Virtualization changes the economics of IT

To most business managers the IT function is a cost center to be minimized. Gartner Data Center conference attendees in December, reportedly, overflowed a session on reducing data center costs. An audience poll at the session, however, showed that about 20% of the audience had no IT cost accounting in place at all, and over half the attendees were basically flying blind on their IT budgets. They had, in effect, no way to control IT costs.

With personnel making up about 38% of IT costs the surest way to cut IT expenses is to cut people, Gartner noted. Another suggestion: buy cheaper IT hardware.

Inna Kuznetsova, Vice President, IBM Systems Software, in a recent analyst briefing, suggests there is a different way to change the economics of IT. The key: virtualization. Even basic virtualization using x86-based servers can deliver 8:1 server consolidation, which can save $600 per server in energy costs alone. Virtualizing on IBM’s eX5 x86-based servers can get you 78% more virtual machines for the same license cost, the company reports.

The rapid digital transformation of the global economy is putting IT infrastructures at companies everywhere under great pressure.  From 2007 to this year, digital data is projected to grow by a factor of 10. Compounding that challenge is the growth of unstructured data, which will make up 80% of the digital data growth and is one factor fueling interest in the advanced analytics, which is needed to make sense of that kind of data.

The scale of this digital transformation is astounding.  Six TB of information is exchanged over the Internet every second! The number of devices connected to the Internet by the end of this year will reach 1012. Driving this is the emergence of the Internet of Things, which BottomlineIT previously covered here.

Certainly shrinking the IT technology footprint through consolidation and reducing IT staff remain key to lowering costs, but technology virtualization, noted Kuznetsova, is the best way to get there. By 2013, she reports that 69% of all server workloads will be virtualized.

Kuznetsova sees a four-step journey to new, improved IT economics through virtualization:

  1. Start with server virtualization but extend it to storage and networks, which also can be virtualized and consolidated. Through IT resource virtualization organizations can boost efficiency and increase the utilization of IT, which boosts ROI.
  2. Manage workloads to further improve staff productivity or reduce staff. This will require integrated systems management tools that enable you to increase server, storage, and network resource-to-staff ratios.  Where it took one storage admin to manage 10 TB of storage, that admin could now handle 100 TB or more through a virtualized IT infrastructure.
  3. Deploy automation to achieve consistent and repeatable processes.  This not only further reduces staffing requirements but enables IT to consistently meet business service levels.
  4. Optimize IT delivery to enable business agility. Ideally this will take the form of user self-provisioning.  Self-provisioning is feasible due to the flexibility of virtualized IT resources, which are not constrained by physical barriers or location. A business manager, for example, can use easy templates to self-provision a new server in minutes to support a new business initiative.

Of course, IBM offers tools, like IBM Systems Director or Tivoli, to assist at every step in this virtualization journey. Other vendors are heading there too, including HP, EMC, Oracle/Sun, and others.

Virtualization lies at the core of cloud computing. A progression through Kuznetsova’s virtualization-driven steps invariably leads you to the cloud. At that point you decide how much cloud is right for your organization.



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