IT Strategy: A well-planned virtual server strategy can help cut costs

It is a rare thing indeed when technology lives up to its own hype. In many cases, finance directors could be forgiven for thinking that the actual value of any underlying technology is often in inverse proportion to the marketing budget allocated to it: after all, if something needs to be hyped to the skies, maybe the vendor doth protest too much? But every now and again we see an IT breakthrough that delivers on its promises, virtualisation being one such example.

Virtualisation may be the flavour of the moment, but it has been around for about 40 years. It centres on the provision of a virtual machine used to run software in a virtual environment. This may not sound like a big deal, but the clever bit comes from the fact that this virtual machine effectively acts as a layer isolating the software from the hardware, while allowing it to execute as if it were running directly on the physical hardware. This means companies can run multiple applications and operating systems discretely in ‘virtual’ partitions on one physical server.

There are multiple benefits from embracing this technology, the most obvious and compelling of which is a potentially jaw-dropping reduction in data centre costs. By opting for a programme of server consolidation (where several operating systems are run on virtual partitions on one physical server), you can maximise the value of your hardware investment.

Doing this can save money. Estimates vary, but it is widely agreed that most traditional non-virtualised corporate servers are running at somewhere between just 10% and 20% of their flat-out capacity. So if, through virtualisation, a company increases its server usage to somewhere near full capacity, it could theoretically get rid of 80% of its servers.

For FDs, the business case for virtualisation is refreshingly clear. You buy fewer physical servers, but the computing muscle from each increases dramatically. This can deliver a commensurately large reduction in power use and support costs as the number of physical servers that need to be maintained is slashed. In these increasingly environmentally conscious times, as companies prepare for carbon taxation, virtualisation is a win-win situation: companies slash their energy bills and carbon footprint, but do not sacrifice computing power.

Micro chip giant Intel reported that, by accelerating the refresh of its servers and rolling out a virtualisation programme, it was able to shelve plans to build an extra data centre that would have cost around $53m. It estimates that this move has brought about $19m in savings to date, but it expects the saving to rise to $250m over the next eight years.

And the benefits of this technology are not just reduced data centre server costs. They include more efficient software back-up and disaster recovery and improved hosting of legacy applications, for example, ones that need to run on older operating systems.

And the list goes on: cheaper test and development programmes as well as improved business continuity come with it, as the inherent flexibility of virtualised equipment means companies are able to reduce both scheduled and unscheduled downtime.

In physical terms, server consolidation can also free up valuable office space that could be reallocated to other parts of the business, rented, or even sold to generate income.

On the face of it, this may all sound too good to be true. And it is true that some companies have come unstuck by jumping into the virtualisation pool with both feet before conducting a wide-ranging review of not just their technology, but also their business needs.

Quocirca, the IT research provider, warns that the devil is in the detail when it comes to migrating to a virtualised environment. The first thing it advises is not to touch the technology before you examine business process and rationalise applications. This evaluation should lead to the development of an IT maturity framework that aligns technology to business objectives.

Ultimately, companies should be aiming to migrate to a common virtualised platform; as they refresh servers they roll out server virtualisation software on the new boxes.

Then they need to think carefully about what applications they want to virtualise as some will perform better than others – databases, for example often work better in traditional environments.

Other issues that need to be considered include software licensing, which is often priced according to the capacity of a server. So moving an application from a two-processor box to an eight-processor one will cause licensing costs to increase for many applications.

Equally, physical factors should not be overlooked: if the floor area of a data centre is reduced by as much as 80%, what will happen to the rest of the space? However, for most, these can be addressed relatively simply by proper project planning, and those that look into it will find there’s nothing virtual about the potential savings to be had.

Robert Jaques is a leading commentator on technology issues