Is virtualization adoption recession-proof?

Despite declining IT operating budgets, virtualization adoption will dramatically accelerate and continue to top the priority list CIOs in 2009, says VMware Inc.’s Canadian country manager Grant Aitken. But despite the virtualization giant’s rosy forecast, industry observers remain much more cautious.

Citing unmatched ROI and total cost of ownership benefits, Aitken called VMware’s technology the safest way to cut IT costs while still delivering reliable services. He added that while the majority of Canadian CEOs are seeing a flat budget for 2009, many companies are now using their existing infrastructure funds to speed up virtualization adoption.

“We’re seeing companies accelerate virtualization spending,” Aitken said. “Three-year plans are being fast tracked to 12-month plans in order to reap the benefits.”

Desktop virtualization and the company’s vCloud initiative are also beginning to see significant traction among its more sophisticated customers, he added.

“A very high percentage of customers are adopting virtualization as a high-availability and disaster recovery technology as well, reducing the risks associated with application failure and data centre outages,” Aitken said.

According to a November IT spending survey from The Goldman Sachs Group Inc., 34 per cent of servers will be virtualized within the next 12 months among Fortune 1000 companies, double the current level of 15 per cent. In the Canadian market, Toronto-based IDC Canada has also forecast virtualization adoption to accelerate in 2009. The consultancy’s Virtualization Tracker indicates a 30 per cent increase in virtualization on new servers shipped in Canada over the last several quarters.

“For 2009, we’re calling for a slowdown in server shipments as virtualization growth continues both through increased adoption into already virtualized environments and organizations adopting it for the first time,” Tarun Bhasin, a server market analyst with IDC Canada, said.

But according to Scott Elliott, senior systems network specialist at Christie Digital Systems Inc. and leader of the Southwest Ontario VMware User Group, inexperienced IT shops will probably be extremely wary of taking the virtual plunge in 2009.

“If a company has virtualization in-house and are happy with the results, they may speed up their rollout on pieces they are familiar with,” Elliott said. “If a company doesn’t have virtualization in-house yet, I’m sure they would check, double-check, and even triple-check results of other customers and make sure of the expected cost savings before embracing it. And even then, they would slowly roll it out.”

Without the in-house skill and experience, he added, it’s hard to justify bringing in high-priced consultants to set up the technology. If they haven’t played with virtualization before, IT shops will take a long, hard look at it and see if they can get by without it for the time being.

“The IT manager has to think about his job too, and it’s very rare that management would want to stick (its) neck out in tough times,” Elliott said.

John Sloan, senior research analyst with London, Ont.-based Info-Tech Research Group, said that the trigger point for most companies, even virtualization newbies, will be the number of servers that they have reaching end-of-life.

“If they’re going to have to buy something, they may look at the potential of buying fewer services and starting small with virtualization,” he said.

One issue that could be a red flag for some IT shops, especially smaller companies that have never invested in a storage area network (SAN), is how they’re going to manage storage for those virtual servers.

“These companies will have to look at how they’re going to provision these machines, do they have to buy additional external storage and what that is going to mean for their overall investment,” Sloan said.

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Jim Love, Chief Content Officer, IT World Canada

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