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Virtualization will reduce server numbers, but not cost. Here's why

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Deepa
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BANGALORE, INDIA: Server virtualization is a matured concept today. And, among other types of virtualization technologies, such as desktop, storage and network, server virtualization has made strong inroads into Indian enterprises, especially in the last couple of years.

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Pertisth Mankotia, head IT, Sheela Foam, says: "Majority of chief information officers (CIOs) understand the concept and its benefits."

His journey with server virtualisation dates two years back, when he had about 55 servers. Today he has to maintain only 10 of such physical servers, thanks to server virtualization.

For Arun Gupta, CIO, Cipla, who started virtualising his servers in late 2011, the transformation was a gradual process.

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"We moved applications to a virtualised environment gradually. The investment over the last two years was about 5 million. The benefit has been manifold including reduced number of servers, better capacity utilization, lower capital investment," Gupta adds.

There are some benefits on the maintenance, power and cooling fronts, which, for obvious reasons, need to be evalauated by every CIO. Apart from these benefits, server virtualization also brings in some tangible benefits such as simpler management, performance, and uptime of infrastructure.

Server virtualization can save an enterprise up to 30-40 per cent of its hardware cost. However, that does not mean that an enterprise's entire IT cost comes down drastically. There is a stipulated amount of capex that is involved in the initial stages of virtualization, which might increase the overall IT expenditure.

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"In the coming months, we are expecting it to go down by another 30 per cent. The capex investment had gone up for a while," Mankotia notes.

So what are these additional expenses.

IT analyst, consultant, advisor, Sanchit Vir Gogia, says: "There are multiple levels of expenditures, such as in hardware, middleware/OS, IT services, and application levels. There are a lot of traditional applications which will not work in virtual environment. So expenditure will probably increase. It is not a cost reduction story, but cost optimisation story which will neutralize cost for the company over the years."

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On the other hand, convincing one's management can be a daunting task, as it involves some amount of investment in terms of storage, RAM, virtualization software etc.

"One has to be very clear about the concept and plan it very effectively. We went for a blade server. CIOs should understand what are the processes that they require and they should also have an understanding as to what sort of RAM or storage is going to serve you in the current scenario as well while you grow," Raveendran adds.

A CIO will also have to prepare its IT administrative team for future, so that when it comes to allocating or provisioning extra resources or to scale as a company grows, they need not fall back on vendors.

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Do enterprises shy away from virtualizing mission critical apps?

Virtualization is a gradual process. You start by virtualising non-critical applications, and then down the line move critical applications, such as ERP, SAP and CRM as well into a virtualised environment.

Many large enterprises have already moved their mission critical applications, however, there is still a segment which is shying away from doing so.

"Larger enterprises would have already moved a lot of their applications, including mission critical application, on to virtual platform. However, that does not mean that a large part of the country has already done it. Top 30-50 companies have done aggressive virtualization exercise. Some mid market, or for that matter even larger enterprises are still not using mission critical applications for vitualization," adds Gogia.

Raveendran opines that virtualising mission critical applications has its benefits. He is on the verge of completing SAP implementation, which is expected to go live in a virtual environment in another couple of months.

"For SAP you need several servers, such as application server, developer server, quality server etc. If you configure them, you can change the resources, like increase RAM, processor etc as the demand arises. And it is related to hardware also. The blade server takes a lot of redundant factors such as, processor, power etc. So failure rate is minimised over there by virtualising it. Virtualisation with the right hardware will help mission critical applications. Once things are stabilized I can move some resources to cloud. So it can be one part of your cloud strategy. Gradually I will also move some legacy application to blade server," Raveendran adds.

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