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Filing Information: April 2008, IDC #211938, Volume: 1

Enterprise Virtualization Software: Industry Developments and Models

I N D U S T R Y D E V E L O P M E N T S A N D M O D E L S

T h e F u t u r e o f V i r t u a l i z a t i o n : L e v e r a g i n g M o b i l i t y t o M o v eB e y o n d C o n s o l i d a t i o n

John Humphreys

I D C O P I N I O N

The server virtualization marketplace has been evolving rapidly over the past few

years and IDC has seen customer attitudes and stances toward virtualization mature

rapidly as well. As customers gain familiarity with the technology and as the

technology matures, organizations are leveraging virtualization to solve far more than

their server consolidation challenges. Increasingly, end users are using virtualization

to solve for disaster recovery, high availability, remote client and, ultimately,

managing the delivery of business applications to end users. These new emerging

use cases are the focus of this study and are predicated on the three key attributes of virtualization software, which include:

! Application isolation. The ability for applications to be encapsulated in

individual virtual machines and isolated from other applications residing on the

same host. This helps to maintain one "server," one app paradigm while still

utilizing the hardware and helps avoid all the application regression testing that

must occur in a shared OS environment. The application isolation attribute is

leveraged both in consolidating servers and in consolidating desktops onto

servers running in the datacenter (so called vdi).

! Virtual machines are files. As such virtual machines can be copied, backed-up,

replicated and moved like files. This in turn enables unique, easier, lower-costbusiness continuity practices and, as a result, allows customers to protect a

greater percentage of assets and thus limit the cost of downtime and lost

revenue associated with IT outages.

! Live migration. The ability to move a live running application from one host to

another enables virtual machines to move without any application downtime.

Today, the capability is largely used as a tool to address planned downtime, and

increasingly for capacity planning and load balancing across a pool of server

resources. Longer term, by pairing live migration with application monitoring

technology, customers will be able to manage the quality of service for entire

business services, whether those services are delivered via an SOA or a

traditional three-tiered architecture.

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©2008 IDC #211938 1

I N T H I S S T U D Y

This IDC study provides data on how virtualization is being leveraged within the

market today as well as data and IDC's opinions on how is currently evolving, the new

use cases being deployed, and a longer term view on how SOA and virtualization

could come together to help move the concept of cloud computing closer to becoming

a reality.

S I T U A T I O N O V E R V I E W

A lot has been written in recent years on virtualization and how it is changing IT. At

the highest level, virtualization technologies deliver on the key attributes of

encapsulation and mobility. For the most part, the industry and customers have been

focused on the encapsulation benefits and the cost reductions those benefits provide.

Going forward, IDC believes that, while there are still some use cases rooted in the

encapsulation attributes, the majority of new reasons to employ virtualization in the

infrastructure will be associated with the mobility of virtual machines.

While this study is primarily focused on the role of virtualization technologies in

implementing these new use cases, it does require firm grounding in the state of the

market today and the drivers behind the first wave of virtualization adoption.

As IDC has found over the last few years, virtualization technologies are largely

considered to be mainstream by customers. Recent surveys found that over 50% of

all customers are employing virtualization in support of production applications,

including components of some of the most mission-critical applications such as

supply chain management and enterprise resource planning. In fact, of those

employing virtualization in their organizations, on average they report that roughly one

quarter of their production applications are running on virtual machines. Within the

next 12 months, these same users expect nearly 50% of their applications will be

hosted on a virtualized server.

This phenomenon is driving companies to reconsider best practices when deploying

new applications, and a growing number of end users report that unless there is an

economic or technical reason, their stance is to deploy all new applications as a

virtual machine. This reversal in best practice is one of the indicators that IDC

believes, foreshadows the expanded role virtualization may have in addressing a host

of IT management and process challenges.

D r i v e r s o f V i r t u a l i z a t i o n 1 . 0

As has been well documented, the market for virtualization emerged out of the

downturn in IT spending following the bursting of the Internet bubble. At that time,

because organizations had been expanding their IT infrastructures so rapidly and

considering long-term consequences, a period of rationalization and consolidation

was extremely ripe. Companies that were consolidating whole datacenters found that

the number of servers under management in their IT shops had exploded — and it

was not uncommon for organizations that had hundreds of servers under



2 #211938 ©2008 IDC

management to now find that they were managing multiple thousands of devices and

that the IT build out and a trend toward decentralized IT amplified each other.

Rolling this up to a market level, IDC has found that by 2010, if these trends continue

unabated, there will be approximately 41 million servers installed in customer sites

worldwide. This marks a 700% increase over the 15-year period from 1996 to 2010.

