Executive Viewpoint: Tim Lucas, Surgient

By Tim Lucas
published: Tuesday, December 30 2008

Economic Impact

Although 2009 appears to be a challenging year for the global economy, IT spending will not decline as significantly as some predict, although IT buyers will be more cautious with how money is spent. Many buyers, forced to take a hard look at the status quo, will be open to technologies like virtualization to improve ROI and operating costs. Virtualization technology providers have a promising future even in a difficult IT spending environment. The virtualization vendors that are stable and have adequate capital can take the opportunity to maintain or grow their market positions by listening to customer needs and requests. These select companies will continue to add value for both departmental or business unit buyers (typically pre-production environments) and enterprise-wide IT operations buyers (production environments). The virtualization companies that will have trouble are those classified as, "Me Too," that are new to the market or not yet profitable.

Continued Virtualization Adoption

Virtualization technologies will see greater adoption in both pre-production and production environments as management tools, improved functionality and the need for cost savings drive adoption. One exciting thing about the increasing adoption of virtualization technology is how rapidly the technology will advance in the next 12 months. Early adopters focusing on server consolidation and entry level use cases will give way to heavy loads and production data center use cases.  Scalability, manageability and low manual involvement will be more important as this adoption occurs.  Additionally, be prepared for robust ecosystems to emerge as systems management vendors, VAR's and systems integrators enhance their offerings by partnering with the most interesting virtualization companies. IT departments and personnel will also gain significant expertise in deploying and managing combined virtual and physical environments.

Expanding Use Cases

The use of virtualization management technologies will continue to grow at a significant pace although IT budgets are tightening. Companies, like Surgient, with a mature self-service management platform for both virtual and physical environments will be able to help companies maximize the benefit of their IT spend. Buyers are seeking ways to do more with the teams and hardware they have today. If properly deployed and managed, virtualization provides many ways to accomplish that objective.  For those companies desiring to configure their own internal enterprise clouds (i.e. private clouds), the virtual and physical management capability available today can provide strong ROI and tremendous operating efficiency. However, if capital costs are the buyer's bigger concern, Software-as-a-Service and External Cloud Computing offerings using virtualization as an advantage will grow rapidly in 2009 to meet that market demand.

Battles of the Software Giants

Microsoft and others will gain hypervisor market share on VMware. Expect the hypervisor to quickly become a commodity while scalable management tools and solutions for the enterprise become more important and valuable. Large IT management vendors will take the opportunity provided by a challenging economic environment and the expanding virtualization market to acquire growing virtualization companies to bolster their product portfolios.

Conclusion

With a compelling return on investment, multiple ways to acquire and use virtualization technology, environmental benefits from "Green" initiatives using virtualization, and rapidly advancing technology, I believe 2009 will be a good year for virtualization companies and the virtualization market as a whole. Of course, time will tell.

Surgient

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