Like other adopters of server virtualization, Purdue University was concerned that its datacenter would hit the wall, exceeding physical space, power, and cooling limits. The use of EMC VMware let it combine 140 physical servers into three Hewlett-Packard DL-585 servers, a 40:1 compression ratio, says Mike Rubesch, director of IT infrastructure systems. "It helps postpone the inevitable," he adds.

But the first servers chosen had very low utilization -- around 5 percent -- so the 40:1 rate is not sustainable. Over time, Rubesch expects the ratio to be 6:1, taking into account such servers as e-mail, database, and telephony that cannot be virtualized. That utilization rate will still reduce overall power usage to 16 percent of what it had been and physical space needs to a tenth, as the use of blade servers plus virtualization greatly reduces the physical footprint. Facilities costs should fall by $75,000 per year and hardware costs by $250,000 per year, he says.

But organizations considering the use of virtualization need to be careful calculating costs, Rubesch cautions. If you have fewer than 10 virtual server instances running on a physical VMware server, virtualization becomes "extraordinarily expensive," he says.

IT managers must also be careful not to factor in too much savings for the operating systems and applications running in virtual machines, Rubesch says. Many IT managers count on being able to run multiple instances of an OS or an app on one CPU, paying for just one license, because most enterprise apps are licensed on a per-CPU basis. But vendors are starting to charge per instance, not per CPU. For example, BEA now charges per instance rather than per CPU for its WebLogic server, and Microsoft Windows Server Enterprise Edition's license allows use on one physical server and as many as four VMs on that server. As virtualization grows more popular, you can expect the licensing savings to evaporate, so the investment should be based on savings elsewhere, such as in hardware and facilities efficiencies, Rubesch says.

The use of VMs also increases your risk, because "you can put a lot of eggs in one basket," Rubesch says. But because you've reduced the number of points of failure, IT staff has more capability to focus on those critical areas, he notes. Rubesch is building sufficient capacity so that no single server is fully utilized, providing space for EMC's VMotion software to move VMs if a physical server fails. He's also keeping a spare physical server ready to go if needed.

Using virtualization also incurs a high up-front cost. "The benefits aren't immediate," Rubesch says. A big reason is that to use the EMC VMotion utility to move server instances to other physical servers for better load-balancing or failover requires that all the hardware use the same CPU family, requiring a big hardware cost at each refresh cycle. "You need to sell that concept a little bit," he says dryly.

Beyond the hardware costs, the use of virtualization makes the server environment more complicated, as "servers" can reside anywhere and change where they reside over time. As a result, "you need more skills," Rubesch says. For example, although a good Windows administrator will easily adapt to running virtualized Windows servers, you still need a dedicated person to handle such items as dynamic allocation and failover, he says. Of course, you can also use virtualization to simplify your environment, Rubesch notes, such as having standard server images that ensure consistency -- ending the nightmare of navigating the peculiarities specific to each hand-deployed physical server. "It's a lot simpler with VMs to have them nearly identical."

Despite the caveats on understanding actual savings and the increased up-front costs, Rubesch is a big fan of server virtualization: "You get real benefit from it -- as long as you plan ahead."

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