IT and Business Insights for SMB Solution Providers

Virtual Servers, Real Opportunities

By saving money and increasing manageability and efficiency, virtualization may be a good option for your SMB clients. Here's some advice from industry watchers. By Tom LeBlanc

Word is spreading. That's the good news for companies offering server virtualization services to businesses. The benefits--lower costs and greater infrastructure flexibility-seem to be catching eyes, according to Forrester Research Inc. The Cambridge, Mass.-based technology and market research firm says that 75 percent of 1,221 enterprises it surveyed for a study were aware of server virtualization technology, 26 percent had implemented it, and 8 percent more planned to pilot it.

While that penetration appears impressive, Matt Brudzynski, senior research analyst at London, Ontario-based analyst firm Info-Tech Research Group, says that adoption of virtualization technology skews disproportionately to larger companies.

According to Info-Tech data, 80 percent of companies with more than 5,000 employees have adopted or plan to adopt virtualization. Among companies with 101 to 500 employees, though, the figure falls to 55 percent; among companies with 100 or fewer employees, it drops to 25 percent.

Over the past 18 months, however, the costs of implementing virtualization have fallen dramatically, primarily due to lower costs for storage area network (SAN) products. Brudzynski says he expects the price drops to result in a rapid rise in server virtualization among SMBs.

When implemented properly, the benefits of virtualization for small to midsize companies are great--and therefore easy to sell. Unlike many other technologies, explains Brudzynski, virtualization delivers immediate savings in two forms: cost savings resulting from lower up-front capital expenditures (i.e., fewer servers) and power savings due to fewer servers being used.

There are barriers to greater SMB investment in server virtualization technology, however. One, ironically, is cost. Though prices are falling, companies still need to invest in new hardware, including a SAN, plus software and software licensing. Additionally, Brudzynski says that many ISVs have yet to offer per-virtual-processor license terms, so licensing a virtual implementation may actually cost more than licensing an equal number of physical servers.

"This is due to the fact that the host virtual server will have many processors, and despite many virtual machines running concurrently on that host, some ISVs will want to charge based on the number of physical processors on the host," Brudzynski observes. Still, it's important for IT consultants and service providers to help SMBs see past those barriers, says Brudzynski.

He recommends three sales pitches:

  • It saves money. There are fewer servers to buy now and more power savings in the future.
  • It increases manageability and efficiency. Virtualization enables you to manage multiple servers as a single network resource.
  • It scales well. As companies grow and their server needs scale, new virtual servers can be brought up in a matter of minutes.
  • Also, in a virtualized environment, IT managers can assess server loads more accurately, and thus gauge their need for additional server capacity more precisely.
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