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Vendors scramble to secure positions in the growing market for virtualization.
BT, an old-line telephone company formerly known as British Telecom, is trying to transform from a conventional telecom and networking company into an international IT services powerhouse. Virtualization technology is a key tactic in bringing about that change.
Virtualization technology is key to helping BT become an international services powerhouse, says Martin Wickham, CIO of BT Ireland.
BT Ireland has created a 50-terabyte pool of shared storage resources using hardware from EMC Corp., and it has reduced the number of Windows and Unix servers from 40 to two using virtual-machine software from VMware Inc., an EMC unit. "I personally have been waiting a long time to get to the point where we have a smaller number of physical boxes running multiple applications," says Martin Wickham, CIO of BT Ireland. He envisions expanding this virtual infrastructure so BT can create a utility-style IT backbone from which it can sell both storage and server capacity, a concept it's testing with two customers.
Welch Foods Inc., known for its jams and juices, also has turned to VMware to improve data-center efficiency and reduce costs through virtual machines. The company's servers were running at only 25% of capacity. Using VMware software, Welch is now running between 10 and 14 virtual servers on each physical machine, letting the company reduce costs while getting more work out of each machine.
BT's and Welch Foods' virtualization projects are relatively small, but they're ahead of many companies; most still are using virtualization in test environments, or not at all. A Microsoft survey of customers found that only 16% use virtual servers.
But that's changing, and the growing interest among business-technology managers in virtual servers and PCs has technology vendors scrambling to stake out positions in a market expected to boom. Virtual-machine technology will become so pervasive in the next five years that it will be an integral part of every PC and server shipped, predicts Gartner analyst Martin Reynolds.
VMware, the leading seller of virtual-server software, last week launched an effort with more than a dozen vendors to develop standards and push the technology into the mainstream. VMware's software for creating virtual x86 machines is a de facto standard already by virtue of its sales lead, and the company is trying to solidify that position by getting other companies to rally around its technology. It's providing access to its source code and interfaces under a program called VMware Community Source. Among those signing up are Advanced Micro Devices, BEA Systems, BMC Software, Broadcom, Cisco Systems, Computer Associates, Dell, Emulex, Hewlett-Packard, IBM, Intel, Mellanox, Novell, QLogic, and Red Hat.
Rivals, ranging from startups and open-source groups to Microsoft, also want a position in the market. Virtual Iron Software Inc. last week introduced software that automates data-center management through implementation policies and lets administrators create virtual machines and move applications among them. SWsoft Inc. last week introduced Virtuozzo 2.6.2 for Linux, intended to ease the migration of physical servers to virtual servers in Linux environments. Intel and AMD have laid out plans to build software hooks into their microprocessors to make it easier to create and deploy virtual machines on servers and PCs.
VMware's toughest challenges will come from XenSource Inc., which is developing open-source virtual-machine technology, and Microsoft, which plans to incorporate virtual-machine capabilities into the Win- dows operating system. Some vendors are placing multiple bets as the market develops; for example, IBM and HP are part of the XenSource effort in addition to partnering with VMware.
XenSource is developing Xen, an open-source hypervisor. Long a staple in mainframes, hypervisors are stripped-down versions of operating-system kernels that run directly on hardware and can be used to create efficient virtual machines that eat up only 5% of a CPU's computing power, rather than the 35% that's common with virtual machines.
Simon Crosby, Xen's VP of corporate strategy and development, dismisses VMware's partnership effort. "It smacks of a lot of the Microsoft pseudo-open announcements of the past," he says. "The words open and source appear in the announcement, but as far as I can tell, open means 'Join our club,' and source means 'Give us your technology, and we'll include it if we choose to do so.'"
VMware's customers are mainly businesses that use Windows, Crosby contends, while Xen is being adopted by users of Linux as well as other operating systems.
Microsoft acquired virtual-machine technology in 2003 when it bought Connectix and said in April that it would include virtual-machine software as part of Windows Vista, due next year. Virtualization isn't likely to be part of the initial release of the new operating system and may not show up until 2008. Still, adding virtual-machine capabilities to Windows will put pressure on VMware and others. Microsoft now sells a desktop virtual machine, Virtual PC 2004, as a separate product.
"It will be a complete rebuild of a virtualization solution that will be highly tailored for Windows," says Jim Ni, group product manager for virtual servers at Microsoft. So is Microsoft late to the party? "I don't think a lot of businesses are diving in head first to virtualize everything they've got," Ni says.
Worldwide revenue for virtual-server software was around $330 million last year. But it's expected to grow at 16% to 20% a year through 2009 as improvements in the technology make it easier to use, predicts research firm IDC. Overall, virtualization technology is a well-established market that includes storage, processing, management, and widely used technologies like VPNs. The overall virtualization market is expected to total about $19 billion this year, IDC says.
VMware's move last week is an effort to fight for market share before less-mature efforts from Xen and Microsoft can gain more converts. It also could ensure that VMware's products of the future meet the requirements of hardware and third-party software vendors that will emerge over the next few years.
Regardless of which approach wins, it's clear that more businesses will run more virtual machines in the near future. That's the goal of BT's Wickham. By combining the storage pool and virtualized server environment, BT Ireland hopes to sell capacity-on-demand services beyond its two initial business customers. "At this point, we're trying to focus on proving the model," he says. "The infrastructure we're building will allow us to move down that road in a cost-effective manner."
At Welch Foods, the use of virtualized servers not only cut costs, it significantly reduced the time it takes to implement new systems in the data center, says Jacob Matusevich, Welch's lead infrastructure analyst. Setting up a new physical server takes about three weeks to order the system, get it shipped, and install operating systems and applications. A virtual server can be set up in about 15 minutes.
Lower cost, ease of management, speed--virtualization promises all the right things. If the latest industry moves make it easier to use and help deliver on those promises, it won't be long before many businesses have more virtual servers than physical servers.
--With Laurie Sullivan
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