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WHITE PAPERBusiness Value of Virtualization: Realizing the Benefits of Integrated Solutions
Sponsored by: HPAl Gillen Tim Grieser Randy PerryJuly 2008
EXECUTIVE SUMMARY
The use of static x86 server configurations is quickly becoming an outdated conceptwith the introduction of modern solutions based on blade architectures, which canoffer both intelligent configuration and management and the ability to performphysical-to-virtual migration to promote uptime and efficient resource usage.When combined with the quickly maturing x86 hypervisor technologies available froma variety of solution providers, the synergy of blade architectures and virtualizationoffers customers the ability to dramatically increase utilization of their server investments, boost uptime, provide a more resilient and available infrastructure, androll out new infrastructure and services more quickly.But equally important, these same technologies can also lower costs both directly,through an immediate reduction in power and cooling costs, and indirectly (but notwith a lesser impact), through a reduction in IT administrative costs associated withserver hardware and the layers of infrastructure software management.IDC analysis of the potential to lower IT costs by moving to a virtualized infrastructurefinds that the savings can be significant:
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Adopting a simple virtualized infrastructure can result in a reduction of up to 35%of total annual server costs per user compared with an unvirtualized static x86server configuration (see the Appendix for included cost items). Described in thisIDC White Paper as "basic virtualization," this starting point of virtualization refersto basic x86 server consolidation using virtualization software. It is commonlyapplied to test and development environments, along with at least someproduction use.
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Our research finds that the use of more advanced virtualization technology, alongwith increasingly sophisticated systems management tools that manage both theguest environments and the virtualization engines themselves, can further extendthe benefits of virtualization significantly.
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An optimally managed or "advanced virtualization" infrastructure, described as aninfrastructure that includes penetration of virtualized servers of more than 25%,storage virtualization, and the use of systems management tools, can deliver atotal reduction of up to 52% per user per year.
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2 #213430 ©2008 IDC
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Integrated solutions from vendors such as HP, which offers the HP InsightDynamics - VSE in conjunction with the company's HP c-Class BladeSystemproducts (using the HP Virtual Connect technology — a means of virtualizingEthernet and Fibre Channel network connectivity for blades), provide essentiallyall of the same benefits of a basic virtualization scenario through a hardware-based solution. In addition, this solution can utilize a hypervisor to further extendcustomer benefits and, in that scenario, delivers some of the attributes IDCdefines in an advanced virtualization scenario.Table 1 compares the annual server cost per user for three types of deployment:1.
Unvirtualized
— physical x86 server/physical OS usage/no virtualization andsystems configured at less than 10% capacity2.
Basic virtualization
— x86 server consolidation via virtualization withoutadvanced functionality such as live migration and with limited automation andmanagement applied selectively; systems achieve from 20% to 40% capacityutilization; common deployment for test and development scenarios, but limitedproduction use3.
Advanced virtualization
— widely virtualized infrastructure (>25%), includingboth server virtualization and at least some storage virtualization; use of management tools and automation tools such as workload redistribution andautomatic workload migration — used both on live VMs and on cold OS images— for meeting service-level agreements and availability goals; systems achieve40% to 60% or more capacity utilization
TABLE 1
Business Value of Virtualized Deployment: Total Costs
Total Costs per User per Year ($) Savings Versus Unvirtualized (%)Unvirtualized 165 NABasic virtualization 107 Up to 35Advanced virtualization 80 Up to 52
Source: IDC's Business Value of Virtualization Research, 2008
IDC believes that organizations using x86 solutions today should begin to adopt next-generation solutions as quickly as product adoption timelines permit. By so doing,organizations will gain better utilization of server resources and reductions inacquisition, deployment, and power and cooling costs.Further, the reduction of staffing costs and increasing business agility translate intolong-term benefits that for years to come will deliver ongoing returns on theinvestment required to put this in place initially.
 
©2008 IDC #213430 3
SITUATION OVERVIEW
 Value Proposition of Server Virtualization
Since its emergence in the early 2000s, virtual machine and hypervisor softwaretechnology aboard x86 servers has quickly become one of the most talked-about newtechnologies in IT infrastructure. The ability to virtualize servers and reclaim excesscapacity has caught the interest of datacenter managers who are facing difficultpower and cooling problems, the need for additional IT capacity to react to marketchanges, and a lack of significant capital resources.The first phase of customer adoption of virtualization is really a continuation of a trendin the industry that began in 2000. Predominantly, this phase involved ITsimplification. During the economic downturn that followed the dot-com boom,customers recognized the need for datacenter consolidation, physical server consolidation, and asset inventory controls. The problem of IT complexity was sosevere in some cases that customers did not even know how many servers they weresupporting.Physical consolidation efforts and workload migration efforts started in the early2000s and later began to merge with virtualization adoption plans, as x86-basedsolutions from VMware matured to the point of delivering good-enough scale andperformance. As a result, customers began to rehost aging operating environmentssuch as Windows NT 4.0 on newer hardware ("legacy rehosting") to get the cost andperformance benefits of the new hardware.By 2003 the market began to evolve toward a shift in the nature of the adoption of virtualization software on x86 servers. About 70% of all virtualization softwaredeployments in 2003 were related to software development and testing — taking anemerging technology and applying it inside a sandbox of large organizations' test anddevelopment labs for consolidation purposes. But by the end of 2005, IDC saw thespending shift from consolidating software development and testing environmentstoward consolidating applications within the production part of the IT infrastructure.The focus was on securely encapsulating multiple applications to drive up utilizationand drive down power and cooling expenses.Since then, the industry has transitioned to focus more heavily on production-levelconsolidation, which continues today as a primary motivator for customers bringingvirtualization within their organizations. In the interim, a variety of competitivesolutions have entered the market, including multiple implementations of the opensource Xen hypervisor technology, which has been integrated into both mainstreamcommercial Linux distributions and nonpaid Linux distributions and, in several cases,has been commercially packaged into a standalone product. Microsoft is the latestand arguably the most significant player to join the market. During 2008, Microsoftrolled out its Hyper-V hypervisor, which replaces its Virtual Server product that hasbeen used primarily by customers for test and development purposes and low-scale,low-performance production deployments.However, the industry has seen other related developments that offer similar valuepropositions that in some cases can reduce the need for a hypervisor. But more often,these solutions will work in concert with hypervisors to deliver a higher overall
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