Topping Hollywood: Software's Frenzied Year: Page 4

Posted December 17, 2007

Larry Barrett

(Page 4 of 4)

Virtualization frenzy

Unlike SOA, virtualization software stepped into the limelight during 2007 to help companies address a real and pressing need: finding new ways to cut datacenter costs and reduce energy consumption.

VMware, which enjoyed a fantastic initial public offering in August, stands as the clear industry leader in developing software that allows IT managers to cram multiple computing environments onto one machine. By allowing one physical server to perform the function of two or more servers, more applications and operating systems can be hosted and managed in the datacenter.

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In May, Gartner reported more than 500,000 of these virtual machines were already online and it predicts that figure to grow to more than 3 million machines by 2009.

In its first quarter as a publicly held company, VMware posted a profit of $64.7 million, or 18 cents a share, on sales of $358 million. The company's success has not gone unnoticed, however. Enterprise software vendors such as Microsoft, IBM and Oracle are aiming to cash in on the virtualization craze, joining established players Virtual Iron and XenSource, which Citrix Systems acquired acquired in August for $500 million.

Yet again, there's a flip side to the technology. When too many virtual machines are created too quickly -- which today can often be done with a single click of a button -- it can create massive server sprawls with very little organization. And all these virtual machines need to be configured, patched regularly and secured.

Companies looking for a solution to the new wave of problems created by incorporating both physical and virtual servers really only have two choices.

They can hire a services provider like SunGard or IBM to host and manage snapshots of their server environment and provide additional capacity when needed, or they can do it themselves with some help from another software vendor.

"The more you put in one basket, the more things that can go wrong with that basket," said Don Norbeck, director of product development at SunGard. "Everyone wants to lessen hardware and reduce power consumption and space. But people need to take a step back and assess their environments and infrastructures before they start their virtualization projects."

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