Intelligent Enterprise

VMware made a stunning debut on the New York Stock Exchange this week — reportedly the strongest IPO since Google — and the future looks good for VMware itself and for virtualization in general. The future, however, isn't fully here yet.

Virtualization looks good for a lot of exciting reasons. The central promise of virtualization is resource optimization — doing more with less. What's not to like about that? Companies like the promise of reduced cost and complexity (more on this later). In a recent survey, Forrester Research found that 40 percent of U.S. respondents currently use virtualization… but more than 90 percent are aware of the technology. Interestingly, the survey also indicates that large companies are much more likely to use virtualization than smaller businesses. Arguably the SMB sector more keenly feels the need for cost savings than larger corporations — could it be that the cost/complexity equation for virtualization works out unfavorably for smaller businesses?

Operating systems have been exploiting virtualization from the days of yore, and a number of hardware/OS vendors such as HP, IBM, Microsoft and others have been in the virtualization market for a while. Newer vendors are bursting onto the scene, and the inevitable shake-up has begun (witness the Citrix acquisition of VMware-competitor XenSource on the heels of the VMware IPO this week).

Virtualization complements grid computing — something of a "made for each other" situation — and hence also distributed databases. Media reports indicate that the recently released Oracle 11g is still lacking in fully exploiting the "g" (as in "grid") and it will be interesting to see how database vendors like Oracle, already a VMware partner, take advantage of the likes of VMware in future.

Yet these are relatively uncharted waters, and virtualization is not something that companies might want to rush into. Resource sharing at the server level is something that can be deployed, in theory, across the enterprise, but take a moment (or two or three) to balance opportunity with risk and realism. Is there a relatively clear cost justification? Where is virtualization best deployed — are you, for example, ready to move your 24x7 enterprise databases onto virtual servers? Are your system and database administrators trained in managing virtualization? On the exciting journey into this virtual world, you are best guided by diligence, experience… and your vendor.

In the meanwhile, VMware is clearly galloping along: revenues for 2006 were around $700 million, up 82 percent from the previous year, and Forrester reports that VMware has now reached a $1 billion annual run rate. Really, the only question is: what took so long for companies like VMware to emerge?

Rajan Chandras is a consultant with a global IT consulting, systems integration and outsourcing firm, and can be reached at rchandras@gmail.com.