Virtualization – what it means to business and business value??

In the previous blog I talked about the “Cloud Computing” and the likely scenario in 2020. Another interesting topic which is making a buzz in the networking world, especially in the data center world is “virtualization”.

Virtualization as the name indicates pertains to the technologies that provide an abstraction layer between the hardware and the software. It provides the advantage of running multiple operating systems in a single server or running a single operating system in multiple servers. Virtualization finds its roots from partitioning. Virtualization did not take off initially until VMware pioneered the virtualization technologies and planted the seeds for virtualization boom.

Let us see the business case for virtualization in the coming five to ten years. i.e. a business case scenario for 2015 or 2020. The key drivers for changes in the data center industry - virtualization in particular - could be the following.

Increasing capital expenditure on IT
Increasing awareness of environment issues and IT
Increasing demand in virtualized data center
Increasing complexity of the networks and their management
Realization of virtualization benefits
Increasing use of internet, web2.0 and applications

The framework:

Today’s data center, networks are plagued with complex architectures, designs, a number of physical devices, cables etc etc. Increasing use of these physical devices has multiple effects. The physical space available is limited. Increasing use of the servers, routers, PCs etc is increasing the energy utilization. According to Harvard scientist’s (Dr.Alex) research, a single search in Google results in 5-10g of CO2 emission and just browsing a site results in 20mg of CO2 for every second a person views it. This is in part because Google employs huge servers to generate results as fast as possible. As the world is becoming aware of the greenhouse gas issues and global warming and its effects on mother earth, various people, governments, organizations are taking steps to reduce the CO2 emission. Kyoto protocol is a step towards reducing the CO2 emission. This set apart, the growing need for bandwidth is making the ISPs to sweat out. As the internet usage is increasing - mainly bandwidth intensive applications such as video (Youtube etc) – the ISPs, data centers are craving for bandwidth efficient devices. Upgrading the ISPs core networks, data centers requires a huge capital investment. But larger data center means greater risk in managing the complex networks resulting in an increase in the operation and management costs of the data center.
But there are developments to counter these drivers of change. Virtualization has come to play a big role in reducing the data center cost. For example, Networkworld report says, by virtualizing the data centers, Cisco reduced the cable plant by 4800 cables, giving 50% more physical space for servers and increased the virtual machine capacity by four times. An IDC analysis says by moving to virtual infrastructure, organizations can reduce the IT costs. The statistics of this analysis gives a 35% of server costs per user savings for a simple virtualization implementation, a 52% of server costs per user savings per year for an advanced virtualization implementation.

So there are a host of advantages that virtualization offers.

But…the challenges…..

As in any technology, there are some limitations and disadvantages in virtualization. There are growing concerns about the security in server virtualization implementation. Similarly CIOs are wary in implementing virtualization for regulatory projects such as credit cards database management. Then there are issues of power and cooling because, by bringing virtualization, the CPU utilization has shot up resulting in more heat generation from these servers. Apart from these, there are issues related to technology itself such as increased usage of memory, CPU cycles etc.

How does the future look?

Keeping in mind about the benefits and the challenges of virtualization, lot of developments is going on in virtualization market. VMware, the leader in virtualization market is improving on some of the challenges that virtualization faces today. Even the chip vendors such as Intel, AMD are working to bring in new chip designs to cater to needs of virtualization. Other vendors such as Dell, HP, Citrix, IBM are also in the virtualization market. As cost saving is the biggest driver, we are seeing more and more organizations embracing the virtualization. The future looks bright for the virtualization technology and for the companies involved in virtualization. By 2015-20 as the technology matures, we might see huge data centers incorporating virtualization and also offering Cloud Computing technologies to the organizations. More and more organizations might move towards cloud and virtualization as they produce more business value out of the investment (ROI). Again, we might see some consolidations in the industry and some new entrants. The incumbents with their market leaderships might pose big barriers to the new entrants. But as usual differentiation would be the strategy for the new entrants to fight against the behemoths in the industry. We might see a good competition (might turn ugly also) by 2015-20 hoping that the end user would benefit from this.

I hope this discussion doesn’t end here. There are huge opportunities as well as challenges for virtualization which are not listed here. Nevertheless this information should provide some useful insights into the future of virtualization market. I think the question “Is Virtualization a good bet for CIOs?” is yet to be solved.

-Deepak

(Courtesy, NetworkWorld.com, CIO.com, IDC)