Kelley Martin, network architect at Provident Bank, has battled the same bugaboos that everyone in IT faces these days--lack of space for additional physical servers, increasing electricity costs, and difficulty managing the environment, particularly supporting older hardware and associated software. And like many IT pros, he was looking for answers in virtualization.

"When we started on this project about a year and half ago, virtualization wasn't quite the big buzzword as yet," Martin says. "We needed some answers to our problems, but we also wanted to keep our exposure level limited."

Martin wasn't alone with his concerns about virtualization, in which virtual servers are created out of software-based partitions inside a physical server. Like many companies, Provident had already used power-efficient dual and multicore processors and high-density blade servers to improve resource utilization and reverse server sprawl in the data center. It was time to take the next step: combining those advances with virtualization.

In a survey of 420 U.S. IT managers, tech services provider CDW found that more than half have a server-optimization project in the works. Twenty-six percent plan to use virtualization as their primary optimization technique, 22% are looking at blade servers, and 21% are considering dual-core servers.

Martin began with a test and development program aimed at reducing the time and expense involved in adding new software. The bank's routine was to buy servers each time it tested new apps, and it had a lot of underutilized and idle servers.

Using VMware virtualization software on Hewlett-Packard ProLiant servers, Provident created virtualized servers for its test environments. The move saved about $70,000 in hardware purchases and cut power requirements by 13,000 watts. Old physical servers moved into virtual environments freed up 75% of the bank's server rack space.

Martin used physical-to-virtual conversion software from Leostream that lets him almost instantly move older servers onto virtualized ones. With the test and development effort a success, he created redundant virtual server platforms to improve business continuity. Martin also is putting some production apps such as Web servers and Active Directory onto virtualized servers. To date, he has created 60 virtual servers on five physical hosts.

"We went from zero to 60 in about a year," Martin says. "Because it's an ongoing part our of strategy now, when we do our budgets, we don't have to ask for the same number of physical servers we used to, and our ability to recover from failure is quicker."