At the same time, the drivers for this explosion made tremendous sense when looking

at each investment from a tactical standpoint. The first driver for this explosion in

systems is the rapid expansion in applications that IT needs to host. Today, there is

nary a business process or project that is somehow supported by IT and one, two or

even a half a dozen servers. At the same time, the mandate has been to take out as

much cost as possible so each new project is scrutinized to see if it would support an

IT investment. This directly led, in combination with new technologies emerging into

the market, to buyers gravitating toward lower cost systems based on the x86

processor. These systems were and continue to be priced at orders of magnitudes

lower than the more centralized high-end systems favored 20 or more years ago.

The gravitation toward low-end x86 servers has gotten to the point whereapproximately 90% of all systems sold are today based on chips from Intel and AMD.

This sort of sea change was also made possible by the wholesale support of the

Windows operating system for a majority of applications that businesses need to run.

The downside of Windows applications is that historically running more than one

application on the OS has led to conflicts in the resource or DLL, which in turn has led

to system instability. Rather than spend significant time, effort, and energy testing and

regressing applications so they would work well in a shared OS environment, the best

practice becomes to only deploy one application per server.

The result of this one application per system paradigm has been a tremendous

underutilization of server resources. IDC estimates that, on average, less then 10% of the total server capacity is utilized over a period of weeks or months. Again, taking

this to a market level, this means that today there is roughly $140 billion of server

capacity sitting idle in the marketplace. This is equivalent to roughly a three-year

supply.

The encapsulation benefits of virtualization software enabled customers to harness

the growing power of x86 servers and put a greater percentage of the capacity they

purchased to productive use. At the same time, by running on an isolated OS, this

allowed them to do so without having to do the expensive regression and testing they

would have incurred in a shared OS deployment.

Customers also found that by reducing the number of servers, they also saved interms of power and cooling costs as well as real estate expenses associated with

maintaining enough datacenter space to house these systems. To put some metrics

to this, customers report on average cutting their facilities' costs by about 20% post

virtualization. This holds the potential to return huge amounts of capital to the

customers as IDC has found that, in aggregate, customers spend $29 billion annually

in powering and cooling their servers. Additionally, we have worked with others that,

through virtualization, have been able to extend the life of the facility — taking



©2008 IDC #211938 3

advantage of the time value of money and pushing out the multimillion dollar capital

outlay associated with building a new datacenter.

Finally, in this first phase of virtualization adoption we are seeing that the technology

has the potential to significantly alter operating cost structure for managing IT. IDC

has found that in the "physical world" on average, most organizations employ one IT

professional for every 20–30 servers installed in the datacenter. In the virtual world,

discussions with early adopters has found that the same IT professional can manage

60–80 virtual machines — with some customers reporting ratios of up to 200 to 1.

Being able to address the operational costs, which drive between 70–80% of total

company spending in the realm of IT, is one of the tremendous opportunities for

virtualization technologies to change the economics of IT. The other major opportunity

is centered on mitigating lost revenue attributable to system downtime. This

component of the future of virtualization will be the main thrust of this report.

F U T U R E O U T L O O K

T h e F u t u r e o f V i r t u a l i z a t i o n : S o m e F o r k s i n

t h e R o a d

As it was stated previously, the two key attributes of virtualization are, at the highest

level: encapsulation and mobility. To date, the thrust of adoption has been on

leveraging the encapsulation benefits and we have seen virtualization first deployed

in test and development scenarios (including developer workstations), then in the

migration of unsupported NT4 applications, and finally into new applications being

deployed in production.

In this manner there is a well-defined path going forward. The industry has found a

very compelling and powerful "hammer" and now it can go out and look for "nails."

One area that has garnered much attention in the need for consolidation is the

desktop computer. Utilization of desktops is even lower than servers and the

environment is even more distributed — driving even bigger support costs and

management headaches. Finally, the power cost savings or "green" benefits of

consolidation of desktops could dwarf that of servers given that IDC estimates that

there are roughly 500 million corporate PCs deployed around the globe today.

A few years ago, a few enterprising customers began levering virtualization for just

such an exercise. They paired virtualization together with Microsoft's Remote Desktop

Protocol (RDP) to create a hosted desktop solution (see Figure 1).

Today, hosted desktops or "vdi" as it is becoming known, is clearly the next step for the consolidation of IT infrastructure. That said, there are still some hurdles that must

be overcome — first and foremost is the economics of vdi. These solutions still run at

a price premium relative to traditional distributed desktops. The two main "culprits"

are storage costs and operating system expenses

From a storage perspective, the price difference between locally deployed 40–80GB

hard drive and the same volume of space on a SAN is significant; hence, a driver of



4 #211938 ©2008 IDC

why customers are also looking at lower cost network storage options such as iSCSI

or NAS when considering moving to hosted desktops. Additionally, by consolidating

the local hard drive data onto networked storage, customers also have the ability to

consolidate multiple copies of applications and operating systems that are typically

replicated locally. IDC estimates that 15–20% of most local hard drives is space

dedicated to OS and application copies. Given these centralized streaming or

dynamic network boot capabilities along with the strides being made in lowering cost

per gigabyte, IDC does believe that storage costs for client consolidation will

eventually no longer be an economic challenge.

