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Custom Research Study

Investments in Virtualization

Prepared for Dell

‐February 2010‐

Prepared by IDG Research Services

Custom Research Study – Investments in Virtualization

Prepared for Dell Ι February 2010

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CONTENTS

Introduction Survey Overview & Objectives ................................................................................................................................................ 3 Methodology ........................................................................................................................................................................... 4 Key Findings ......................................................................................................................................................................... 5‐6

Detailed Findings Current Virtualization Investments ......................................................................................................................................... 7 Planned Virtualization Investments ........................................................................................................................................ 8 Server Virtualization: Present and Future Investments .......................................................................................................... 8 Current Use of Virtualization Technology ............................................................................................................................... 9 Planned Use of Virtualization Technology .............................................................................................................................. 9 Objectives Driving Organization’s Virtualization Initiatives .................................................................................................. 10 Challenges in Deploying Virtualization Technology .............................................................................................................. 11 Challenges in the Management of Virtual Environments ..................................................................................................... 12 Effectiveness in Maximizing the Return on Virtualization Investments ............................................................................... 12 Potential Benefits from Virtualization Yielding Greatest Return .......................................................................................... 13 How Organizations Measure Return from Virtualization Investments ................................................................................ 14 Organization’s Target/Expected ROI/Cost Savings Realized from Virtualization Investments ............................................. 15 Time Frame for First Level ROI or Savings from Virtualization ............................................................................................. 15 Factors Limiting Organization’s Ability to Achieve Greater ROI on Virtualization Investments ........................................... 16 Areas in Which Organization Plans to Expand Initiatives Over the Next 12 Months ........................................................... 17 Critical/Very Important Factors When Selecting a Virtualization Management Solution .................................................... 17

Respondent Profile Primary Job Function, Primary Industry/Business Activity, Involvement in Data Center Decisions ..................................... 18

Contact Information IDG Custom Solutions Group ................................................................................................................................................ 19 IDG Research Services ........................................................................................................................................................... 19



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Survey Overview & Objectives

This research program was conducted for Dell among IT decision makers at SMB companies (100‐499 employees) to determine the following:

Virtualization investment trends

Current and planned uses of virtualization

Drivers of virtualization investments

Challenges in deploying and managing virtualization technology

Levels and type of return achieved on virtualization investments

Timeframe for realizing ROI on virtualization investments and factors limiting ROI

Important factors when selecting a virtualization management solution



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Methodology

This study was conducted in the United States among IT decision makers with involvement in data center purchases at companies with 100‐499 employees.

The survey was administered online. Each sample member received an email invitation containing a URL link to access the survey, which they could click on or paste into their browser.

The survey was fielded among the CIO, Computerworld, InfoWorld, Network World, CSO and IT World audiences. Each respondent received an identical survey with the exception of IDG branding.

The study was conducted between January 21, 2010 and February 2, 2010. A total of 112 surveys were completed.



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Key Findings

The majority of respondents are currently investing in server virtualization. Respondents are most likely to be currently investing in the following virtualization technologies: server virtualization (83%), storage virtualization (41%), desktop virtualization (35%) and application virtualization (32%). Seven percent are not investing in virtualization. Twelve months from now respondents expect to be investing in the same four areas.

The number of virtual machines (VMs) at respondents’ organizations is expected to nearly double over the next 12 months. Respondents report that an average of 44 VMs are currently running at their organizations, and this is expected to increase to 76, on average, over the next year.

Percent of virtualized servers per organization expected to increase within the next 12 months. On average, respondents’ organizations have 27 servers in their data center. Respondents report an average of 36% of their organization’s servers currently virtualized. Twelve months from now respondents expect an average of 59% of their servers to be virtualized.

An increased use of virtualization technology for business continuity and in production to support mission‐critical business services is planned . Sixty‐one percent (61%) of respondents are currently using virtualization to support server consolidation efforts. Other ways virtualization is currently used include in production to support non mission‐critical business services (53%) and to support business continuity/disaster recovery (46%). Twelve months from now respondents are most likely to be using virtualization to support business continuity/disaster recovery (63%), to support server consolidation efforts (63%) and in production to support non mission‐critical business services (62%).

