Server virtualization has stalled, despite the hype

The No. 2 top sleeper tech story of 2010

Four years ago, data center server utilization was just 18 percent. To put it another way, on average 82 percent of the server capacity in major data centers was underutilized. Given all of the emphasis on server virtualization in the last few years, you'd expect utilization to have increased sharply. But it hasn't. According to Gartner research, overall utilization is still at 18 percent -- and utilization of x86 servers is one-third lower at 12 percent.

One big reason: Server virtualization has stalled. Research shops and vendors have published numbers indicating that although most enterprises have stuck their toe into the waters of virtualization, they've hardly plunged in. A survey by ESG Research published in November showed that only 39 percent of the VMs currently deployed are in production environments; a survey earlier in the year by Prism Microsystems found that just 30 percent of production servers have been virtualized. Late last year, Gartner put the number of workloads running in virtual machines at just 16 percent.

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What's the problem? Talk to analysts and industry insiders about this issue and you'll here the phrase "low-hanging fruit" -- that is, virtualization built up quite a head of steam as IT consolidated and virtualized in-house applications like email, Web, and file and test servers.

All those applications have a few common characteristics: They are "owned" by IT and, although important, are not generally seen as mission-critical. "Ownership of the applications belongs to the business units; the cloud and virtualization flies in the face of that," says Bruce Milne, vice president of product management for CA Technologies. When Milne worked at Hyperformix (now owned by CA), he found that his customers were running important servers at just 5 to 10 percent of capacity.

Applications that haven't been virtualized -- such as order processing, financial transactions, and ERP -- tend to be I/O-centric. That means it's much more difficult for IT to monitor performance and availability problems that could develop when they run in a virtualized environment, says Len Rosenthal, vice president of marketing at Virtual Instruments.

The push for virtualization also halted because budgets stalled as the recession roared in two years ago. In a survey by ESG of IT managers in nearly 500 companies that have undertaken some degree of virtualization, budget constraints were the most common reason cited for not using the technology to a greater degree. Other reasons included legacy applications that couldn't be supported by virtualization, performance issues, and security concerns.

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The top underreported tech stories of 2010:

  1. Apple quietly became a key enterprise provider
  2. Server virtualization has stalled, despite the hype
  3. URL-shortening services gave hackers a new entry point
  4. The health care industry faces its risky ERP moment
  5. Deferred IT maintenance is a ticking time bomb
  6. Energy-efficient Ethernet has arrived, with real savings
  7. A major Internet security hole was finally plugged
  8. Social media messaging is getting around traditional firewalls
  9. Businesses are resisting the XBRL mandate

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