I attended a great session at VMworld called “Conquering cost and complexity in virtualized environments”. It was a panel discussion moderated by Mark Linesh, VP at HP. The key speakers were Michelle Bailey, VP at IDC, and Rob Taylor EDS (an HP company).

Michelle ran thorough some statistics related to trends in virtualization. Here are some highlights:

• Spending on new servers has been flat since 1996.
• The number of installed servers has increased from 5 million in 1996 to 35 million in 2009.
• The number of physical servers is predicted to flatten due to virtualization.

The admin cost, however, is expected to increase. This cost grows with the number of servers, both physical and virtual. The “hidden cost of IT” is the number of system administrators. This is why the cost of people is the largest cost in the data center.

Power and cooling costs also scale with number of servers. Where this was a rounding error back in 1996, these costs are becoming very significant today.

Organizations need a new set of economics around the datacenter. Virtualization is the answer!

Virtualization helps contain the number of new physical systems coming into data center. In fact, the number of virtual servers is exploding. Administrators still need to address the management costs of patching and maintenance on virtual as well as physical servers. Automation will address this problem.

The application workload relies on servers, storage, and network.

IT management cost is still 70% maintenance and 30% innovation. (Here’s that ratio again.) Companies need to flip that ratio.

2009 is the tipping point in which the number of virtual servers will match number of physical servers. This will require a fundamental shift in the way people manage their infrastructure.

Virtualization has solved the CapEx problem. It has not yet addressed the OpEx problem.

Virtualization also introduces some interesting dynamics regarding long-time IT processes, for example, server provisioning. Some shops can set up a new virtual machine in 20 minutes. Imagine the organizational impact if their user base knew this and called in expecting such a fast turn-around time for all requests. So, this company still makes their constituents wait 3-5 weeks to prevent them from asking for a new machine every 20 minutes. In essence, they keep the same business processes in place as before. More progressive companies may want to take a different approach. But one key lesson is that standardization and discipline are critical for managing sprawling IT environments.

The panel discussion closed with the following summary:
Virtualization is about avoiding or delaying building a new $100M data center.

Follow the action at VMworld on Twitter at #HPVMW.

For HP Operations Center, Peter Spielvogel.

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