Gartner reported in October that “virtualization is still in its infancy,” noting that “only 16% of workloads are running in virtual machines today.” Meanwhile, IDC’s Worldwide Quarterly Server Virtualization Tracker found that “worldwide virtualization software revenue declined 18.7% year over year in 2Q09.”
What happened? Was it the economy? Was it obstacles like security and management? Was it the fact that vendors had been overhyping the space?
Actually, nothing much at all happened. Sure, the recession is slowing things down, but virtualization is still a bright spot in a bad economy, with adoption doubling almost every year. “When all is said and done, we expect adoption to increase by a factor of ten from 2008 to 2012,” said Thomas Bittman, an analyst with Gartner.
Meanwhile, that 18.7% dip that IDC reported still represents a $344 million virtualization market for the quarter, which isn’t too bad in the worst economy since the Great Depression.
A Shift in the Market
Even so, there are subtle shifts happening in the virtualization market. In recent years, virtualization has been limited to large enterprise, which skews the overall picture. Large enterprises start slowly, roll out pilots, and virtualize bit by bit, usually when contracts are up.
As virtualization spreads beyond the large enterprise, though, that process changes, with smaller companies doing it all at once. Now that every operating system except Mac OS X has built-in virtualization features, mid-sized organizations and even SMBs are getting into the virtualization game.
It’s Wi-Fi All Over Again
Consider the adoption rate of other once-new technologies. Remember when Wi-Fi was anything but enterprise class? Did that keep Wi-Fi out of the enterprise? No. Access points popped up anywhere IT pros wanted them.
Management didn’t know about them – and wouldn’t have known how to control them even if they did.
Virtualization may well take a similar path into SMBs.
“Virtualization is now a must-have feature,” said Tom Kemp, CEO of Centrify, a provider of identity and access management solutions. “Because it’s free, built into the operating system, system admins will just use it. This isn’t the ideal roll-out scenario, of course. Eventually, management and security will both be issues for organizations that follow this adoption path.”
To get a handle on the virtualization market, Centrify commissioned a study of adoption patterns. They found that adoption is accelerating, and that this is quickly becoming a heterogeneous market with most organizations having hypervisors from more than one vendor. Additionally, the lack of standardization in the market is creating security, management and compliance concerns.
(chart courtesy Gartner)
The Licensing Roadblock
According to Gartner, the majority of large enterprises are very interested in cloud services – by which most mean private clouds – as the next logical step beyond virtualization.
This, though, is where the enterprise and SMBs part company for now. SMBs are not terribly interested in cloud services, at least not their own. Call it SaaS and you’ll likely get a different response.
The main stumbling block isn’t cost or security or just the overall newness of moving to the cloud. No, it’s software licensing. Software licenses on a per-seat or per-CPU model just don’t translate to the cloud.
How, then, are all of these organizations offering cloud services? Are they just violating their licensing agreements?
“No, what they’re doing is entering into custom licensing agreements,” Bittman said. “Software vendors are negotiating each and every deal.”
That model is fine with a few large organizations doing it, but it certainly won’t work for broader adoption. Vendors will have to move to usage-based pricing, which many are still reluctant to do. Until they do, though, the applications made nimble and free through virtualization will be reigned back in by out-of-date licensing agreements.
Case Study: Camber Corporation Chooses Virtualization over Bloated IT
As military contractor Camber Corporation has learned, the decision to adopt virtualization or not is often not a choice but a necessity.
The company has been expanding in recent years, both through acquisitions and natural growth. What was formerly an 800-person company began on a growth path a few years ago that has nearly tripled headcount (they’re now at about 2,000 employees).
The company had 60 servers, each application-specific, and as it grew, more servers would be added, meaning that the IT staff would need to be doubled or tripled. Even with more people, the staff would still have to cope with never-ending sprawl and a slew of management headaches – unless they streamlined their infrastructure.
“We went from a huge data center, with plenty of overhead for power and cooling, along with expensive maintenance contracts, to a streamlined data center that is much easier to control, manage and secure,” said Wayne Blockel, CIO of Camber.
That’s right, Blockel said that this infrastructure is easier to secure. Security is considered one of virtualization’s main stumbling blocks, so this answer came as a surprise.
As a military contractor, Camber can’t take security lightly. While the vulnerability of the hypervisor remains a concern, Blockel argues that virtualization gives IT more control over security.
“If we had our existing infrastructure in a traditional server farm, we would have 150 discreet operating systems, 150 physical machines that would need failover capabilities, and 150 systems to patch and update,” he said. “Now, each system is easier to patch and maintain, and almost by default, IT has a real-time view of what is going on with the infrastructure.”
A side benefit has been that by decoupling applications from hardware, individual departments feel free to experiment. If they want to offer a new service, they fire up a virtual server and test it out. In the past, that process required purchasing requests, a long paper trail and then a waiting period of a month or longer for the hardware to be in place. Experimentation was time and cost prohibitive, and thus wasn’t done.
“It’s not just the experiments where this is beneficial,” Blockel said. “Applications are more thoroughly tested before they go into production because we now have the ability to test them without significant overhead.
“We can test applications, databases and delivery mechanisms well before anything actually goes out the door.”
The final benefit is one being considered by many other enterprises that have virtual environments: a shift to cloud services. Camber has 26 offices, so moving to private cloud services is a perfect fit, and the process is already underway.