Exploring the business case for implementing green-tech corporate strategies

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The Impact of Virtualization on IT Organizations

(Cost Reduction+ Scalability+ Efficiency+….) = ƒ (Virtualization) - Part 2

In the Part 1, I discussed the benefits of virtualization. In Part 2, I will discuss how virtualization impacts the IT organization and the various areas where virtualization plays a key role.

Over the long run, consolidation and virtualization are sure to yield financial results for the organization. But the challenge is in the initial stages where the investment could be high - owing to new purchases of hardware, software, new / additional data center facilities, etc. Also there is an investment in change management activities - training for the IT staff, process redefinition, etc., that has to be expended before the actual consolidation activities can take place. But once the initial investments are made, the returns are going to be ongoing.

Spend profile during the virtualization cycle

As seen in the above chart, there will be an increase in the capital outflow, but only to be followed by a steady and continuous drop in both capex and opex. In particular, the trend lines indicate that the cost model reflects a steady decrease in the outflow, rather than peaks. This helps an organization to plan for the cash model accordingly. This again emphasizes that virtualization helps in the long run. Also to be noted is that the breakeven point is not too long after virtualization is completed.

Virtualization Has Come to Engulf the Entire IT Landscape
Virtualization is changing all areas of the IT landscape. Starting from the core infrastructure to the application portfolio, everything can be virtualized. End-user computing, especially, has become really thin. The workstation of the yesteryears is now beginning to be replaced with thin clients, PDAs and pervasive devices - making mobile computing a reality and making computing power available to the wallet.

Do you know, even applications are energy guzzlers? Most of the thick applications are being replicated with newer technologies and web-based, service-enabled, so that they can be accessed through PDAs while on the go. Most of the dependencies on the end workstation have been removed and all the computing sent back to the back-end devices, making the end-user computing, very light.

Moving away from the confines of the data center, virtualization has reached end-user computing as well. Desktop virtualization along with application virtualization and streaming has become the key focus areas of an organization. Thin clients, PDAs and developments in pervasive computing have catalyzed the growth in this are. Another key impact area is cloud computing, where the features of virtualization are being used to the fullest extent.

Virtualization in all areas of IT

But has the back end become too heavy? No. This is where virtualization helps the IT organization to achieve lightweight and scalability to support the growing needs. It helps the organization to support the growing business demands of being agile and scalable - anytime...

Virtualization and Green IT
One of the key priorities for the business is to run an energy-efficient IT enterprise. These days enterprises are competing with each other to reduce energy consumption and cut down on emissions. Virtualization is a key technology and strategy to achieve green IT. Virtualization helps by reducing the server footprint, which reduces power consumption. The evolution of the hardware technology, from standard servers to blades, from voluminous chassis-based storage and network devices to modular, blade architectures, has helped organizations to adopt these technologies vigorously to reduce power consumption.

The Environmental Protection Agency (EPA) reports that the energy consumption by the servers in all the data centers in U.S. put together will double by 2011 to over 100 billion kilowatt hours. And Gartner says that over the next five years, most U.S. enterprise data centers will spend as much on energy (power and cooling) as they will on hardware infrastructure.

Says Rob Smoot, Product Manager at VMware Inc. "Every server virtualized saves 7000kWh of electricity annually or about $700 in energy costs" [1]

Worldwide, the average utilization of all the servers put together is rated around 30-50%. This provides a huge opportunity for consolidation and thereby reducing power consumption. Even a server that is in an idle state consumes around 50% of their rated power. And servers not being utilized properly leads to exorbitant power consumption. Hence it's important to "right-size" the IT infrastructure. The key here is to utilize the server hardware rather than replace redundant ones.

These, combined with better data center management practices will lead to a large energy savings and reduced electricity bills for organizations. LEED and EPA are pioneering efforts to build and operate green data centers by laying out standards, procedures and best practices for energy savings. Advancements in power and cooling technologies, customized for data center environments, complement the IT infrastructure side of things.

Another incentive for going green has come from governments. Many countries have started Carbon Credit regimes and this has given the much-needed impetus for the organizations to look for ways to reduce carbon emissions. Also the technology vendors are matching up to the pace by churning out products that would consume much lesser power than its predecessors.

Virtualization Drives cloud
Tom Bittman of Gartner says, ""We believe that virtualization actually unlocks cloud computing. Virtualization leads inexorably down a path toward flexible sourcing, and cloud computing" [2]. He puts it simply as "Virtualization, private cloud, cloud - that's the natural evolution"

The concept of cloud computing is catching on in large and medium enterprises alike. Cloud computing has become one of the most disruptive technologies in the recent times and many organizations are jumping onto the bandwagon. The service-oriented model(s) offered by cloud and the flexibility it provides to the business has become its unique selling point. Today, everything stands to be offered as a "service." Applications, platforms, processes, infrastructure - whatever was running "in-premise" is getting ported to the cloud. The very idea of "pay-per-use" provides an attractive alternative for an enterprise to look beyond the normal mode of building and running the compute environment.

