Valovic on Virtualization

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Virtualization and the Economy

The conventional wisdom about the impact of the economy on virtualization is that companies will being looking to cut costs and therefore will turn to server virtualization because of an immediate and straighforward ROI hit. But not so fast, says analyst Rachel Chalmers of the 451 Group. In a recent report, Chalmers points out that a lot of the low hanging fruit has already been picked off, at least in terms of the Fortune 500. Going downstream to the SMB level, the ROI won't be quite as easy to realize.

Overall, however, analysts like Pund-It's Charles King believe that "sales of IT solutions which enhance the performance of existing tech assets ... will remain relatively brisk." He includes virtualization (presumably all forms) and data de-duplication in this category.

So what about other types of virtualization? Hosted desktop won't be a short term ROI play but could make life easier for IT departments in terms of security and maintenance and, over time, the long lifespan of thin clients (10+ years) coupled with major savings on desktop maintenance will be attractive. (Trouble is, companies don't always have the luxury of thinking long-term these days.)

Here's another interesting angle on the economics of hosted desktop. According to Bernard Golden, a CIO magazine survey found that 46 percent of companies will defer replacing desktop PCs in the next several years. Golden goes on to point out that both Vista and Windows 7 "require a significantly larger hardware footprint than XP does. Consequently, there's a collision course between the operating system of the future and the hardware of the present -- which presents an enormous opportunity for client virtualization." The clear implication for VDI is that if an existing desktop PC can’t easily run Vista or Windows 7, it becomes a great candidate to use as a rich client for a move to VDI.

What do you think about the economy's impact on virtualization's great forward momentum to date? Post here or send me an e-mail.

Posted by Tom Valovic on 01/11/2009 at 12:49 PM


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