The other major cost hurdle is with operating systems. Today, to legally deploy a

virtual Windows desktop a customer must either be a software assurance customer or

(delete) and purchase a special license that Microsoft terms VECD or it must

purchase a retail copy of Windows. As a lot of early adopters are either not software

assurance customers or have had difficulty navigating the VECD licensing terms; they

have opted for the retail approach. This has the effect of adding approximately $300

to each vdi seat a customer deploys, which in turn has priced vdi solutions above that

of traditional desktops (somewhere around 20–30% higher).

As a result, the solution has remained a niche play and customers that are deploying

solutions are doing so for primarily compliance or data security reasons. Secondary

drivers of purchasing include end-user productivity gained through increased uptime

as well as better desktop management processes for hosted desktop solutions.

Another hurdle that vdi will need to overcome if it is to be as broadly adopted as

server virtualization is the performance issue. Unlike server virtualization where

performance impacts are negligible for the majority of applications, desktop

virtualization is reliant upon a remote graphics protocol to deliver the user interface to

the screen in front of the user. Today the most commonly deployed remote graphics

protocols are Microsoft's RDP and Citirx's ICA and while much better than just a few

years ago, the performance does lag that of a local system, especially when trying to

using graphics-intensive applications.

Again, as with storage, much is being done in the industry to mitigate the

performance issue. Thin client vendors have begun to embed graphics chips for local

rendering in the point-of-presence devices. Microsoft, in addition to the improvements

coming in RDP v6, recently purchased Calista to handle graphics virtualization on the

server. In addition to these incremental approaches to remote graphics improvement,

there are a host of net new activities to improve performance. These include work in

kernel-based virtualization by Quamranet to drive, among other things, a new protocol

it terms SPICE — Simple Protocol for Independent Computing Environments. There

is also work being done by an industry consortium called Net2Display being run out of

Columbia University as well as some other protocol developments from the likes of

nComputing and others.

And while this does seem like plumbing and not as sexy as policy-based

management or service-oriented architectures, because it is so critical to the

successful enablement of vdi, a fast, efficient, simple, and hardware-independent

approach does seem like a major gating factor in adoption and hence a valuable

piece of the solution.



©2008 IDC #211938 5

Finally, in the realm of challenges to vdi adoption are desktop trends and cultural

resistance to change. Currently, vdi solutions are applicable only to those with

desktop systems as a user must be connected to get access. Too much of the

average laptop users' needs require off line access — which today is not handled

elegantly at all. From a total available market perspective this reduces the TAM from

roughly 500 million systems to 350 million — but the trend toward deploying more

laptops will likely reduce this further with every refresh cycle. IDC also believes there

will be a challenge getting workers to overcome the "my PC" and concerns about

monitoring the activity of workers running on vdi. These challenges are likely to linger

much longer then the hurdles associated with the economics and performance of the

solution — but if the costs don't at least reach parity with that of traditional desktops

or the performance lags that of a local solution, these cultural concerns will be mute.

Beyond servers and clients, there are a host of different areas companies are looking

to enable with the isolation benefits of virtualization. These run the gamut from

network applications that can now be scaled virtually instead of through hardware-

based appliances through to consumer plays in smartphones, set-top boxes, gaming

and even televisions. Most of these are looking to virtualization as a means to reduce

bill of materials costs and increase product margins.

F I G U R E 1

B e y o n d S e r v e r C o n s o l i d a t i o n

Virtualization for Server

Consolidation

# Server consolidation# Extend the datacenter life# Go “Green”

Virtualization for Client

Consolidation

#“Oh I could’ve had a V8”# Virtual clients# Go “Green”

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2006 2007 2008 2009 2010 2011

R

e v e n u e ( $ M )

Desktop virtualization Application virtualization

Presentation virtualization

Server HostedVirtual Desktops (vdi)

RemoteInteraction

D a

t a c e n

t e

r

E x e c u t i o n

S t o r a g eIP

NetworkIP

Network

Unique Client OSs

Virtualization for Server

Consolidation

# Server consolidation# Extend the datacenter life# Go “Green”

Virtualization for Client

Consolidation

#“Oh I could’ve had a V8”# Virtual clients# Go “Green”

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2006 2007 2008 2009 2010 2011

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e v e n u e ( $ M )



$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2006 2007 2008 2009 2010 2011

R

e v e n u e ( $ M )



Server HostedVirtual Desktops (vdi)

RemoteInteraction

D a

t a c e n

t e

r

E x e c u t i o n

E x e c u t i o n

S t o r a g e

S t o r a g eIP

NetworkIP

Network

Unique Client OSs

Source: IDC, 2008



6 #211938 ©2008 IDC

The Other Fork: Virtual Machine Mobility

In addition to the consolidation benefits of virtualization, there appears to be a whole

host of new use cases based on the mobility of virtual machines. In aggregate, these

use cases are generally focused on reducing downtime and increasing the agility of

IT. These include how virtualization can help customers avoid planned downtime,

protect a greater percentage of their IT assets in case of disaster, reduce unplanneddowntime due to hardware and eventually application and OS failures, and ultimately

help to deliver on the concept of service-oriented computing.

