IT decision makers find little business value in virtualization

Despite a readiness to adopt virtualization, many IT leaders don’t believe the technology offers organizations any crucial business advantages.

Only a third of the 150 IT decision makers polled by a recent Hewlett-Packard (HP)-sponsored survey view virtualization as a business tool.

The survey was conducted by Penn, Schoen, Berland & Associates, a Washington, DC-based market research firm.

Respondents included 150 directors, CIOs, presidents and other senior  technology executives from large and mid-sized companies in North America, Europe, Latin America, and the Asia-Pacific region.

The survey uncovered some interesting perceptions about virtualization.  

  • Two-thirds of the respondents ascribe to virtualization the role of “technology enabler.”
  • While around 86 per cent of companies polled have implemented virtualization projects, these firms expect to virtualize just 25 per cent of their organizations by 2010.

Many executives said anticipated benefits from virtualization – such as managing costs, more efficient use of tech resources and ease of IT management – are (in the words of one respondent), “all about IT, not business.”

Virtualization technology separates software from the underlying hardware, allowing applications to be deployed in more flexible ways.

The technology sometimes enables multiple operating systems to run on one physical server, or allows application workloads to be shifted between computers more easily to maximize and improve hardware use.

This reduces of the number of physical servers that need to be deployed, and also cuts down associated power, cooling, maintenance and management costs.

The financial and operational benefits of virtualization tend to be concentrated in the IT departments, many respondents said.

More than 37 per cent of those polled are “least likely” to associate virtualization with speeding up their company’s growth. Another 35 per cent did not believe virtualization boosted their organization’s competitive advantage.

“We only [view] virtualization as a technology…We utilize this technology to integrate IT resources and make management more convenient. It is all about IT not business,” said a Canadian respondent.

This attitude, says a Canadian analyst, runs the risk of derailing or slowing down virtualization initiatives.

A failure to effectively communicate to business executives the line of business (LOB) benefits of virtualization could be behind the prevailing perceptions uncovered by the study, according to James Bremner, director of research for infrastructure hardware at analyst firm IDC Canada in Toronto.

“IT departments must communicate the positive results of virtualization to business departments in a language that business executives can understand,” Bremner said.

He said IT managers and administrators can quickly grasp the advantages of being able to collapse multiple physical servers into a single unit by using virtual machines. However the benefits of avoiding server sprawl might be lost on some people in the business department, the IDC analyst explained.

Sometimes, he said, the type of virtualization initiative, and how deployment is handled and explained to stakeholders influences whether benefits are readily recognized.

For example, identifying the business payback on a storage virtualization project might be harder than doing the same for a desktop virtualization initiative.

As long as they get access to information when and where they want it, many users do not normally care whether their data is stored in virtual or physical servers, said Bremner.

“But when a business executive flies to one of his company’s out-of-town locations and finds he’s able to access files and applications from the head office because of a virtual desktop system, he immediately realizes the advantages.”

How the benefits of the technology are articulated to business leaders is also vital, the Canadian analyst said.

“If you can tell business executives they’ll be spending only $2,500 per virtual server as opposed to $10,000 per physical server, that’s a LOB benefit they can understand.”

The survey confirms feedback from many HP customers but it’s time for many C-level executives to “rethink” their position that virtualization only serves IT departments, said Steve Shaw, Business Critical Servers, business development manager for HP Canada.

He said IT’s efforts to find the right words to communicate with business has been on for year, but has also been hampered by the view that the technology is largely a “point solution.”  

Many organizations “have the impression that virtual tools are there only to reduce server footprint and help manage hardware and software,” Shaw said.

This mindset lends virtualization an IT-centric character, according to Chris Christianopoulos, Blade Systems department manager at HP Canada.

“Virtualization is not merely a server consolidation tool.”  

He said HP’s strategy is to help companies move virtualization from siloed deployment to horizontal deployment across the enterprise.

The company recently released a new of thin clients and new Blade Servers and virtualization software enhancements.

Christianopoulos said HP’s new Network Node and Asset Manager tool is an example of the company’s strategy to shake off virtualization’s point tool image.

According to HP, the Network Node enables administrators to not only manage and control virtual machines but physical machines as well, and helps users better plan and monitor network capacity.

The tool, says HP, enables better provisioning of virtual machines used by various departments in an organization.

Asset Manager handles virtual machine asset inventory and licenses and makes it easier for users to pay for only the licenses they need. Savings realized in this area can translate to additional resources for other departments.

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