Virtualization benefits from recession

While a lot of domains in the tech sector are being hurt by the slowdown, some are succeeding because of cost cutting

Before I begin, let me tell you a little joke. A long time ago in a small village in some country far, far away, people suddenly started buying more and more contraceptives and nobody could explain why. Economists came out with many theories, but most of them were not very convincing. Finally, one person who lived in that village explained a train passed through the village early in the morning everyday, and as is usual with trains, blew its horn.

What has this got to do with contraceptives, you ask? Well, you see, the train arrived at 5 am, and 5 am, as we all know, is too early to get up and too late to go back to sleep I guess you are getting my drift?

Cutting costs

Similarly, many of us tend to assume that a recession is bad for everybody, but in fact, it is good for those areas that cater to cost cutting. And one area that is of interest to boring old enterprises is virtualisation. You and I may not like this, but CFOs and CIOs love virtualisation because it cuts costs and makes management simpleru2014if, that is, it is well implemented.

And while people have tried to make virtualisation work earlier, today, there is a desperate bid to make it succeed because companies are extremely keen on cutting costs. As a ballpark example, consider this if you have 1,000 square meters of a data centre running 10,000 physical servers, with virtualisation you can bring this down to 100 square meters and 1,000 physical servers, thereby saving on floor space and cooling costs, which will bring down opex tremendously.

And today, everybody wants to do this. A well-known IBM user group called SHARE has recently has released a study that says that, though several companies are slashing their IT budgets, adoption of virtualisation in enterprises is on the rise.

Success stories

According to a presentation titled 'Virtualisation and the future of the Datacenter' by Helene Armitage, VP of system software development and lab-based services, IBM, Volkswagen AG consolidated and virtualised 76 servers to 6 and thereby reduced complexity and total cost of ownership of global IT infrastructure. Another company, called AISO.net, saw a 60 per cent reduction in power and cooling costs through virtualisation-based data centre consolidation.

Stuff like usually this causes all the CxOs the CEO, the CFO and the CIOu2014to sit up and take notice. And CFOs and CEOs are putting their money where their mouth is. According to the SHARE survey, while the percentage of respondents' IT budgets dedicated to virtualisation currently stands at 29 per cent, nearly half of them predicted that the cash available for virtualisation would increase over the next 12 months.

But this doesn't mean that virtualisation is a silver bullet. In the survey, some 29 per cent of business managers were very familiar with the concept of virtualisation, while 41 per cent said they were somewhat familiar. And if the ones who are not very familiar with the concept bungle, then they will only be driving nails in their own coffins.

QUICK TAKE
>>While recession has hurt IT usage, virtualisation is going up
>>This is because this can help companies to cut costs
>>But if CIOs bungle, then they could put their enterprises in jeopardy