Virtualization will own the enterprise

The week before last I attended the VMworld 2004 conference in San Diego. This event, hosted by VMware, surprised me. I got to the venue a little later than I had planned and went into the general session expecting to see maybe 300 or 400 people. There were about 1,600.

Now, I've been a big fan of VMware for some time because it makes it possible to run multiple copies of multiple operating systems on one machine. Indeed, there was a series of Gearhead columns on the product, which you could characterize as wildly enthusiastic.

VMware was gaining significant interest when EMC acquired the company last January, but little did I realize just how much of an impact VMware had made until I ran into these 1,600 fans.

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The week before last I attended the VMworld 2004 conference in San Diego. This event, hosted by VMware, surprised me. I got to the venue a little later than I had planned and went into the general session expecting to see maybe 300 or 400 people. There were about 1,600.

Now, I've been a big fan of VMware for some time because it makes it possible to run multiple copies of multiple operating systems on one machine. Indeed, there was a series of Gearhead columns on the product, which you could characterize as wildly enthusiastic.

VMware was gaining significant interest when EMC acquired the company last January, but little did I realize just how much of an impact VMware had made until I ran into these 1,600 fans.

Moreover the attendees weren't, as one vendor put it, "just from community colleges"; they were from Fortune-size companies, and about 20% came from overseas. Add to that about 30 partners, such as Dell, HP and IBM, and about 250 channel partners, and you can see something profound is happening.

I talked to several attendees, and it appeared two main issues were driving their interest. The first was server consolidation. Some customers have managed to reduce their server population by one-third.

In most enterprise environments server loadings are frequently far below platform capabilities. Running multiple virtual machines lets you take two or three servers running at 15% or 20% utilization and aggregate them onto one server that now runs at maybe 60%. Even better, you can move virtual machines from one physical server to another to readjust physical machine loadings.

Add to that the amount of rack space regained, the decreased power and cooling required, the reduced amount of hardware to maintain, and the fact that you can preserve the politics of server ownership within the organization, and you come up with a very compelling argument for VMware.

Then there is server management. Because of the architecture of VMware, activities such as provisioning, recovering and maintaining servers is vastly simplified. In short, virtual machine technology creates a more cost-effective enterprise infrastructure in just about every important category of service.

Among the partners at the event I saw a number of products that got me way overexcited: Softricity's SoftGrid is what I've wanted for years. It insulates Windows from applications and vice versa, and provides for applications the same vastly improved provisioning and management that VMware provides for operating systems. The combination of VMware and SoftGrid is amazing.

Another product that impressed me was Aurema. The company's product, ARMTech, provides workload and performance management to physical and virtual servers by controlling application scheduling through what it refers to as "business-based resource policy enforcement and provisioning." This allows not only for optimizing server workload but also provides resource monitoring for bill-back accounting.

Expect to see both of these products reviewed in future Gearhead columns.

Also in attendance was BMC Software. The company is engineering its Patrol network management systems to work with virtual machines. The products - Patrol Performance Assurance for Virtual Servers and Patrol for Virtual Servers - will provide capacity, performance and dynamic workload management for VMware systems.

So what are the implications of this explosion of virtualization?

Well, hardware vendors will find it increasingly difficult to differentiate their products because the performance of similar gear will only vary by a couple of percent. Moreover, as most servers are built from commodity components, the cost basis for a server is more or less constant between vendors, and virtualization removes your reliance on platform features that are supposed to add value.

So unless you need ultra-high-reliability systems, you're going to go for generic server hardware. In other words, hardware margins for enterprise sales will be razor thin. As if they weren't already.

More implications next week. Your conclusions to backspin@gibbs.com.

Read more about data center in Network World's Data Center section.