How Far can Virtualization Work?

You're knee-deep in virtualization, and you love the ROI that you've seen so far. But you're also grappling with tough technical and political challenges posed by today's hottest technology, according to CIO's first survey on virtualization. The top challenges? First, figuring out just how far you can push your physical servers by piling on more and more virtual machines (VMs) without slowing down application service levels, and next, getting experts from across IT silos to plan and manage the virtualized environment together. "Nobody likes change, even when there is often a better way of doing things," says Stephen Elliot, a research manager with IDC (a sister company to CIO's publisher). "It takes work and a mindset to reinvent IT and ourselves." The good news is that the payback on virtualization really pops. Server virtualization, in particular, is spreading a lot of love. But so far, happiness seems
to be is harder to come by on the desktop. Here's what nearly 300 CIOs who responded to the survey said about their experiences with the virtualization mega-trend. They also share advice to help you make the most of your virtualization efforts. (Some numbers in the story and on the graphs may not add up to 100 percent because of rounding).

Masters of Virtual Disaster Recovery

While many enterprises started their virtualization efforts with test and development servers, today's pioneers are virtualizing desktop PCs, running them from a VM on a server in the back room or running VMs on top of a guest operating system on the local machine. Eighty-five percent of CIOs are using virtualization for servers or the datacenter, 37 percent for storage, 34 percent for desktops (CIOs chose all that applied) In addition to the obvious cost-cutting benefits, a desire for better disaster recovery plans drives many CIOs to adopt virtualized servers (63 percent). IT leaders like Vincent Biddlecombe, CTO of logistics provider Transplace, use VMs to copy their production servers to disaster recovery facilities. As for flexibility and speed, Biddlecombe can provision a new server in 30 minutes instead of a week.

When a Transplace business executive needs a new customer demonstration environment, IT can do in half an hour. Other reasons to virtualize include: cost cutting (81 percent); provisioning more quickly (55 percent); offering more flexibility (53 percent) and providing competitive advantage (13 percent).

Now, Play Nicely

Technical woes rank higher - to be expected when CIOs deploy a new technology such as virtualization. However, the politics pain many of you. Forty-two percent of CIOs say they find political and organizational challenges hard to deal with compared to technical challenges (58 percent). Remember, virtualization not only asks people to cede some control over their physical server kingdoms, but also asks IT experts from different realms to work more closely together. "Virtualization success depends on tight cooperation between server, storage, network and security teams," says Burton Group senior analyst Chris Wolf. "Getting divisions that operate as independent silos to work together presents a very difficult challenge."

Strong executive support, says Wolf, is crucial. And efficiency won't save IT from a big black eye if you've put too many VMs on one physical server and key business apps run too slowly. CIOs understand this danger full well: nearly two-thirds of you call balancing server workloads or maintaining application service levels one of your three biggest challenges to success. But those nasty political issues loom large, as does the difficulty of measuring ROI on your efforts.

Another problem is that although almost half of you are shelling out for new tools to ensure that application service levels stay strong, you're not paying enough mind to integrating the teams that run your virtual environments. Chris Wolf, senior analyst with Burton Group, says it's a problem that so few IT groups have created 'center of excellence' teams that bring together experts from across the IT silos. "Some organizations still have the misconception that server virtualization is a server team issue, he says, when in fact server virtualization relies heavily on network and storage integration. Experience helps. "Organizations that have been running virtualization in production for one or more years understand the need for a center of excellence," says Wolf. But where are CIOs getting that experience from?

Consultants out, Please

Virtualization expertise represents a precious commodity today: most CIOs struggle to find enough of it. But you're not using consultants as widely as you did with the last wave of technology change - the ERP makeovers and CRM implementations. In fact, 73 percent of CIOs say they hire or develop in-house talent, compared to 23 percent who hire consultants. The same trend is visible among CIOs who are still looking for virtualization gurus with 17 percent planning to hire or develop in-house talent and 8 percent planning to hire consultants. (Respondents could choose more than one option) But why? "One CIO recently told me that he loves virtualization because 'It just works,'" says IDC's Elliot. That means less work for consultants. But it's hard to learn as you go with virtualization, adds Burton Group senior analyst Chris Wolf: a consultant can help you avoid blunders like security mistakes, he says.

Taking Desktop Virtualization Slowly

There are almost as many of you who have virtualized desktops or plan to have them within a year as there are those who have no intention of deploying this technology. Why is desktop virtualization such a polarizing idea? Desktop virtualization proves complex to optimize, analysts say, and planning for it requires more time. "These technologies are not a one size fits all. It takes time to figure out your users' needs and plan the implementation," says Forrester Research Senior Analyst Natalie Lambert. "I don't think CIOs are afraid of user backlash. One of the benefits to hosted desktop virtualization is it looks and feels just like a desktop computer. That's in IT's favor."

It's the Time and Money, Honey

It still takes too much money and time to manage desktop PCs, so it's no surprise that cutting IT administrative and support costs tops the reasons for choosing virtual desktops. Long term, security advantages will also prove important, analysts say, even though they're not top of mind right now. "Companies that build their business case around security and manageability are most advanced in their adoption of desktop virtualization," says Forrester Research Senior Analyst Natalie Lambert. Still think desktop virtualization is an idea you can dismiss outright? Citrix made a Rs 2,000 crore bet in 2007 that you're wrong, when it purchased XenSource to marry Citrix's experience in thin clients and Xen's experience in virtualization.

Happy Days Are Here Again

Few ROI calculations please 85 percent of CIOs. The ROI on server virtualization does, even though you're struggling to measure it precisely. Today, virtualization helps many CIOs reduce costs on a massive scale while improving flexibility to the business. That's been the experience of Credit Suisse CIO Tom Sanzone. CIOs in enterprises large and small tell the same story: it is easy to wow the business side with the returns. No wonder you're smiling.

Desktop Payback Longer to Measure

Sixty percent of you are pleased with the payback on virtual desktops, but a notable 27 percent say you're just not sure. Perhaps that's not surprising, as Forrester Senior Research Analyst Natalie Lambert notes, given that desktop virtualization is more complex to optimize than server or storage virtualization. Also, analysts say, calculating the ROI of virtual desktops accurately depends on having good figures on pre-virtualization PC costs. Meanwhile, desktop virtualization is also the newest effort of the three at most enterprises, which means it may be too early to measure returns accurately.