CIOs should 'connect' virtualization to business

Virtualization technology should be elevated from one that's seen as a "technology enabler" to a "strategic business investment", says analyst.
Written by Victoria Ho, Contributor

Most CIOs do not consider spending on virtualization technology as a tactical business investment, according to an IDC study.

Avneesh Saxena, the research firm's Asia-Pacific group vice president for storage and software research, said a recent IDC study of decision makers in the region showed that 66.7 percent of respondents did not "view dollars spent on virtualization as in investment in business growth". The analyst was speaking at a briefing Thursday hosted by Hewlett-Packard.

According to the HP-commissioned study, 40 percent of CIOs across the Asia-Pacific region said they were unsure of the benefits of deploying virtualization--an issue that hampers the technology's adoption rate, Saxena said.

And where virtualization technology is implemented, he noted, the biggest oversight CIOs make is not "connecting" such deployments with business goals. "Two thirds of implementers relegate virtualization to the role of technology enabler," he said.

According to the study, 37 percent of respondents viewed virtualization as a tool to accelerate growth and 35 percent regarded the technology as a competitive advantage.

But rather than implement virtualization because of the hype around it, CIOs should focus on managing their mixed physical and virtual environments with an eye firmly on reducing operational costs through improving server efficiency.

Tony Parkinson, HP's Asia-Pacific and Japan vice president of enterprise storage and servers, said CIOs are often unaware that only 10 percent, on average, of their servers are being utilized. The failure to recognize this, Parkinson said, has resulted in IT departments continuing to procure equipment that drives up costs to support maintenance and expensive power requirements.

According to IDC, for every dollar spent on servers, an extra 50 cents goes to power cooling requirements. Maintenance consumes a greater cost, at $8 for every dollar spent on equipment.

Furthermore, with the cost of equipment and storage going down, this contributes to the problem of server sprawl because companies opt for the "easy way out" of buying more servers to resolve processing shortfalls, neglecting the extra costs of maintaining these systems down the road, Parkinson said.

Saxena added that the IDC study revealed 86 percent of CIOs have already embarked on virtualization projects, but did not specify the scale of such projects.

A statistic often quoted by vendors and analysts is that a mere 5 percent of servers are virtualized globally--a figure that has not changed from 2005, according to reports.

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