Virtualization initiatives are often driven by the need for a more efficient use of server and storage resources. Respondents report that more efficient use of server and storage resources (71%) is a major driver to virtualization initiatives. Other top drivers include server and storage consolidation (70%) and easier provisioning, storage provisioning, and software deployment (65%).

Respondents face a number of challenges with virtualization technology deployment, particularly complexity and inadequate skills/training issues. Respondents most often cite the following challenges with virtualization technology deployment: complexity (40%), inadequate skills/training issues (33%) and software licensing issues (30%).

Identifying the root cause behind performance issues is a top concern for managing virtual environments. Respondents indicate that indentifying the root cause behind performance issues (42%), lack of proper training (38%), lack of adequate tools (28%) and lack of visibility to troubleshoot problems (28%) as the major challenges when managing virtual environments.



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Under one‐half of respondents rate their organizations as highly effective at maximizing the return on virtualization efforts. Forty‐three percent (43%) rate their organizations as extremely effective (9%) or very effective (34%) at maximizing the return on virtualization investments.

Companies have yielded the greatest return on their investment in server and storage consolidation. Respondents have realized the greatest return on virtualization through server and storage consolidation (48%) and more efficient use of server and storage resources (46%). Respondents have also seen improvement in disaster recovery or lower DR costs (42%) and easier server provisioning, storage provisioning, and software deployment (40%).

Reduced hardware costs and server and storage consolidation are the most common indicators of return on virtualization investments. Respondents measure their return on virtualization investments through reduced hardware costs (45%), server and storage consolidation (41%) and improved systems reliability/availability (37%).

Most respondents have realized ROI or cost savings from virtualization investments. Eight out of ten respondents (80%) have realized ROI or cost savings from virtualization efforts. Respondents most frequently cite realization of virtualization ROI through hardware cost reductions (52%), space reduction through consolidation (39%) and maintenance cost reductions (36%).

Respondents report an average of 7 months to realize the first level of ROI or cost savings from virtualization investments. While 37% realize the first level within 6 months, 36% see the first level between 7 and 12 months, and only 14% expect to see results in more than 12 months.

Increased management complexity and controlling virtualization sprawl are limiting organizations’ ability to achieve greater ROI on virtualization efforts. Top barriers limiting organizations’ ability to achieve greater ROI on virtualization efforts include increased management complexity (26%), controlling virtualization sprawl (20%), performing problem isolation (17%) and difficulty managing change in virtual environments (15%).

Respondents report organizational plans to expand initiatives through virtual desktops and by building on disaster recovery solutions over the next 12 months. Forty‐four percent of respondents plan to expand initiatives through virtual desktops (44%) and by building upon a disaster recovery solution (44%) over the next 12 months. Additionally, 42% plan to expand by virtualizing business critical apps such as databases or mail servers, and 34% plan to expand with virtual storage.

Reliability and security are most important factors when selecting virtualization management solution. Top factors when selecting a virtualization management solution include reliability (96%), security (94%), efficiency in managing virtual and physical infrastructures (86%) and flexibility (84% rating critical or very important).



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Base: 112 qualified respondents

Detailed Findings

The majority of respondents are currently investing in server virtualization.

IT decision makers report that their companies are investing in a wide range of virtualization technologies. More than eight out of ten (83%) respondents’ companies are investing in server virtualization. While 41% are investing in storage virtualization, 35% are investing in desktop virtualization, and 32% are investing in application virtualization.

Just 7% of respondents report that they have no current investments in virtualization.

On average, 44 virtual machines (VMs) are currently running at respondents’ organizations (median = 10).



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Respondents plan additional or new resources for investment in the top four areas of virtualization.

The same four areas of virtualization top the list of planned new or additional investments for the next 12 months, and in particular there is evidence that desktop virtualization is a growing area – a higher percentage of respondents are planning investments in desktop virtualization (47%) versus the percent currently investing (35%). Seven out of ten respondents (70%) expect to invest new or additional resources in server virtualization.

Respondents expect the number of virtual machines at their organizations to nearly double, on average, over the next 12 months (76 virtual machines (VMs) versus 44 currently installed).

