How will the virtualisation market change in the next five years?

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This article appeared in the 21st July, 2008 issue of CRN magazine.

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Virtualisation is one of today’s fastest-growing IT markets. It has been singled out as introducing the ‘next step’ in consolidation. Many believe that it provides a comprehensive answer to help businesses reduce operating and infrastructure costs, optimise performance and simplify resource management. Despite this belief, according to a recent IDC survey, 50.7 percent of Australian organisation still have no virtualised servers, and 26.7 percent said they do not fully understand the benefits of virtualisation.

Unlike traditional IT solutions, virtualisation involves a fundamental shift in the way businesses use, manage and even think about technology. Rather than conforming to the traditional “one server/one application” approach, virtualisation makes it possible to run multiple operating systems and applications on the same computer at the same time.

There are a few key reasons that have been mentioned to IDC by Australian organisations for deploying virtualisation. Reduced cost and improved management have been given as well as reducing the time it takes to provision a new server.

According to Michelle Bailey, research vice president of Enterprise Platforms at IDC, “Recent IDC research indicates that by 2011, more than 18 percent of all new servers will be virtualised—representing a market opportunity of almost $22 billion annually for server hardware suppliers alone.”

A growing challenge for businesses is how to manage and secure their virtual environments – as organisations adopt virtualisation the traditional challenge of managing physical server sprawl is shifting to the challenge of managing virtual machine sprawl. Organisations will require reliable, stable, secure and managable virtualisation solutions.

Green IT has been listed as the number one strategic technology and trend for most organisations in 2008.According to IDC, the “Green” benefits of virtualisation, reducing not only the server footprint, but also the carbon footprint and electricity consumption, are increasingly becoming important benefits.

According to an IDC survey on Green IT run in APAC, 75 percent of respondents did not have a Green IT policy for their IT department. However, more than 80 percent believed that the “Greenness” of their IT suppliers would become much more important over the next few years.

Virtualisation is set to play a key role in this, with some enterprises looking to adopt a more environmentally friendly approach to operating their business in a bid to win government contracts. Others are adopting virtualisation for its power-saving benefits and reducing the carbon footprint comes as a bonus.


Diagnosis 1

Michael Costigan
Marketing director, Avnet

Despite the vast potential of virtualisation, many resellers are unfamiliar with the actual facts about this promising new technology. Organisations are able to gain significant energy and computing efficiencies, while increasing technology utilisation and flexibility.

To help your customers realise these benefits and establish a strong market foothold for your business, you need to get down to the basics about this powerful new technology and what it takes to effectively identify and capitalise on the very real opportunities of virtualisation.

Today’s customers don’t want or need “more of the same” when it comes to their technology solutions, particularly when faced with the ongoing challenges of shrinking IT budgets, increasingly competitive markets, increased regulation and spiralling overhead costs. Virtualisation helps address many of these challenges with sustainable, measurable benefits that are highly compelling to C-level decision-makers as well as IT managers.

Virtualisation is being used to address an ever-widening array of business goals and challenges such as server consolidation/containment, business continuity, testing/development optimisation, software development and distribution and desktop management and security.

Given the diversity and potential complexity of virtualisation solutions, customers need resellers who can do more than simply “sell software.” They want and expect partners who can work with them on a consultative basis to effectively take cost out of their business.

The facts are clear — virtualisation is a substantial opportunity that offers very real returns for those well prepared and positioned to pursue it. But it takes more than ambition; it requires the right partner.

Diagnosis 2

Patrik Bihammar
Senior analyst of software, A/NZ, IDC
There is clearly a lot of interest in the future of virtualisation, but also a lot of hype. The first wave of x86 server virtualisation adoption has been centered on server consolidation, focused on reducing capital costs (i.e. server spending) and, to lesser extent, operational costs such as power and cooling. Over the next five years organisations will be moving beyond server consolidation and looking at how they can employ virtualisation for a number of other use cases and benefits, focused on reducing operational cost (e.g. physical management cost) and making the infrastructure more dynamic and agile, to improve IT responsiveness to changing business requirements.

I would point out that whilst virtualisation may reduce capital server cost and the time it takes to build a new server, it will not necessarily improve or simplify management due to virtual server sprawl. It is important to consider and plan the processes and tools that will be required to manage the lifecycle of virtual machines to avoid added or new management complexities.

I believe that the next big thing for virtualisation will be as a tool for high availability (HA) and disaster recovery (DR). DR has historically been very hard to manage, and virtualisation is well positioned to provide cost-effective and easy-to-manage DR solutions.

Virtual desktops (VDI), resource balancing, and application-level high availability are likely to be other future use cases. Today these solutions have some technical and economic hurdles that must be overcome before broad adoption can occur, but given the focus on virtualisation, these gaps have already started to close. It could also become a great enabling technology for SOA adoption.
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