Problem!
sidebar).!Similar!performance!problems!arise!through!hypervisor!memory!management!mechanisms.!
! NonYscalability:!Partitioned,!manual!management!requires!administrator!hours!proportionally!to!the!
number!of!elements!and!to!the!rate!of!their!change!events.!Virtualization!increases!both!factors!of!scaling:!
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it!stimulates!higher!rate!of!deploying!VMs,!as!compared!with!deploying!physical!hosts;!and!it!admits!
flexible!dynamic!changes!that!increase!the!rate!of!change!events.!Therefore,!partitioned!manual!
management!is!intrinsically!nonIscalable!for!virtualization!systems.!!
These!factors!of!virtualization!management!complexity!reflect!needs!for!novel!resource!and!performance!
management!technologies!that!can!transcend!the!boundaries!of!traditional!siloIcentric!management.!!

MANAGING!VIRTUALIZED!IT!STACKS!WITH!ECONOMIC!ABSTRACTIONS!
VMTurbo!solutions!focus!on!the!resource!and!performance!management!problems!described!in!the!previous!
sections.!The!overall!strategy!is!to!replace!manual!partitioned!management!with!scalable,!automated,!and!
unified!resource!and!performance!management!abstractions.!!
The!point!of!departure!is!to!note!that!resource!and!performance!management!problems!may!be!recast!as!
balancing!the!supply!and!demand!for!resources.!For!example,!bottlenecks!are!formed!when!local!workload!
demands!exceed!the!local!supply!of!resource!capacity.!This!suggests!the!use!of!economic!techniques!to!
efficiently!redistribute!the!demand,!or!increase!the!supply.!Indeed,!a!large!body!of!research!has!established!
the!value!of!economic!techniques!for!IT!resource!management,!through!several!thousand!publications.!!
Accordingly,!VMTurbo!resource!and!performance!management!technologies!are!based!on!an!economic!model!
involving!two!sets!of!abstractions:!!
! Modeling!the!virtualized!IT!stack!as!a!service!supply!chain,!where!components!(e.g.,!VMs)!consume!
services!of!other!components!(e.g.,!physical!hosts)!and!offer!services!to!their!consumers!(e.g.,!guest!OSes!
and!applications).!!
! Using!pricing!mechanisms!to!balance!the!supply!and!demand!of!services!along!this!supply!chain,!resource!
services!are!priced!to!reflect!imbalances!between!supply!and!demand,!and!drive!resource!allocation!
decisions.!For!example,!a!bottleneck,!reflecting!excess!demand!over!supply,!will!result!in!raising!prices!of!
the!respective!resource.!Applications!competing!over!the!resource!will!shift!their!workloads!to!alternate!
resources!to!lower!their!costs,!resolving!the!bottleneck.!!

A'CoGScheduling'Problem'
Consider!a!VM!requiring!a!vSMP!with!four!vCPUs.!This!VM!may!expect!these!four!
vCPUs!to!be!concurrently!available!to!support!SMP!semantics.!The!hypervisor!queues!
it,!until!it!can!coIschedule!four!vCPUs.!In!the!meantime,!VMs!requiring!only!one!vCPU!
may!be!served!as!soon!as!a!vCPU!is!released.!If!traffic!is!sufficiently!heavy,!the!vSMP!
will!be!starved!in!the!queue,!exhibiting!sluggish!performance.!This!coIscheduling!
problem!may!lead!to!paradoxes.!Administrators!may!try!to!accelerate!a!VM!by!
doubling!the!amount!of!its!vCPU.!But!this!may!paradoxically!lead!to!performance!
degradation!due!to!coIscheduling!problems.!Administrators!must!be!intimately!
familiar!with!the!hypervisor!internals!in!order!to!detect,!isolate,!and!handle!such!
problems.!
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Modeling!Virtualized!IT!Stacks!as!Service!Supply!Chains!
Figure!4!depicts!a!virtualization!management!scenario.!VMTurbo!presents!a!unified!view!of!the!system!as!a!
layered!supply!chain!of!IT!services.!The!top!layer!consists!of!business!units!(users)!consuming!application!
services.!These!application!services!consume!services!offered!by!the!VMs!of!the!virtualization!layer.!The!VMs,!
in!turn,!consume!services!provided!by!the!physical!layer.!The!physical!layer,!including!the!hosts,!LAN!and!SAN,!
provides!services!to!the!VMs!and!consumes!services!provided!by!a!layer!of!shared!operating!services.!These!
operating!services!include!dynamic!services,!such!as!energy,!cooling,!network!and!storage!access,!as!well!as!
static!services!such!as!data!center!floor!space,!CAPEX!and!OPEX.!!

