Virtualizations Time to Roll

By Brian P. Watson  |  Posted 2007-10-02

In the fledgling history of virtualization, this summer may go down as a watershed.

On the upside, two major events among leading vendors lent even more legitimacy to virtualization. First came the long-awaited initial public offering of market leader VMware on August 14. The next day, Citrix said it would acquire XenSource, an open source virtualization vendor.

The only downside: Microsoft, in the same month, said it would push back its Windows Server 2008 introduction to next February, delaying the release of new server virtualization software.

Regardless of the setback, virtualization is ready for its close-up. Deployments of server virtualization software—which allow companies to run multiple operating systems on a single, virtual machine—have grown in recent years. Forrester says 51% of North American businesses were either using or piloting virtualization software last year, up almost 10 percentage points from 2005.

Virtualizing other pieces of the IT puzzle, like applications, desktops and even hardware, are also on the rise. "Virtualization has the potential to touch every aspect of infrastructure," says Raghu Raghuram, vice president of products and solutions for VMware. "It's pretty limitless."

Next Page: Alleviating Concerns

Alleviating Concerns

There's no question virtualization has helped companies cut power and cooling costs in their data centers, slash hardware expenditures and get applications up and running more quickly. Some obstacles that stifled early adoption persist today, but others have gone away.

An August 2007 study by Rackspace, a San Antonio Web hosting firm, identified two major obstacles to virtualization's adoption: lack of user experience and immature technology. In many ways, the two issues are interconnected. The lack of experience has roots in an old ethos among IT professionals: Put one application on a single physical server box. That belief caused many companies to shy away, says George Scangas, manager of IT architecture at Welch's, the Concord, Mass.-based juice and condiment maker.

As a result, few IT staffers got experience building and managing virtual environments. What's more, early on, some leading software vendors worried about virtualization's reliability, as well as how the technology would affect licensing and support, according to Gartner analyst John Enck. Many of those vendors actually wrote clauses into their licensing agreements prohibiting customers from deploying their applications in virtual environments, Enck says.

Because of those factors, companies focused their virtualization efforts around second-tier applications —not mission-critical ones. The new technology thrived in testing and development, but production remained out of reach.

Fast forward to today.

Software vendors no longer cringe at the prospect of virtualization. VMware's Raghuram doesn't think vendors were so much spooked by the idea of the technology as by the challenges of properly configuring virtual servers.

More software providers have come to virtualization vendors looking for certification and testing protocols to ensure their products work with virtual machines, according to Raghuram. "As a technology company, you don't want to be seen as a technology laggard," he says.

Customers, in turn, have shown an increased willingness to include crucial programs in their virtualization efforts: More than 70% of respondents to Rackspace's August survey said they'd deploy mission-critical applications in virtual environments.

Some IT executives haven't had a choice. When Scangas joined Welch's in late 2002, the company had already dived in. Welch's was using VMware's GSX server, a hosted virtualization software tool, but has since upgraded to ESX server, which introduced a hypervisor that runs on top of the server and controls the operating system.

Initially, Welch's looked to reduce the number of its aging Dell servers, which were underused and took up space in the data center. "If we didn't have virtualization, we'd definitively be in a new data center," Scangas says. A new server facility, Scangas estimates, would have cost in the high six figures.

Scangas didn't rush into running mission-critical applications on VMware. Quickly, though, he saw the cost savings from less cabling, power and rack space. Besides avoiding costs of a new data center, Welch's saved at least $300,000 in hardware costs, he says. And that doesn't include the savings from lower power and cooling usage. (Scangas hasn't yet run those numbers.)

The company now runs about 100 virtual machines, which Scangas expects to increase to 110 or 120 in the next three months as he deploys new applications. He and his team have about 12 virtual machines on each physical box in production.

And as VMware's technology matured with the ESX Server release, Scangas has become more willing to put business-critical programs on VMware.

What's more, Scangas and his team are looking to extend the technology to meet Welch's disaster recovery needs and boost the hardware savings by eliminating the need for redundant hardware in an off-site facility. "There's so much potential," he says.

Next Page: Inconclusive Results

Inconclusive Results

Potential may be the operative word. According to a June study by The Strategic Council, 45% of companies consider their virtualization deployments unsuccessful. More than a quarter say they have failed to realize a return on investment or aren't sure when they will, while more than four in 10 didn't hit their cost savings estimates. It's not all blue skies for everyone.

Still, virtualization is clearly here to stay. On the day of VMware's IPO, company shares jumped from their $29 debut price to $51. They have since traded as high as $82.75. Citrix's acquisition of XenSource, which hasn't yet closed, gives the open source virtualization vendor a wider potential customer base and the opportunity to integrate with Citrix's strong application delivery tools.

Both vendors are also looking to integrate their virtualization software directly into the server instead of being installed on a hard drive. In early September, XenSource unveiled a software product that could be embedded onto server hardware, and VMware followed days later with its own offering.

Microsoft's entry, whenever it happens, will provide another boost. While the software giant only has 9% of the virtualization market, it has the market power to grab a bigger share and spur adoption.

Not that many users are waiting. With existing vendors and others improving and broadening their offerings, this is one train that has already pulled out of the station.

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