A Win-Win-Win in the Virtualization Market

By John Hollinger
published: Tuesday, June 23 2009

Virtualization saves money.  At this point this is certainly not a state secret.  In fact, if your goal is to relatively quickly impact your spending on commodities (i.e. hardware and utilities), there is no better way to achieve this than to undertake an aggressive initiative to virtualize your data center.  However, if you are endeavoring to maximize your return on your IT investment, then looking at this problem in the context of a model helps.

One such model is Microsoft's Infrastructure Optimization Model (IOM).  In abbreviated form it perceives the IT organization as having four distinct phases:

(Infrastructure Optimization Model)

Clearly the goal of moving your organization along this path is to transform IT from a "maintenance shop," focused on trying to keep expenses down, to an integrated, agile IT environment focused on driving business growth. What is somewhat less clear is that one of the key drivers for this evolution is to engage initiatives that cause less and less of the IT budget to be required for "maintenance" and focus those dollars on finding ways for IT to help grow the business.  Standard virtualization fits into this scheme and is being used by many organizations to drive down a portion of their operational costs.  However, virtualization used in this manner is only able to impact a small portion of the operational cost of IT.

By many estimates, maintenance and support (the bane of IT's existence) accounts for 35% - 50% of the overall IT budget. This expense is largely in the form of people and is typically perceived as somewhat "invisible" to the user community. Thus this represents the equivalent of a set of ankle-weights slowing the pace at which IT can bring innovation to the organization; limiting the ability to impact business growth.

It seems certain that if these maintenance and support dollars could be substantively reduced and those monies repurposed to business growth that IT would be well down the path to achieving the Dynamic State as seen in the model above.  Is there a way that virtualization help achieve this?  With some collaboration between the customer, ISV community, and the virtualization software developer - there is.

In order to put this in context, let's review how maintenance dollars are typically apportioned in most IT organizations.  Most organizations look at maintenance and support through the lens of applications, data center computers (i.e. servers and mainframes), and desktops. For the purposes of this discussion we will focus on the first two of these only.  Applications and their server-based components are maintained in the following cycle:

(Internal IT maintenance cycle)

What is unseen in many corporate IT organizations is what happens within the ISV before delivery of the application to the customer.  This cycle looks as follows:

(Typical ISV development cycle)