In terms of virtual machine mobility, there are essentially two means in which a VM

becomes "mobile." First, virtualization software has the effect of decoupling the

application stack from the underlying hardware. It does so by essentially turning a

server into a file. As such a VM can now be copied, backed-up, replicated, and

moved like a file. This in turn opens the door to bring low-cost business continuity to

the rest of the IT environment.

In addition to turning servers into files, a growing number of the virtualization software

providers have the ability to do live migrations — moving a live running VM with OSand application from one host to another without any downtime. Today, this capability

is being used to address planned downtime needs and IT professional "quality of life"

issues such as doing hardware swaps or upgrades during normal business hours

without having to take down the application. Going forward, the technology can be

leveraged to created pools of computing capacity against which applications can be

run and further out, as a technology that enables SOA and true "cloud computing."

Business Continuity: Driv ing Interest

Increasingly, customers are beginning to recognize that IT is no longer a series of

unrelated systems each providing a discrete business function or application. Rather,

IT itself has increasing become one whole interconnected "system" and like

interconnected infrastructure systems such as communication or energy delivery, the

failure of one piece can and typically does have a cascading impact on the whole.

As one customer recently said:

[In a] traditional [DR model] you buy a cold or warm spare and you stick it at the

other datacenter where it gathers dust because the odds of it being used are very

low and you forget to update it. It has old firmware, old drivers, or may have been

'acquired' for use elsewhere. And then when you have to use it, all hell breaks

loose.

As a result, IDC finds that partners, the government and even internally through

SLAs, business units are requiring more disaster-tolerant and generally available ITsolutions. For IT to protect the "great unprotected masses" without dramatically

increasing the budget will require innovators to apply new technology in a different

way to satisfy both uptime and budgetary pressures. The trajectory of adoption for

business continuity is illustrated in Figure 2.

All of this indicates, in the words of Clayton Christiansen, generally business

continuity is an "underserved job." By undershot Dr Christiansen and others at



©2008 IDC #211938 7

Innosight describe a job or process that "is important to customers and have yet to be

addressed appropriately."

IDC believes virtualization is a technology that is extremely well positioned to benefit

from this awakening. In a recent worldwide survey of approximately 400 customers,

business continuity (BC) ranked second behind consolidation as the reason they are

implementing virtualization (multiple responses allowed). Interestingly in emerging

markets, customers were more likely to be using virtualization software to drive BC

then for consolidation. Additionally, the midmarket (100–1,000 employees) was as

likely to use virtualization software for BC as consolidation (see Figure 3).

As an example of this, Gannett Publishing has taken very effective use of this

capability. The company implemented virtualization across both its primary as well as

subsidiary sites. As a result, the company has had two key benefits. First, the

company was able to consolidate DR services into its two primary datacenters.

Instead of having to maintain a third site to act as a cold backup, they now use each

primary site as a backup to each other.

Additionally, they have been able to offer DR as a service to its subsidiaries. This wasput to dramatic use by some local and regional papers in Louisiana when hurricane

Katrina hit in 2005. As the story approached, because the VMs and data had been

replicated offsite, Gannett was able to migrate services for these properties to the

Washington DC area and once the storm had passed and the local infrastructure was

back up and running, the company migrated applications back to the primary sites —

all without any loss of service.



8 #211938 ©2008 IDC

F I G U R E 2

B u s i n e s s C o n t i n u i t y : L e v e r a g i n g V i r t u a l M a c h i n e F i l e s

Virtualization for DR

# Disaster recovery

Virtualization for Application

Availability# Alternative to clustering# Unplanned downtime# VM/OS/application awareness

Virtualization for InfrastructureAvailability# Auto restart of VMs

– Based on HV or hardware failures

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t e r r e c o v e r y

Capability

Priority

Value“Readiness” Map

Virt. License Revenue

-

500

1,000

1,500

2,000

2,500

3,000

2006 2007 2008 2009 2010 2011 2012

Consolidation File mobility Live migration


# Disaster recovery






# Disaster recovery





S e r v

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Capability

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D i s a s


Capability

Priority


Virt. License Revenue

-

500

1,000

1,500

2,000

2,500

3,000

2006 2007 2008 2009 2010 2011 2012

Consolidation File mobility Live migration

Source: IDC, 2008



©2008 IDC #211938 9

F I G U R E 3

A V a r i e t y o f D r i v e r s : B u s i n e s s C o n t i n u i t y b y M a r k e t s an d

