Virtual Economics

IT spending seemed immune to cuts, until recently. Guess which segment is bucking the trend?

• By Doug Barney
• 01/01/2009

In the world of technology, stocks are dropping, companies like Sun are laying off thousands, and IT folks I talk to every day are putting off new gear -- some until 2010! That's bad for PC makers, horrible for traditional software shops and a total bust for highly paid consultants.

But one area seems resistant to economic calamity: virtualization.

Not all that long ago I went to VMworld, along with about 13,000 other virtualization fans. That's a heckuva lot of attendees during a time when so many major shows like COMDEX are dead and gone.

Thousands flew to Las Vegas for VMworld, paying top dollar for fancy hotels-because when done right, virtualization in all its forms saves massive amounts of money.

Just last month I spent an hour or so talking to Tarkan Maner, the CEO of Wyse Technology. Maner says business is booming for his thin-client hardware and software.

That's because instead of buying laptops or desktops at one or two grand a pop, IT can buy Wyse thin clients for a few hundred clams, give or take.

Here are ways IT can save money:

• Simplify the infrastructure of PCs, servers and storage
• Support fewer software packages
• Save on software licenses
• Buy less hardware and, when you must, cheaper hardware

Sense a pattern here? All these goals can be accomplished through virtualization.

Let's look at thin clients first. A well-executed thin-client infrastructure lets you know exactly what desktop applications are needed, so you can pay for these and no more. It should also require less management software and less admin time if done right. Finally, thin clients tend to use far fewer watts, so the electricity savings are impressive.

You probably know the cost benefits of server virtualization better than I. Hardware, management and power costs drop dramatically. And as long as you don't go crazy spitting out unneeded VMs, so do license fees. Pooling commodity storage and virtualizing networks and I/O also drops cash to your bottom line.

As a virtualization expert, the ball is in your court. Work up a plan that details the savings and the return from virtualizing more of your infrastructure. Be a bit conservative, over-deliver, and you'll be the hero of your shop in no time!

How can virtualization help your company through these tough times? Send your thoughts to [email protected].