Server virtualisation remains a hot trend – and it's getting hotter. We believe that there will be more virtual machines deployed on servers during 2011 than in 2001 through 2009 combined. By next year, the penetration of server virtualisation in midsize companies with between 100 and 1,000 employees will exceed that of the Global 500.
At the same time, there are a number of misconceptions about server virtualisation that continue to be raised by our clients. Whether they relate to the trend itself, the market, virtualisation savings or virtualisation strategies, these mistaken beliefs can lead to poor investment and planning decisions, so we'd like to set the record straight.
Misconception 1: Server virtualisation is not as hot as it once was
As of year-end 2009, only 19 per cent of workloads had been virtualised. On the other hand, hundreds of thousands of organisations have started or are in the middle of virtualisation deployments. We believe the installed base as of year-end 2009 was about 10.8 million units, reaching 20 million by year-end 2010, and nearly 35 million by 2011. The overall penetration of the server market, in terms of workloads virtualised, will be close to 70 per cent by 2014. We believe that the impact of server virtualisation on the market is still underestimated, in terms of server hardware, virtualisation management software and overall data centre architectures.
Misconception 2: Server virtualisation is mainly for large organisations
Large organisations were the major early adopters of server virtualisation. Based on recent surveys, perhaps 30 per cent of midsize organisations had started to virtualise before 2009, but that number roughly doubled last year. Also, large organisations tend to deploy virtual machines as they upgrade or deploy new servers. Midsize organisations are more likely to virtualise many servers at once — with outside help and many smaller organisations go from unvirtualised to fully virtualised in one year. Because of this, midsize organisations have become a major new growth engine for server virtualisation.
Misconception 3: Server virtualisation saves money
There is no doubt that server virtualisation can potentially reduce capital, energy and data center space costs through consolidation and standardisation. While low-level virtual machine technologies can be inexpensive, virtualisation can increase complexity and requires new tools that aren't free. Server virtualisation on anything other than a small scale requires centralised storage, pushing most organisations to network-attached storage (NAS) or storage area network (SAN) solutions, which can be quite expensive. Only with an increased focus on standardisation and better automation can operational costs remain flat or decline.
Misconception 4: Server virtualisation is a commodity decision
Many organisations start a virtualisation project without realising the strategic ramifications of server virtualisation. They tend to think about cost cutting. While there's nothing wrong with saving money, strategically, virtualisation leads inexorably down a path toward agility, flexible sourcing and cloud computing. The technologies that are deployed to virtualise servers impact both infrastructure management tools and operational processes. Even as they start to virtualise, organisations should have a strategic plan in place for external infrastructure services in the long term.
Misconception 5: Virtualisation is an IT thing
Virtualisation affects the IT team immediately, requiring them to let go of implementation details, allowing IT to share servers between different workloads. Perhaps the most important change is the ability to react to IT customer demand much faster. Virtualisation makes it possible to separate IT hardware acquisition from business application deployment such that, when IT customers ask for server or storage capacity, rather than two months, a virtual server can be delivered in two days — or 20 minutes. This speed is a fundamental change in service delivery to the business. Gartner clients have reported that organisations that are heavily virtualised tend to see a doubling in demand from the business. It really does seem to be a case of, if you deliver it faster, the business will ask for more.
Misconception 6: VMware Has little competition in the server virtualisation market
While VMware still dominates the market with at least 85 per cent of the installed virtual machines, the trend is shifting. A significant number of the virtual machines being deployed during 2010 are based on Microsoft's Hyper-V, especially in smaller companies new to virtualisation. 5 per cent of the virtual machines being deployed in 2010 use Citrix XenServer. The market is growing, but the competition has also been growing — especially for the midsize market, which has been increasing virtualisation efforts significantly in the past two years. There is already heavy price competition at the lower end of the market which will eventually creep up into the enterprise, making price negotiations and discounting more likely.
Thomas Bittmann will present Gartner's Virtualisation Scenario at the Gartner Data Center & IT Operations Summit 2010, 22-23 November at the Park Plaza Westminster Bridge hotel in London.