C o m p a n y S i z e

Percent of Respondents Ranking Capability Very Important

0%

5%

10%

15%

20%

25%

30%

35%

40%

Test and dev. Server

consolidation

Business

continuity

Resource

pooling

VDI Mainframe

migration

Midsize Enterprise

0%

5%

10%

15%

20%

25%

30%

35%

Test and dev. Consolidation Businesscontinuity

Resourcepooling

VDI Mainframemigration

Developed markets Emerging markets

Companies under 1,000 employees are as likelyto employ virtualization for business continuityas consolidation

Organizations in emerging markets are morelikely to employ virtualization for businesscontinuity then consolidation

Percent of Respondents Ranking Capability Very Important

0%

5%

10%

15%

20%

25%

30%

35%

40%

Test and dev. Server

consolidation

Business

continuity

Resource

pooling

VDI Mainframe

migration

Midsize Enterprise

0%

5%

10%

15%

20%

25%

30%

35%

Test and dev. Consolidation Businesscontinuity

Resourcepooling

VDI Mainframemigration

Developed markets Emerging markets

Companies under 1,000 employees are as likelyto employ virtualization for business continuityas consolidation

Organizations in emerging markets are morelikely to employ virtualization for businesscontinuity then consolidation

Source: IDC's Virtualization Tracker Survey , 2007–2008

Beyond DR: High Avai labi l i ty for the Masses

The other area virtualization may help change the calculus of IT is in minimizing the

revenue lost because of system downtime. Said another way, virtualization may be

able to drive new revenue by making applications more highly available.

An IDC study from 2003 found that 44% of the nearly 1,400 customers protected

through clustering less than 10% of their server assets and on a weighted average

basis, this U.S. study found that on average companies were protecting roughly 19%

of their servers with clustering technology.

Most of those participants found tremendous value in clustering for availability but

they also cited ease of use as the driving reason they weren't protecting more of their

servers. Top reasons include difficulty in setting up, configuring, and maintaining

clustered servers, application compatibility, and finding the people with the right skill

sets (see Figure 4).

As a result, most customers protect only the most mission-critical applications against

both disasters as well as less widespread outages.



10 #211938 ©2008 IDC

To understand the cost of downtime implications of this approach at a market level,

IDC has created a model that distributes the installed base of servers across a range

of availability levels. These levels include: AL0 — which is essentially an unprotected

system, AL1 — which employs technologies like RAID or application logging to

ensure data availability, AL3 — which can be thought of as a traditional cluster for

both data and application availability, and AL4 — which is a fault-tolerant system.

Based on data from the clustering study and from IDC storage group, we believe

about 35% of all installed systems can be classified as AL0; 55% as AL1; 8% as AL3

and the remaining systems as AL4. Applying uptime estimates that range from 99%

for AL0 systems to 99.999% for systems classified as AL4 and combining that with

estimates of planned versus unplanned downtime share and hourly downtime costs

which was gathered from a 2001 study by Contingency Planning Research, which is a

Division of Eagle Rock Alliance, IDC estimates that server downtime cost

organizations roughly $140 billion in lost worker productivity and revenue in 2007.

The vast majority of these losses (over 75%) are estimated to come from minimally or

unprotected systems — which are largely thought of as "low strategic value." The cost

of downtime to organizations has been trending up in recent years as the footprint of

IT grows and as individual systems become interconnected and the IT infrastructure

of a company increasingly becomes one big system. As a result, the impact of

downtime is expected to only increase in subsequent years. IDC estimates that at the

current pace of growth, downtime will cost organizations worldwide over $220 billion

by 2011 (see Figure 5).

Intuitively, these estimates makes sense as it is roughly the same size as the cost of

managing and administrating IT and organizations are constantly having to balance

minimizing downtime costs with labor and technology expenses. While it is certainly

possible to drive downtime to zero the cost to do so would be tremendous and grossly

outweigh the value to the organization.

This use case in terms of near to midterm opportunities for virtualization, is leveraging

the technology to bring high availability to the masses. As was stated previously, the

vast majority of applications are not deployed in a HA environment because to date

solutions such as clustering have been perceived as complex, hard to set up, and

difficult to manage.

To address unplanned downtime today virtualization companies are providing an

automatic restart capability if the hypervisor or host go down for whatever reason. In

these scenarios, a host failure triggers the rebooting of the VM on other virtualized

hosts in the datacenter.

While this is a good start to trying to combat the lost revenue associated with

unplanned outages, ultimately knowing what is happening at the hypervisor and

hardware layers fails to deliver customers what they most want — application-level

awareness and action. In this way, current HA solutions in the virtualization market

are "blind from the waist up." That is, they do not know what is happening inside the

virtual machine. They do not know if the operating system or application has stopped

working, and that is ultimately what IT professionals charged with delivering

application services most care to know.



