What’s the truth behind virtualisation costs?

22 Nov 2011

A new survey suggests that the majority of IT decision-makers have so far been disappointed in the cost savings achieved through virtualisation. What’s the problem, asks Jessica Twentyman?

A survey released this week by systems management company CA Technologies will make interesting reading for any company where virtualisation projects are being driven primarily by cost concerns.

The poll, conducted among 460 IT decision-makers from medium and large enterprises, found that almost two-thirds (63 percent) have so far been disappointed by the cost savings they've achieved using virtualisation.

So what's going wrong for them? The findings suggest that a lack of IT service automation in virtualised environments is the major stumbling block. For example, 44 percent of survey respondents who said that most of their server provisioning processes are automated report significantly reduced costs through virtualisation. By contrast, almost half (48 percent) of those who said that the complexities of virtualisation have introduced new costs said that most of their server provisioning processes are manual.

That message, naturally, fits well with CA Technologies' strategy of selling systems management software that automates many of the processes involved in keeping a virtualised data centre up and running. It's a rapidly evolving and fiercely competitive market, in which it is competing against vendors such as BMC and HP.

But it's not just tools that companies are lacking. They are also struggling to make the changes in IT roles and responsibilities that a newly virtualised environment demands.

"Virtualisation is a bean counter's dream, but it can be an operational nightmare," stated one respondent to the survey, Ian Watts, a senior technical manager of BT Americas. "Change management is a huge overhead, as any changes need to be accepted by all applications and users sharing the same virtualisation kit. While many organisations are seeing benefits from virtualisation, such as reduced hardware spending and improved server utilisation, these benefits often get overshadowed by the lack of productivity improvements in data centre staffing and operations."

In fact, according to James Staten, an analyst at Forrester Research, higher-than-expected costs, or lower returns, are major reasons for 'VM stall' - the slowing or stoppage in large virtual server migrations. Some costs come from realistic expectations, he says in a recent report, and some from that failure among IT organisations to adapt teams or budgets to take greatest advantage of the technology.

In that sense, at least, the price war that is rapidly developing between virtualisation rivals VMware and Microsoft may be something of a red herring for IT decision-makers. This week, Microsoft executives responded to VMware's new pricing for virtualisation technology with demonstrations showing how customers can run clouds using Microsoft's hypervisor technology at (allegedly) one-quarter of the cost.

What is clear, however, is that those upfront investments in virtualisation are only half the story for many IT organisations: far more effort is needed on the ongoing operational elements of virtualisation if it is to deliver on its extensive cost-reduction promises.