Figure'4. 'A'Service'Supply'Chain'Model'of'the'IT'Stack' '

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This!supply!chain!model!may!be!represented!by!a!small!number!of!software!abstractions!(i.e.,!provider,!
consumer,!demand,!capacity)!to!capture!the!resource!allocation!relationships!along!virtualized!IT!stacks.!
Notice!that!the!model!views!a!resource!as!service!provider.!For!example,!the!sales!automation!application!at!
VM1!may!consume!services!offered!by!a!database!server,!depicted!as!App1!at!VM5.!Notice,!too,!that!the!
services!supply!chain!may!be!highly!dynamic;!service!components!may!be!deployed!or!terminated!dynamically!
and!may!dynamically!change!their!demand!for!services!by!other!components.!!

Using!Virtual!Currency!to!Manage!Supply!and!Demand!
The!supply!chain!abstractions!are!complemented!by!virtual!currency!abstraction,!used!to!balance!the!supply!
and!demand!for!services.!Service!components!use!virtual!currency!to!price!and!pay!for!services.!For!example,!a!
server!may!price!its!CPU,!memory,!network,!and!storage!IO!services!in!terms!of!virtual!currency.!VMs!must!pay!
for!the!services!they!wish!to!acquire!using!the!income!from!their!applications.!The!applications,!in!turn,!pay!
for!the!VM!services!they!consume,!using!budgets!provided!by!their!users.!Users!may!budget!applications!to!
reflect!their!business!value.!!
The!pricing!of!services!is!guided!by!the!dynamics!of!supply!and!demand,!as!well!as!underlying!costs!and!ROI!
targets.!For!example,!Host1!may!set!its!prices!for!CPU,!memory,!storage!IO!and!network!IO!to!first!reflect!its!
costs!for!operating!services,!and!second,!to!account!for!the!differences!between!supply!and!demand!for!these!
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resources.!An!excess!demand!for!storage!IO!by!the!sales!automation!and!HR!VMs!will!result!in!price!increases.!
VM2,!executing!the!HR!application,!may!be!unable!to!afford!the!IO!bandwidth!required!and!may!migrate!to!
another!host.!In!contrast,!VM1!may!use!its!higher!budget,!provided!by!the!sales!application,!to!acquire!
increasing!share!of!the!IO!bandwidth.!!
Note!that:!!
! Standard!pricing!mechanisms!can!be!used!to!accomplish!optimized!balancing!of!supply!and!demand,!
through!a!distributed!invisible!hand.!!
! Applications!of!higher!business!value!may!be!budgeted!accordingly!and!obtain!service!level!
prioritization!commensurable!with!their!value.!!
! Virtual!currency!permits!rigorous!quantification!of!the!profitability!of!a!service!component!in!terms!of!
its!revenues!and!costs;!the!underlying!economics!will!optimize!the!entire!supply!chain.!!
The!costs!of!IT!are!used!to!price!the!operating!services!at!the!lowest!layer.!Budgets!are!used!to!reflect!
business!value!returned!by!the!applications!at!the!highest!layer.!Pricing!drives!the!resource!management!
decisions!along!the!intermediate!layers,!to!optimize!the!relationships!between!the!costs!and!returns.!!