©2008 IDC #211938 11

One issue hampering the delivery of application-level HA is that there needs to be

application knowledge, which in turn means being able to collect data from every

application in a company's portfolio. Building the connectors to provide this level of

awareness is a daunting task. That said, there is a lot of work going on today to close

this awareness gap while getting around the need to have application knowledge for

the entire portfolio. Notably, Marathon Technologies has announced a solution to

provide system fault tolerance to virtualization. Its solution, which can also deliver

basic host-level restarts and component-level fault tolerance, relies on a virtual

appliance that sits on the hypervisor and essentially recreates a clustered physical

environment in the virtual world. This appliance inspects I/O traffic coming through the

hypervisor and if it notices an absence of activity can take action (i.e., restart all the

VMs on a host, switch over to a hot standby, switch over to a full lock stepped virtual

machine).

IDC, however, believes there is an additional opportunity between maintaining a hot

standby and automatic restarts at the host level. By inspecting traffic through the

hypervisor, virtual machine Managers have the ability to tell if a specific VM is active

or not and by assuming that a lack of activity for a certain period of time equates to a

fault in the VM, that specific VM can be restarted — either on the same host or a new

one. What this solution lacks in elegance it makes up for in applicability. Because it is

not reliant on detailed application or even OS information, it can be widely

implemented — something that is critical if trying to bring HA to the vast majority of

systems that currently go unprotected.

F I G U R E 4

C h a l l e n g e s t o C l u s t e r i n g : E a s e o f U s e

Data migration

Training/learning period

Budget constraints

Application compatibility

Support not available

Lack of qualified IT staff

Too difficult to manage

Configurations

Getting it operationalNo problems

0

5

10

15

20

25

30

35

Set-up Compati-bility

Mainte-nance

Cost/value

Noproblems

Skills

(%)

Data migration

Training/learning period

Budget constraints

Application compatibility

Support not available

Lack of qualified IT staff

Too difficult to manage

Configurations

Getting it operationalNo problems

0

5

10

15

20

25

30

35

Set-up Compati-bility

Mainte-nance

Cost/value

Noproblems

Skills

(%)

Source: IDC, 2008



12 #211938 ©2008 IDC

F I G U R E 5

C o s t o f D o w n t i m e , 2 0 0 2 – 2 0 1 1

Cost of downtime

Mgmt. spendingCombined P&C

Server spending

0

100

200

300

400

500

2002 2003 2004 2005 2006 2007 2008 2009 2010

10

15

20

25

30

35

40

45

50

Installed BaseUnits (M)(US$B)

Capex

Opex

Lostrevenue

Cost of downtime

Mgmt. spendingCombined P&C

Server spending

0

100

200

300

400

500

2002 2003 2004 2005 2006 2007 2008 2009 2010

10

15

20

25

30

35

40

45

50

Installed BaseUnits (M)(US$B)

Capex

Opex

Lostrevenue

Capex

Opex

Lostrevenue

Source: IDC, 2008

VM Mobility: Live Migration

Recapping where the industry is today with respect to leveraging virtual machine

mobility, IDC sees two primary use cases gaining acceptance from customers. The

first, leveraging virtualization as a tool to reduce or eliminate planned downtime takes

advantage of the live migration capabilities. The other use case is disaster recovery

and here customers are taking advantage that with virtualization servers are

expressed as files and these files can be copied, replicated, moved, and snapshot

like any other file.

The attitude of customers is shifting toward mobility as well. In 2005, when IDC

surveyed virtualization customers about their motivations for deploying the technology

in their organizations, only about 5% of the responses involved use cases that

required mobility. When IDC repeated that survey 12 months later, the percentage

that wanted to leverage the mobility aspects of the technology ballooned to

approximately 21% of those surveyed. The use of live migration with customers has

corresponded to the rise in these new use cases. In 2005, just over 25% of those

surveyed reported using the technology. This rose to nearly 45% in 2006 and over

60% in 2007.

Going forward, mobility is seen as a defining feature that will enable the technology to

move beyond just a tool for consolidation. From that perspective IDC believes there

are two emerging use cases on the adoption horizon: virtualization as a tool for

capacity planning and as a solution in delivering service-oriented computing (see

Figure 6). Both of these use cases leverage the live migration capabilities in

combination with insights into the health or utilization of the hardware and application

layers, respectively.



©2008 IDC #211938 13

Essentially, these use cases are the same from a virtualization technology level,

rather it's how far up the stack instrumentation occurs that provides the unique

difference. In the capacity planning use case, rather than trying to estimate server

capacity at the host level, users can treat multiple hosts as a single pool of resources

and VM loads can be balanced across the pool based on levels of utilizations of

processor, memory, and I/O as well as policies set up by the user. These rules could

pertain to individual VM requirements and host-level utilizations — both from a

maximum and minimum perspective. Users are also able to apply affinity and anti-

affinity rules to guarantee that, in the case of affinity rules, two or more VMs are

always hosted on the same machine and with anti-affinity rules, the two or more VMs

never reside on the same machine (two DNS servers for instance).

Companies such as Natixis Capital Markets have already begun deploying such

architectures and have reported great success with over 4,000 individual moves

without incident over roughly a six-month period.