Cloud can be built in various fashions and flavors, just to suit the requirements of the customers. A private cloud can be built within an organization's premises and provide "service"-based offerings, while the public cloud is an extended manifestation hosted in an ISV premises and accessed over the Internet.

At the same time there are other forms such as community and hybrid clouds that are different incarnations of the cloud concept.

Virtualization is one of the key enablers of cloud computing, which is powered by a combination of virtualization, automation and management. Every aspect of the IT infrastructure is virtualized and made available on a usage-based model. Public cloud service providers such as Amazon AWS, Google Apps, and Microsoft Azure offer platform and infrastructure services over the public internet. Similarly, products such as Eucalyptus, Enomaly, and Nimbus help organizations to build a private cloud within their own network.

According an IDC Survey, "By 2012, customers spending on IT cloud services will grow almost threefold, to $42 billion accounting for 9% of customer spending". [3] Though the 9% might look small, but by 2012, cloud services growth will account for full 25% of the industry's year-over-year growth. Adoption rates by SMBs are quite strong and are expected to fuel the cloud growth further.

Consolidation and Virtualization as a Strategy
Virtualization is a change-agent and will change the way IT has been operating over the years. Yet, the benefits and value of virtualization can't be realized overnight, but over a period of time. It should be viewed as a long-term strategy rather than a quick win. Virtualization has become one of the "de-facto" strategies for IT optimization, transformation initiatives, in any organization - small, medium or large alike.

Virtualization as a Strategy

Best Practices

  • View virtualization as a strategy to achieve the IT objectives and not just as another tool
  • Align IT projects with virtualization and re-use - maximize returns
  • Avoid virtualization-silos
  • Club virtualization alongside of consolidation and IT optimization initiatives

When Not to Virtualize?
Though virtualization provides a host of benefits, it also comes with its own share of concerns and disadvantages. It is prudent to avoid virtualizing resources under certain circumstances. These include:

  • Migrating applications that do not support virtualization
  • Resource-intensive and proprietary applications
  • Applications that makes heavy system calls
  • Real-time applications
  • Large databases

Virtualization Challenges
Realizing all the benefits is not easy. As with any other new technology being rolled out, implementing virtualization comes with its own set of challenges. It would be prudent for any organization to consider these challenges and impact on the business, before rolling out virtualization. Some of the key challenges are:

  1. Change in technology: Virtualization helps to move from a "siloed" to a more "shared and pooled" infrastructure. This is a big change from an operations and management perspective. The operations team must be prepared well ahead to get accustomed to the new technology. This also calls for a change in the process definitions. Successful virtualization implementations have gone hand-in-hand with a defined service management framework (ex. ITIL based). Hence a technology change management (TCM) process becomes very critical
  2. Performance overheads: Every virtualization solution has its own overhead. These overheads must be carefully identified, measured and accommodated during the design stage. Any organization that tends to overlook this aspect will invariably end up either not implementing the planned solution or even abort virtualization midway
  3. Time: A complete implementation of virtualization in an organization takes anywhere from 12 to 24 months. Though this timescale is not very high, but considering the rate of change of technology and the challenges faced in adopting the newer versions of the solution will pose serious change management issues. An organization should plan ahead in taking into account the changes of technology that might come in during the timeframe
  4. Application migration to the new environment: A key and critical requirement is to ensure that all the business applications run on virtual servers. Without extensive testing of the applications on the target environment, it's not recommended to migrate to the virtual environment. Though most virtualization software claims that compatibility is not an issue, proper testing has to be done prior to rollout. The cost of such incompatibilities would be much more than the benefits realized using virtualization.

There are a host of other challenges and obstacles - both technology and business - that you will encounter during the rollout. The success of the rollout depends on how quick and effective these challenges are addressed and remedial steps taken.

Change is inevitable. Virtualization is here to stay and is one of the key IT strategies that organizations of all sizes should adopt and embrace as part of the IT optimization journey. Apart from the cost benefits, virtualization brings in a host of other qualitative changes to the way IT has been managed and operated. Whatever the size of the infrastructure footprint, there is always a compelling business case for adopting virtualization.

Virtualization provides the business value and at the same time nothing is compromised - neither performance nor security. It's only natural for an organization to expect a mature IT solution to augment the ever-increasing business requirements. And that is exactly what virtualization aims to provide.


  1. http://webobjects.cdw.com/webobjects/media/PDF/Virtualization-Green-Data-Center.pdf
  2. Virtualization Unlocks Cloud Computing, Thomas Bittman, Gartner EXP. http://blogs.gartner.com/thomas_bittman/2009/08/11/virtualization-unlocks-cloud-computing/
  3. IT Cloud Services Forecast - 2008, 2012: A Key Driver of New Growth

More Stories By N Vijaykumar

Vijaykumar is a Principal Technology Architect with Infosys Technologies. He has 18 years of experience in the IT Infrastructure domain, both in consulting and implementation. His areas of expertise include Consulting, IT Strategy, IT Infrastructure Design, Technology Migration and Program Management. He is specializes in datacenter design, implementation and has written articles and presented papers in multiple technology forums.

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