Virtually a business issue

The virtualisation – or consolidation – of technology assets is proving to be one of the most divisive issues in the IT industry. But what does it mean to ordinary businesses of Ireland?

The term ‘virtualisation’ sounds like a word out of a Star Trek fan’s phrasebook.

The term is an old one, in use since the Sixties, to describe combining or consolidating computer resources at different locations in order to boost performance and cut costs across an organisation.

In practical terms, it means that instead of having several servers in your business – each one managing email, web, file and print, accounts and so on – you can create ‘virtual machines’ for each of these roles on just one or two servers. Result: reduced costs and environmental impact.

It is only in the past five years that the industry has truly embraced the concept, creating software tools that allow business to create these virtual machines.

But the very use of the term ‘virtualisation’ is a prime example of how the technology industry continually manages to make a sow’s ear of an obvious, potential silk purse.

If the IT industry’s well-paid marketing people used the terms ‘consolidation’ or ‘reduction’ of IT resources then accountants and managing directors from all over would be queuing up.

As usual the industry sows confusion and gets ready for a long, hard sell.

The practical advantages of pursuing virtualisation can mean different things depending on who you talk to.

“It certainly can lead to cost savings,” explains David Laird, managing director of IT services firm Datapac. “Less servers means lower maintenance, which in turn means a smaller IT department or reduced spend on outsourcing.

“Virtualisation will matter a lot to the mid-sized SME in Ireland in the years ahead. Firms will reach a point where they have amassed a number of servers. It will make sense to reduce the number of servers to cut spending and gain efficiencies.”

Up until now every time a business wanted to add a new function or host a mission-critical software application it would have to buy a new server to host it, explains Richard Moore, business manager for servers at Microsoft.

“With virtualisation you use software to take one single server or a couple of servers and use that software to create many ‘virtual machines’ to better manage resources.

“Instead of having several servers to run your business on, you would need only one or two and can manage them more easily,” says Moore. “Servers are expensive to run, hard to keep cool and are hard on electricity, so virtualisation has an environmental impact.”

A study of 250 IT executives of small, medium and large firms across eight industry verticals in Ireland found that one third of them plan to pursue virtualisation in 2007.

“Some 29pc of IT buyers understand that server consolidation will result in cost savings in terms of power, cooling and storage for physical software, costs that have recently been rising in the Irish marketplace,” explains Neil Brennan, an analyst with iReach.

“Furthermore the centralisation of business applications will result in remote management and therefore staff can save time and focus on value-added offerings.”

Brennan says 21pc of those interviewed also recognised that virtualisation will result in easier business continuity/disaster recovery migration as well as flexibility.

“People are starting to realise that virtualisation can duplicate mission-critical servers and therefore a reduction in investment in physical duplicates of their hardware,” Brennan explains.

Not everyone is for virtualisation. A global study of 800 IT managers by Computer Associates found that 44pc were unable to declare their deployment a success so far.

Industry analyst Gartner warned that without implementing best practices for security, firms that rush to implement virtualisation strategies to reduce costs may actually end up increasing costs.

Because of the rush to apply the technology, many security issues get overlooked or best practices not applied, and as a result up to 60pc of virtual machines will be less secure than their physical counterparts.

“It will take several years for the tools and vendors to evolve as well as organisations to mature their processes and staff skills,” says Neil McDonald, vice-president and Gartner fellow. “Knowledge of the security risks and the costs to address them must be factored into the cost-benefit discussion of virtualisation.”

But the advantages outweigh the doubts, says Lee Bonham, worldwide leader of server strategy at IT giant HP. “When businesses invest in IT the idea is to smooth out processes. Unfortunately, over time data builds up and this can end up causing difficulties.

“Traditionally businesses have chosen one server for accounting applications and another for web or email and then have added data storage to that. But the result has been vast silos of information.Today, people want to move on and streamline this infrastructure.

“Organisations are struggling to manage complex IT infrastructures and do things quickly. To resolve this often means a lot of investment in time, people and effort. Thankfully, technology has moved on.

Businesses have the option to standardise, simplify and automate their IT infrastructure.

“This leads to smaller IT departments and reduced costs but better control overall,” Bonham adds.

Bonham’s colleague James Henry, head of blade servers for HP in Ireland, agrees: “Virtualisation, or the trend to handle many tasks on a reduced number of servers, will become mainstream in Irish business. Companies want to do more, but pay less.

“They want to reduce the silos of information, pool all of that into one resource they can easily control,” Henry says.

In the months and years ahead the true judges of whether virtualisation will be a success or not will be the managing directors of Irish businesses who will vote with their feet and their wallets to reduce their costly IT footprint.

© Silicon Republic Ltd 2007

All content copyright 2007, Silicon Republic Ltd — all rights reserved

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- By John Kennedy