The!Value!of!Virtual!Money!
Now!consider!the!value!of!money!in!managing!the!tradeoffs!between!utilization!and!performance.!This!is!
illustrated!in!Figure!5.!Part!I!of!the!figure!depicts!the!utilization!of!a!resource!at!three!different!hosts:!A,!B,!C.!
Host!A!is!lightly!loaded;!Host!B!is!comfortably!utilized!below!the!risk!thresholds.!From!time!to!time,!however,!
the!utilization!of!Host!B!may!fluctuate!to!the!right,!resulting!in!temporary!congestion.!Host!C!is!utilized!beyond!
the!risk!threshold,!possibly!resulting!in!congestion,!bottlenecks,!losses,!and!likely!failures.!

Figure'5. 'Tuning'Resource'and'Performance'Management'Using'Pricing'Mechanisms'
!
Each!of!these!utilizations!reflects!a!different!balance!between!supply!and!demand.!The!price!of!the!resource!
will!grow!with!utilization.!Therefore,!the!resource!price!at!Host!A!could!be!very!low,!while!the!price!at!Host!C!
could!far!exceed!the!budgets!of!its!VMs.!VMs!may!decide!to!migrate!to!hosts!offering!lower!prices.!This!will!

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cause!utilizations!at!Hosts!C!and!B!to!drop,!by!shifting!workloads!to!Host!A,!whose!utilization!increases.!This!
scenario!is!depicted!in!Part!II,!where!the!workloads!are!shifted!until!prices!at!Hosts!A,!B!and!C!are!equalized!
within!acceptable!deviation!from!each!other.!This!pricingIbased!tuning!of!the!utilizationIperformance!
tradeoffs!may!be!used!to!resolve!difficult!resource!and!performance!management!problems!simply!and!
uniformly.!!

Economic!Management!of!Resource!and!Performance!!
This!section!illustrates!the!use!of!the!economic!mechanisms!to!resolve!the!sample!virtualization!management!
problems,!described!in!the!sidebars!of!previous!sections.!!
Disruptive*Correlated*Workloads**
Start!with!the!problem!of!mutually!disruptive!correlated!workloads!of!the!first!sidebar.!Administrators!
initiate!simultaneous!installation!of!patches!for!a!large!number!of!guest!OSes.!This!creates!correlated!
workloads!at!a!large!number!of!VMs,!exhausting!the!host!resources!and!leading!to!performance!problems!
and!failures.!Manual!administration!requires!administrators!to!carefully!schedule!the!patch!installations!
and!monitor!their!performance!impact!to!handle!the!problem.!!
With!economic!management,!the!patch!installation!application!will!be!budgeted!as!low!priority,!compared!
with!businessIcritical!applications.!As!soon!as!traffic!increases,!these!patching!applications!will!be!priced!
out!and!queued,!until!resources!are!more!affordable!to!them.!This!can!automatically!spread!the!scheduling!
of!the!patch!installation,!eliminating!the!workload!correlations!and!respective!peaks.!!
Storage*IO*Bottleneck**
Now!consider!the!storage!IO!bottleneck!of!the!second!sidebar.!Suppose!the!sales!automation!application!
sees!a!dramatic!decline!in!its!performance!during!offIpeak!hours.!This!decline!may!result!from!disruption!
of!the!sequentialIaccess!stream!of!the!sales!automation!application,!by!a!randomIaccess!stream!of!the!HR!
application.!The!administrator!of!the!sales!automation!application!requires!complex!collaborations!with!
the!virtualization!and!storage!administrators!to!monitor,!analyze!and!isolate!the!problem.!Once!the!source!
of!the!performance!bottleneck!has!been!determined,!the!administrators!can!resolve!it!by!separating!the!
two!traffic!streams.!!
With!economic!management,!the!storage!IO!capacity!to!service!random!access!is!significantly!higher!than!
sequential!access.!One!can!introduce!additional!pricing!of!interference!induced!by!random!access.!The!HR!
application!will!see!significant!increase!of!IO!prices!and!will!seek!alternate,!lower!priced!storage!IO!services!
(by!shifting!its!IO!stream!to!a!different!path,!or!moving!its!storage!to!a!different!LUN).!This!can!be!entirely!
automatic,!with!administrators’!involvement!limited!to!approving!the!recommended!decisions!on!
alternate!resources,!as!proposed!by!the!economic!scheduling!engine.!!
Co9Scheduling*Problems**
The!coIscheduling!problem!arises!when!a!VM!providing!vSMP!services!is!starved!for!concurrent!allocation!
of!the!multiple!vCPUs!it!needs.!At!the!same!time,!other!VMs!requiring!less!vCPUs!grab!CPU!resources!as!
soon!as!they!become!available.!This!problem!arises!because!the!effective!capacity!allocated!for!the!vSMP!
service!is!too!low!to!meet!its!demand.!With!economic!management,!this!excess!demand!by!the!vSMP!
service!will!cause!an!increase!in!the!price!of!a!vCPU!for!all!VMs!sharing!the!host.!They!may!cause!lower!
priority!VMs!to!migrate!to!other!hosts!offering!lower!prices.!This!will!reduce!the!pressure!on!vCPU!
availability!to!serve!the!vSMP.!Pricing,!in!effect,!corrects!the!unfair!prioritization!by!the!hypervisor!
scheduler,!giving!lower!priority!to!meet!the!vSMP!needs,!as!compared!with!VMs!requiring!a!single!vCPU.!!