The average number of servers virtualized is expected to increase over the next 12 months.

Respondents report an average of 27 servers in their organization’s data center. Currently, respondents indicate that an average of 36% servers are virtualized at their organizations, and expect that 59% of servers, on average, will be virtualized 12 months from now.

0% 10% 20% 30% 40% 50% 60%

Currently virtuallized

Expect to be virtualized

36%

59%

Percent of Servers Virtualized



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In the next 12 months an increase is expected in the use of virtualization technology to support business continuity/DR efforts and in production to support mission‐critical business services.

Companies most frequently cite the use of virtualization technology to support server consolidation efforts (61%) currently. Respondents often report that their organizations are also using virtualization technology in production to support non mission‐critical business services (53%), to support business continuity/disaster recovery (46%) and in production to support mission‐critical business services (45%).

Looking ahead 12 months, two‐thirds (66%) of companies plan to use virtualization technology to support business continuity/disaster recovery, 63% plan to use it to support server consolidation efforts, 62% plan to use it in production to support non mission‐critical business services, and 59% plan to use virtualization in production to support mission‐critical business services.



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Virtualization initiatives are often driven by the need for a more efficient use of server and storage resources.

Respondents were asked what objectives are driving their organization’s virtualization initiatives. Survey results show that more than seven out of ten respondents (71%) are looking for a more efficient use of server and storage resources. Other top drivers include server and storage consolidation (70%), easier server provisioning, storage provisioning, and software deployment (65%) and improving disaster recovery or lower DR costs (62%).



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Respondents face a number of challenges with virtualization technology deployment, particularly complexity and inadequate skills/training issues.

When asked what challenges to virtualization technology deployment their organizations are facing, four out of ten respondents (40%) report complexity as a major challenge. Inadequate skills/training issues (33%), software licensing issues (30%), and difficulty proving ROI (25%) are other top virtualization technology deployment challenges.

Achieving buy‐in from upper management and stakeholders is reported as a challenge by just 13% of respondents, suggesting that most companies are committed to implementing virtualization and are past the initial approval stage, dealing with more hands‐on implementation issues.



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Identifying the root cause behind performance issues and lack of proper training are the top concerns with managing virtual environments.

Respondents also face challenges with the management of virtual environments. Almost half are concerned about identifying the root cause behind performance issues (42%). Other top challenges include lack of proper training (38%), lack of adequate tools (28%), and lack of visibility to troubleshoot problems (28%). Data center complexity is cited as a management challenge by 26% of respondents.

Under one half (43%) of the respondents rate their organizations as at highly effective at maximizing the return on virtualization efforts.

Nine percent (9%) rate their organizations as extremely effective and 34% as very effective in maximizing the return on its virtualization efforts. Forty‐four percent (44%) rate their organizations as somewhat effective.

0% 10% 20% 30% 40% 50%

(NET) Top Two Boxes

(5) Extremely effective

(4) Very effective

(3) Somewhat effective

(2) Not very effective

(1) Not at all effective

43%

9%

34%

44%

6%

7%

Effectiveness in Maximizing the Return on Virtualization Investments



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Server and storage consolidation efforts have yielded the greatest return on virtualization investments to‐date.

Respondents indicate that the following potential benefits from virtualization have yielded the greatest return for their organizations: server and storage consolidation (48%), more efficient use of server and storage resources (46%), improving disaster recovery or lower DR costs (42%), and easier server provisioning, storage provisioning, and software deployment (40%). Previous survey results show that these same benefits are also the top objectives respondents set out to achieve with virtualization.



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Reduced hardware costs and server and storage consolidation are most common measures of return on virtualization investments.