This approach to capacity planning means that IT architects and capacity planners

are freed up from having to "forecast" or guess at the capacity needs of any given

application they deploy, which in turn will likely result in less of the dramatic over-

provisioning of resources that has gone on historically. Rather, they can plan at the

resource pool level, which, because of the diversification of load, makes forecasting

capacity needs much easier and more straightforward. Also, instead of purchasing

excess capacity "insurance" in the form of additional servers for each application,

they can overprovision at the pool level, knowing that at any given moment in time a

few of the applications may be experiencing demand spikes, but it would not likely

extend to all applications in the company's portfolio.

Conceptually, the idea is very appealing for those that have ever struggled with

planning for the rollout of a new application, but in practice there are still some

hurdles that must be overcome if the concept will have broad market adoption. First

and foremost is that, today, live migrations cannot cross subnet boundaries. This

means to benefit from the economy of scales this technology would provide the host

should have access to all subnets in the pool. Effectively, this creates a situation in

which the customer is giving up network security through isolation for flexibility.

To address these concerns companies like Cisco with its Topspin acquisition, 3Leaf

Networks, Xsigo and others are working to bring I/O virtualization to the fore to deliver

both secure isolated networks and host pooling that allows migrations to occur across

larger and more diverse resource pools and applications.

While the capacity planning use case is intriguing from a technology perspective and

generally the capabilities exist to apply the concept today, the value to the customer

is of question. Unlike DR, load balancing across a pool of servers in an automated

way will likely feel risky for the vast majority of end users. The analogy would be

inventing the car that drives itself. The first users are likely to be risk takers and even

these folks will want to have their hands on or near the wheel. For some the reward

(reclaiming hours of their day) may be worth the risk, especially with successive

iterations of the technology — the same will be most likely be true with resource pools

and making capacity planning easier may simply not be enough of an incentive to

take the risk.



14 #211938 ©2008 IDC

F I G U R E 6

F u t u r e U s e C a s e s o f L i v e M i g r a t i o n

Virtualization for

Hardware Maintenance

#Planned downtime

Virtualization for Policy-

Based Automation# Service-oriented computing# IT in the “cloud”

Virtualization for

Capacity Planning

# Pool of resources# Balance load based on

–Hardware utilization –Application requirements

Use of Live Migration

Yes No

27%44%

73%

56%

0%

20%

40%

60%

80%

100%

2005 2006

63%

37%

2007

Revenue Share, 2012Revenue Share, 2012Revenue Share, 2012Revenue Share, 2012

Filemobility

42%

Livemigration

42%

Isolation

16%

Virtualization for

Hardware Maintenance

#Planned downtime

Virtualization for Policy-

Based Automation# Service-oriented computing# IT in the “cloud”

Virtualization for

Capacity Planning

# Pool of resources# Balance load based on

–Hardware utilization –Application requirements

Use of Live Migration

Yes No

27%44%

73%

56%

0%

20%

40%

60%

80%

100%

2005 2006

63%

37%

2007

Revenue Share, 2012Revenue Share, 2012Revenue Share, 2012Revenue Share, 2012

Filemobility

42%

Livemigration

42%

Isolation

16%

Filemobility

42%

Livemigration

42%File

mobility42%

Livemigration

42%

Isolation

16%

Source: IDC, 2008

Server Virtual izat ion and the Impact on SOA

This last phase in the application of live migration marks a long term and somewhat

speculative outlook on how the technology may develop to deliver what could be

termed service-centric computing.

The belief is that today both SOA and virtualization are powerful forces shaping the

future of IT. SOA is fundamentally rearchitecting how business applications are

delivered — moving from one of discrete applications to one of componentized

services. In the same manner, virtualization is changing the way in which

infrastructure is delivered — moving from static and hard wired to dynamic and

extremely flexible. IDC believes, by bringing together SOA and virtualization, the

industry has the opportunity to execute on that long-held vision in which IT

professionals can shift the delivery of infrastructure and applications over to

management systems that are linked to policies and service levels that are set by the

business.

The beginnings of this evolution can already be seen in how application services are

delivered. Historically, application servers incorporated a hierarchical application

stack that went from operating system, to Java Virtual Machine (JVM) to application

server software and finally to a series of applications hosted in containers. The upside



©2008 IDC #211938 15

was one software stack; the downside was the applications were not isolated from

each other and one failure in the stack could bring down multiple applications.

With virtualization, this architecture could be altered so that each application was

maintained in a virtual machine and each VM had an OS, JVM, and copy of app

server software. While this works wonders to deliver better isolation of applications, it

also has driven the creation of more images and software stacks to patch, update,

and manage.

More recently, BEA has introduced LiquidVM, Virtual Edition and Liquid Operations

Control. More recently, BEA has introduced the idea of an application server

appliance with the LiquidVM, Virtual Edition, and Liquid Operations Control. Here

instead of a separate OS, JVM and App server, the stack is combined into a tuned

and optimized appliance that supplies all these services. Customers can deploy their

applications right on top of this appliance and it greatly reduces the number of

software components IT has to manage.