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CONCLUSION!!
The!solutions!of!the!previous!section!illustrate!the!power!of!the!economic!abstractions.!More!generally,!these!
supply!chain!abstractions!provide!simple,!unified!and!scalable!solutions!to!a!broad!range!of!virtualization!
management!problems.!!
The!key!takeaways!are:!!
! Virtualization!systems!stretch!traditional!operations!management!paradigms!beyond!their!useful!
limits.!New!approaches!are!required!to!handle!the!resource!and!performance!management!needs!of!
virtualization!systems.!!
! The!abstractions!of!the!supply!chain!economy!can!dramatically!simplify!and!unify!the!solutions!of!
virtualization!management!problems.!These!economicIbased!solutions!are!intrinsically!scalable!and!
support!automated!problem!resolution.!!
! The!supply!chain!economy!can!reflect!business!priorities!of!applications.!Applications!generating!higher!
business!value!may!be!endowed!with!higher!budgets,!enabling!them!to!acquire!priority!access!to!
resources!and!improved!performance.!!
! Furthermore,!the!supply!chain!economy!associates!natural!ROI!metrics!with!resources!and!their!
utilization.!The!lowest!layer!in!the!supply!chain!is!one!that!expends!real!money!to!acquire!operating!
resources.!The!highest!layer!allocates!budgets!to!applications!to!monetize!their!business!value.!The!
supply!chain!economy!essentially!allocates!resources!to!optimize!the!returns!in!business!value,!on!
investment!of!IT!resources!costs.!Therefore,!the!supply!chain!economy!may!be!best!viewed!as!
establishing!systemic!ROIIcentric!management!of!virtualization!resources!and!performance.!!
! VMTurbo!provides!the!only!solution!that!utilizes!the!power!of!these!supply!chain!economy!
abstractions!to!deliver!ROIIcentric,!proactive,!scalable,!automated,!and!unified!virtualization!
management!by!combining!monitoring,!analytics,!and!actions!in!its!ObserveIAdviseIControl!model.!!
!

ABOUT!VMTURBO!
VMTurbo!delivers!an!Intelligent!Workload!Management!solution!for!cloud!and!enterprise!virtualization!
environments.!VMTurbo!uses!an!economic!scheduling!engine!to!dynamically!adjust!resource!allocation!to!meet!
business!goals.!The!VMTurbo!platform!first!launched!in!August!2010!and!since!that!time!more!than!8,000!cloud!
service!providers!and!enterprises!worldwide!have!deployed!the!platform!including!British!Telecom,!Omnicare!and!!
LI3!Communications.!Using!VMTurbo!our!customers!ensure!that!applications!get!the!resources!they!need!to!
operate!reliably,!while!utilizing!infrastructure!and!human!resources!in!the!most!efficient!way.!
VMTurbo!is!headquartered!in!Massachusetts,!with!offices!in!New!York,!California,!United!Kingdom!and!Israel.!

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