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Virtualization Unlocks Cloud Computing

By Tom Bittman | August 11, 2009 | 4 Comments

VirtualizationFuture of InfrastructureCloudAgility

Few organizations that I talk to seem to understand the strategic ramifications of server virtualization. They tend to think about cost-cutting – virtualization simply as a form of efficient consolidation. We’ve surveyed our clients – those starting out on virtualization say they are doing it to save money. They are thinking tactically.

unlock cloud Hey, there’s nothing wrong with saving money, but strategically, virtualization is not primarily about cost-cutting. Strategically, virtualization leads inexorably down a path toward flexible sourcing, and cloud computing.

Even our surveys show that organizations who are well on their way toward virtualization change their points of view – flexibility, agility, speed move to the top of the list.

What is virtualization doing to these people? There are at least five things that virtualization does to unlock the door to cloud computing, and push organizations faster in that direction:

1) Enables economies of scale: This is one way cloud providers squeeze their costs in order to make money. Enterprises can do it too!

2) Decouples users from implementation: It’s amazing to me how many business units are closet server huggers. They like to stipulate how their software is deployed. They like to know where the server is located. They don’t like to share! Virtualization forces the relationship to change from a specific implementation, to service level agreements. It also makes it possible to choose alternate sourcing – because if the customer relationship is services, IT can choose how the implementation is sourced.

3) Speed, flexibility, agility: Early adopters of cloud computing talk about how quickly they can get new servers online. Compared to the 4-6 weeks it takes an average IT shop to deploy a server, just about anything is faster. However, virtual machines can be deployed roughly 30 times faster. It doesn’t take a cloud to improve speed. And, of course, operational processes and management tools need to change to deal with speed. And speed changes business expectations and behavior – it changes culture.

4) Breaks software pricing and licensing: You can’t charge users for physical capacity when only a small portion of that is used. You can’t charge users for every potential server the software might be running on. You’ve got to charge and license based on some kind of usage model. Of course, you can charge whatever you want until users get smart, but change is inevitable.

5) Enables, motivates chargeback: When servers can be delivered in minutes rather than weeks, IT users ask for more – roughly two times as much, based on feedback from our clients. The natural barrier is gone. Unless there is a cost, a friction, associated with a server deployment, how do we make good business decisions? IT needs to focus more on usage accounting, and chargeback is growing as a mechanism to manage virtual capacity usage.

Economies of scale, shifting users to a services-oriented relationship, delivering much faster, forcing software prices to align with usage, charging business units based on usage. Sounds like cloud computing to me.

Virtualization, private cloud, cloud – that’s the natural evolution.

The thing is, most major IT vendors (not all) get this. Why do they care? The time to influence an enterprise’s cloud choices, software architectures, management architectures for the cloud, standards, are when organizations are virtualizing. So is cloud computing on your strategic plan? It may not be on yours, but it certainly is the plan the major virtualization vendors have for you! Be proactive, take charge of your own on-ramp to the cloud, or get taken!

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  • Jacob Van Ewyk says:

    I’m seeing a lot of cloud discussions start out the same way that virtualization discussions have often started out: cloud is about saving money. The real benefits to cloud are solving problems that can’t be solved in a traditional infrastructure, agility, flexibility, etc. Cloud discussions today are a lot like the client discussions I’ve had around virtualization a few years ago.

  • Gareth Taube says:

    We agree 100% and are seeing this exact trend in our customer base. The problem many run into as they get closer and closer to cloud style computing is WAN inefficiency. To truly be cloud capable requires a fast, efficient, and reliable WAN infrastructure. This WAN infrastructure has to be enabled with WAN Optimization. Yet most WOCs are hardware appliances and cannot be dynamically deployed in a cloud fashion. The last key ingredient to making all this work is a virtualized WAN acceleration technology. If you add that to your list, it will be complete.

  • Interesting to see you talk about cloud computing being an evolution of virtualization. We’re an ISV in the data management space and although we’d originally optimized our software for virtualized environments to help our partners deploy our technology more easily (so concur that the real benefits of virtualization are flexibility, agility and speed) the additional benefit was that we were able to release our RainStor cloud offering much quicker than we anticipated. I’ve outlined the hard work and planning, and of course little bit of good timing and luck, that allowed us to make the transition at

  • Joe Baron says:

    Excellent post, I agree 100%. I see this natural shift from what you call tactical thinking (virtualization lowers costs) to strategic thinking (virtualization provides agility and speed) as a sort of “virtuous bait and switch”. *Because* people understand, or think they understand, the cost savings that virtualization can provide, it is often easier to justify a virtualization project on that basis alone, *even though you know* that the real values (flexibility, agility, and speed) are far more important.

    You can’t easily sell people on something that they don’t (yet) understand, so you position lower costs as a primary value, and agility as a secondary value. You know that it is really the other way around, but understand that it may take the client a while to realize that.