Networking: Old hardware, new applications

May 30, 2006

The market for virtual servers -- software that lets computer users employ more than one operating system, whether it is Windows or Linux, on a single server -- is surging. Experts tell UPI's Networking that more than 45 percent of servers in corporate networks purchased in the coming year will be "virtualized," as IT departments seek to squeeze more applications and connectivity out of the same amount of hardware.

This is a major change in the way companies are organizing their IT infrastructure -- one that has been emerging in just the last two years.

"The dot-com boom became the dot-com bust," Clay Ryder, founder and president of The Segasa Group, a market-research firm based in the San Francisco bay area, told Networking in an interview last Friday. "Today, customers don't really see a difference from one operating system to the next. What they are buying are solutions."

According to another research firm, New York-based TheInfoPro Inc., nearly 60 percent of Fortune 500 companies are now in the process of "virtualizing" their servers, and another 30 percent are developing plans to do so. That means nearly all large companies are pushing the trend.

The market, consequently, for software to service this movement is big, and will be $15 billion by 2009, according to research from International Data Corp., the Framingham, Mass.-based research consultancy to the IT industry. Resellers who work with an array of vendors -- from Sun to IBM to EMC, like CDW -- are seeing significant calls from their customer base for the virtualization software, a spokesman told Networking.

"Virtualization has clearly moved front and center in the technology world," a spokesman for VMWare, a subsidiary of storage industry leader EMC Corp., told Networking. "Intel and AMD, the x86 hardware and operating system vendors, system management vendors and application software vendors are all supporting virtualization, and data centers are increasingly standardizing on virtual infrastructure as their default deployment vehicle."

Acquired by EMC, VMWare is one of the fastest-growing software developers in the world with revenues last year of $387 million and first-quarter revenues this year of $131 million. The company has 20,000 customers for its version of virtualization software, the spokesman said.

The software is saving some who use it thousands of dollars per server. At the New Zealand Automobile Association Inc., rather than replacing servers the IT department starting using two Hewlett-Packard servers connected to storage area networks (SANs) at each of the non-profit's locations. Using VMWare ESX server software, the organization was able to link NT 4.0 and Exchange 5.5 to MS Server 2003 and Exchange 2003.

"This opens up all kinds of possibilities for customers, including server consolidation, business continuity, hosted desktops and a raft of other solutions that let customers derive more power from their computing resources," the VMWare spokesman told Networking.

Even Microsoft Corp., based in Redmond, Wash., is pushing this technology trend, releasing major details at the recent WinHEC trade show to hardware developers on its own upcoming virtualization architecture. The so-called "Hypervisor" will be released 180 days after the release of the long-anticipated Windows Longhorn Server and is said to have more than four central processing units and 4 gigabytes of random access memory for virtual guests, as well as a virtual hardware architecture and full kernel and input/output optimization architecture.

Most interestingly, Microsoft will allow third parties to optimize their operating systems to run on top of the Windows Hypervisor, and, apparently, some commercial virtualization vendors have indicated an interest in licensing Microsoft's new technology.

"It is helping customers do more with less," the VMWare spokesman said of the virtualization trend.

Copyright 2006 by United Press International