HP: New Strategies for Virtualization, Consolidation

Research commissioned from IDC suggests that solution providers emphasizing cost savings of server consolidation and virtualization solutions should start shifting the focus toward business problem solving.

June 7, 2006

3 Min Read
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Solution providers emphasizing cost savings of server consolidation and virtualization solutions should start shifting the focus toward business problem solving.

That's the word from Hewlett-Packard, which commissioned research from IDC to demonstrate that businesses are starting to look at new server technologies as more than a way to save a few bucks in the data center. They are looking at server consolidation and virtualization as strategies to improve business processes and quickly provision new services for customers, according to HP executives.

"If [solution providers] are having a cost-cutting dialog they are missing an opportunity to add new products and high-margin services in the mix," Steve Fink, director of IT Consolidation Solutions at Hewlett-Packard, Palo Alto, Calif.

He pointed to University of Utah, which used virtualization to consolidate workloads to save the IT group from purchasing 80 additional servers in the first phase of the project. The money saved on servers is now redirected to purchase storage that will be used for an electronics record project at the 500-bed facility, said Bryan Peterson, principal systems engineer for the data resource center at the University of Utah, Salt Lake City. Though money is being saved in aggregate, Peterson noted that the success of the project is being measured not by cost reduction but by patient satisfaction via regular surveys.

Peterson said University of Utah worked on the project with Avnet Enterprise Solutions, the former division of distributor Avnet that merged with Phoenix-based Calence late last year.Fink, who once worked for a Compaq VAR, said customers are starting to transition from a "cost imperative" to a "business imperative" when it comes to managing an IT infrastructure. He said conversations over the past few years have centered on saving costs in the data center, but this year, companies are eyeing growth again and are looking at ways IT can help them reach business objectives.

In a recent survey of IT executives, for example, IDC reported that 30.3 percent pointed to increased customer satisfaction as a key business goal, just slightly under reducing costs, which was chosen by 30.8 percent of respondents.

Additionally, IDC said respondents rated improving use of IT staff time, reduction in manually intensive IT tasks and better service levels as more important than reducing costs and reducing IT staff head count. The report was based on 204 responses.

Chad Williams, manager of public sector at Matrix Integration, a Jasper, Ind.-based systems integrator, said many solution providers are talking up the cost benefits of consolidating 50 servers and most businesses are open to hearing about it. But, he believes, only a few solution providers and customers currently are thinking about improved employee service derived from managing fewer servers through a virtualization and consolidation implementation.

With consolidated servers, customers have fewer pieces of equipment to monitor and upgrade, so it is easier to manage the system, and time saved can be used by IT to focus on better employee service. "So from the customer's perspective it is going to help maintain the most current, best performing equipment, and it is much, much easier to support and maintain," he said.As part of its study of 420 senior IT managers and directors in May and June, IDC said 22 percent of the respondents reported maintaining virtualized servers and 45 percent of all planned server deployments were seen has potential virtualization candidates.

IDC also noted that once adopted, virtual machines are being quickly applied to key enterprise applications. More than 50 percent of all virtual machines currently are running production level application, the research firm reported.

Additionally, technologies used for consolidation are growing faster than the overall market, according to IDC.

IDC said the compound annual growth rate (CAGR) of servers for consolidation is 8.6 percent while the overall IT market server CAGR growth is 2.7 percent. Moreover, Matthew Eastwood, IDC's program vice president of global enterprise services, said four-way x86 servers in the first quarter grew 20 percent while the overall x86 server market grew 6 percent.

The storage consolidation CAGR is 7.7 percent compared to an overall market CAGR of 3.1 percent.0

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