Virtualization estimated to help Indian business avoid $3.89bn spend by 2020

By : |August 13, 2013 0

BANGALORE, INDIA:VMware, Inc., the global leader in virtualization and cloud infrastructure, launched the Virtualization 2020 campaign in an effort to help businesses move from the client server era to mobile cloud era of computing.

As a first step, VMware sponsored the IDC Server Economies Index to demonstrate the potential of virtualization and validate the impact of server virtualization in Asia-Pacific.

The study revealed that the economic impact of server virtualization is estimated to reach US$3.89 billion in India by 2020.


Titled Vision 2020: Virtualization’s Potential US$98 Billion Impact (Study attached, August 2013, IDC#AP77008W), the study showed that US$98 billion worth of spending is expected to be avoided in the region from 2003-2020 in the areas of server spending, power and cooling, floor space and cost of manpower and overheads. The report provides an analysis over the past 10 years and looks forward through 2020.

In India, IDC estimates the potential economic impact at US$3.89 billion, comprising costs avoided in a few key areas:

  •  US$2.37 billion in server spending avoided due to servers avoided. Server spending refers to the customer revenue generated from the sale of physical servers.
  •  US$666 million in power and cooling costs avoided due to servers avoided. This refers to cost of energy to power and cool a physical server in the datacenter.
  •  US$28 million in floor space costs avoided due to real estate avoided. This refers to the land or construction cost associated in housing a physical server.
  • US$827 million in server admin costs avoided. This refers to server admin costs avoided and includes IDC’s estimate of the cost of people and overheads needed to manage each physical server.

“The IDC Server Economies Index points toward the value of increasing consolidation and the cost avoidance that virtualization provides to businesses in India. With datacenters at the heart of IT transformation, we expect the adoption of virtualization to accelerate over the next few years as organizations increasingly gain confidence and benefit from the technology,” said Venu Reddy, research director, IDC India.

“Indian organizations have just begun laying the foundation of their datacenter transformation with virtualization. We’re excited and look forward to the huge opportunity that lies ahead as more and more organizations begin to benefit from our technologies on their journey to the cloud,” said T Srinivasan, managing director, VMware India & SAARC. “The IDC study provides some substantial estimates on the impact our technologies are creating in India,” he added.

The Software-Defined Journey Ahead

Over the past 12 months, VMware has made several announcements in support of the Software-Defined Data Center, whereby the benefits of server virtualization are applied to everything in the data center.

While the IDC report captures the avoidance of costs associated with server virtualization, it has been estimated that using a software-defined data center model for all other aspects of the datacenter could extend savings as much as six to seven times that of server virtualization alone. The software-defined data center opens up new market opportunities for virtualization in networking, security, storage, for example. VMware estimates that the software-defined data center represents a US$28 billion total addressable market (TAM) opportunity by 2016 and could grow above 20 pc globally.

VMware customers have utilized that cost avoidance to both boost the bottom line as well as re-allocate those resources to more strategic IT initiatives such as new application development projects that drive the business forward.

Virtualization impact across Asia Pacific

The IDC study estimates the impact of virtualization to reach US$98 billion across eight countries in Asia Pacific by 2020. This includes $25.6 billion in costs that have been avoided to date, which is set to increase by an additional US$72.7 billion by 2020. When comparing results across the countries studied, the findings showed that the mature markets of Australia, Japan and Singapore avoided US$8 billion more spending in historical costs due to virtualization than the emerging markets. For these mature markets, the critical costs avoided was servers, which contributed to nearly half (47pc) of overall costs in the four areas. In contrast, the emerging markets of China (PRC), India, Indonesia, Malaysia and Thailand saw greater forecast of the costs avoided by US$15 billion in future, than the mature markets.

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