Organizations measure their return from their virtualization investments in a variety of ways. The most popular indicators of investment return include reduced hardware costs (45%), progress in server and storage consolidation efforts (41%), improved systems reliability/availability (37%) and lower disaster recovery/business continuity costs (30%). Almost one‐quarter of respondents (24%) are not currently measuring return on their virtualization efforts.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Reduced hardware costs

Server and storage consolidation

Improved systems reliability/availability

Lower disaster recovery/business continuity costs

Easier server provisioning and software deployment

More flexible development and testing environments

Ability to more flexibly adapt to variable workloads and changing business needs

Reduced management costs/administrative overhead

Decreasing problem/incident resolution time

Reduced or improved staffing to server/workload ratios

Other

We are not currently measuring return on virtualization investments

Don't know

45%

41%

37%

30%

29%

29%

27%

24%

23%

11%

2%

24%

4%

How Organizations Measure Return from Virtualization Investments



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Base: 90 qualified respondents who have realized ROI or cost savings from virtualization investments

Most respondents have realized ROI or cost savings from virtualization investments.

The vast majority of respondents (80%) have realized ROI or cost savings from virtualized investments, most often in the form of hardware cost reductions (52%). Space reductions through consolidation (39%) and maintenance cost reductions (36%) have also been achieved by more than one‐third of the respondents.

Respondents report an average of 7 months to realize first level of ROI or cost savings from virtualization investments.

Among those respondents who have realized ROI or cost savings from their virtualization investments, a third say the first level of ROI was realized within 6 months (37%) and a third (36%) within 7‐12 months. On average respondents saw the first level of ROI or cost savings from their virtualization investments in 7 months.

Average = 7 months



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Two‐thirds (66%) of the respondents cite that one or more factors are limiting their companies’ ability to achieve greater ROI on virtualization investments.

Organizations recognize that there are barriers limiting their ability to achieve greater ROI on it virtualization investments. The most frequently cited factors include increased management complexity (26%), virtualization sprawl (20%), performing problem isolation (17%), and difficulty managing change in virtual environments (15%).

Interestingly, just under one‐quarter of respondents (23%) report that nothing is limiting their organization’s ability to achieve greater ROI on virtualization investments.



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Most respondents (95%) report organizational plans to expand their virtualization initiatives over the next 12 months.

Forty‐four percent of respondents (44%) plan to expand their initiatives their efforts to implement virtual desktops and/or to build or expand upon a disaster recovery solution over the next 12 months. Additionally, 42% plan to virtualize business critical apps such as databases or mail servers, and 34% plan to expand virtual storage.

Reliability and security are most important factors when selecting a virtualization management solution.

When asked which factors are most important when selecting a virtualization management solution respondents most often cite reliability (96%), security (94%), efficiency in managing virtual and physical infrastructures (86%) and flexibility (84% rating critical or very important). Just 24% indicate that an ability to create a foundation for cloud computing is highly important.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Reliability

Security

Efficiency in managing virtual and physical infrastructures

Flexibility

Compatibility with existing technology (no vendor lock‐in)

Automation of repetitive tasks

Ability to create a foundation for cloud computing

96%

94%

86%

84%

74%

56%

24%

Critical/Very Important Factors When Selecting a Virtualization Management Solution



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Respondent Profile

All respondents are employed at companies with 100‐499 employees. Over three‐quarters (79%) are employed in an IT management position – 48% at the VP level or above. Ten percent (10%) are business management. Respondents are employed in the following industries:

All respondents are involved in data center decisions in some way. The following chart presents their involvement.



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Contact Information

IDG Custom Solutions Group (CSG) The IDG Custom Solutions Group (CSG) creates powerful turnkey programs to match marketing needs. From content creation, circulation development to project management and production, IDG’s award-winning Custom Solutions Group truly leverages the strength of IDG’s brands. Extending the value and reach for IT marketers to communicate with their prospective customer base, CSG provides in-depth, content-rich vehicles in an integrated program of print, online, events and marcomm collateral tailored to meet an IT vendor’s objectives. Charles Lee Vice President, Custom Solutions Group Office: 508.820.8106 Fax: 508.626.0319 Email: [email protected] IDG Research Services

IDG Research Services specializes in marketing and media-related research for technology marketers. As a division of International Data Group (IDG), the world's leading technology media, research, and event company, IDG Research Services brings the

resources and experience of a large, global company to its clients in the form of a small, customer-focused business. For more information please visit http://www.idgresearch.com.

Janet King GM/Vice President Office: 207-847-9377 Fax: 207-847-9373 Email: [email protected]

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