This architecture is very similar to that of SOA as services are run in an environment

just as applications are run on an appliance. Clearly, the big leap will be indeconstructing applications into the base services and this will likely be more than a

five-year process, but whether truly componentized applications become a reality or

not, the combination of application environment sensing and the control infrastructure

control instantiated through virtualization is a powerful concept that could lead to IT

managing delivering services rather then focusing on managing infrastructure (see

Figure 7).

If the industry can devise a way to link applications to represent individual business

processes, the concept of service-oriented computing remains feasible as the

management of the infrastructure can be linked to monitoring of the application or

service environment and measured against policies and service levels set by the

users.

This really does represent a marriage of best-in-breed — application monitoring tools

provide detailed data on the health, performance and demand for a specific business

application or service while infrastructure management tools such as live migration

implement the moves, adds, and changes of individual VMs hosting the service.

This vision for policy-based automation of the scaling, moving, resizing, provisioning

and decommissioning of virtual machines in support of application service levels is

highly speculative and only roughly defined. Even more of a challenge is that for such

a vision to come to fruition would require unprecedented collaboration in the industry

and hence is why service-oriented computing while this scenario in the future of

virtualization still be years from broad market acceptance and likely look very differentonce all the vendor wrangling and positioning is complete.

That said, if a version of this concept actually makes it successfully to market, it is

only a small step from here to moving IT into the cloud. Here individual services hold

no special significance or proprietary value add for the customer. It is only through the

combination of these services that one is able to deliver a business application and

the unique advantage comes not from the individual services but from how they are



©2008 IDC #211938 17

This is enabling new models around disaster recovery, high availability as well as

combined with SOA, a means to deliver true service-oriented computing.

All that said it is important to keep in mind what virtualization technologies can do well

and where more work needs to be done.

The benefits of virtualization include:

! Great tool for server consolidation

! Helps reduce power and cooling costs

! Can change the server to admin ratio

! Consolidation works for more than just servers

! Imparts flexibility on the infrastructure and makes provisioning much faster

! Works well for hardware upgrades

! Homogenizes all the servers

! Enables BC for the "rest of the datacenter"

! Is creating whole new business models and value chains

! Lays the foundation for Policy Based Automation

Challenges that will need to be overcome include:

! Not for all applications — I/O-intensive apps still pay an overhead

! Doesn't consolidate images — change management still an issue!

! Speed is not a substitute for intelligence — customers can move too fast

! No application awareness — policy-based automation is not yet an option

! DR is reliant on app log shipping or replication software — better coordination

needed

! More cost-effective storage needed

! Creates more mission-critical servers

! Mobility impacts on security still poorly understood

! Network mobility is lagging behind

! IT, Business Unit and Executive Team buy-in is required

There certainly are many ways to employ this technology today and with continued

refined from the vendors as well as continued experimentation and creative thinking



18 #211938 ©2008 IDC

from customers, IDC believes the application of the virtualization to the problems

faced by IT is only now just beginning to be developed.

L E A R N M O R E

R e l a t e d R e s e a r c h

! IDC's Software Taxonomy, 2008 (IDC #210828, February 2008)

! Worldwide System Infrastructure Software 2008 Top 10 Predictions (IDC

#209633, December 2007)

! Worldwide and U.S. High-Availability Server 2007–2011 Forecast and Analysis

(IDC #210096, December 2007)

! Customer Requirements in the Server Virtualization Marketplace (IDC #209247,

November 2007)

! Worldwide Operating Systems and Subsystems 2007–2011 Forecast Update

(IDC #209282, November 2007)

! Worldwide Virtual Machine Software 2006 Vendor Shares (IDC #208041 August

2007)

! Worldwide Virtual Machine Software 2007–2011 Forecast (IDC #208015 August

2007)

! SAVVIS Leverages Virtualization to Reshape Managed Services (IDC #206270,

April 2007)

! Nationwide: Leveraging Policy-Based Automation in a Virtual Environment (IDC

#204953, January 2007)

! Virtualization: 10 Questions with QUALCOMM (IDC #203501, October 2006)

! VMware: Virtualization 3.0 (IDC #202061, June 2006)

! Virtualization and Change and Configuration Management Software (IDC

#202128, June 2006)

! Microsoft Acquires Softricity for Application Virtualization and Management (IDC

#201844, May 2006)

! Lowering the Barrier to Entry: VMware Offers Server Virtual Machine Product for

Free (IDC #34885, February 2006)

! IDC's Top 10 System Infrastructure Software Predictions for 2006 (IDC #34837,

February 2006)

! Success and Disruption: The Broader Impact of Open Source Software (IDC

#DR2006 _3CAG, February 2006)



! Worldwide Virtual Environment Software 2002–2004 Competitive Market Final

View (IDC #34419, November 2005)

C o p y r i g h t N o t i c e

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