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Running a business comes with its share of impediments, which range from bulging costs to data management, workforce demands, pressure to be environmentally conscious, and security issues. Virtualization—which was first developed in the 1960s and gathered pace in the 1990s following the introduction of the x86 platform (an architectural platform with a set of instructions for virtualization) for server virtualization—has proved to be a panacea for most of the problems mentioned above. Virtualization refers to the sharing of resources in a virtualized environment. Virtualization helps in delivering more value while ensuring that costs are within limits. Other benefits, such as lower carbon emissions due to reduced hardware, lesser heat emissions, simplified administration, disaster recovery, better data management, and improved business agility and flexibility, make virtualization an arrow in an organization’s quiver that can be used to achieve its business objectives.

Virtualization is making inroads into various systems, such as: servers, desktop, network, and storage, with the result that an increasing number of companies are incorporating virtualization architectures in their systems. However, not everything is in favor of virtualization—there are odds against it too. In a virtualized environment, a single hardware failure affects multiple virtualized servers and systems. Moreover, because of the sharing of resources, systems might slow down at times due to the automatic allocation of resources to a specific application. Other pertinent issues include licensing issues, shortage of skilled manpower and intense training requirements, complex organizational structures, difficult capacity planning (determining the right size of hosting hardware is a tricky job in a virtualized environment), and limited vendor support.

Despite these challenges, virtualization is still seen as a viable strategy for cost reduction and better management of resources. Even on the vendor side, there is stiff competition. Other than big names such as VMware, Microsoft, XenSource (now Citrix), and Cisco, it is believed that many emerging players are making inroads, upsetting the apple cart for many an established vendor. Many players are trying to capture niches by specializing in specific aspects of virtualization; for instance Kidaro, Provision Networks, and XDS are operative in desktop management; Insystek, Scalent Systems, and ToutVirtual in virtual server management; and, Marathon Technologies in disaster recovery. After initiating virtualization, these players help in managing virtualized applications by providing various services that extract extended utilization and increased benefits from virtualization. Therefore, virtualization also has a spill-over effect, creating other related industries; the virtualization security market is one such emerging market.

Analysts note that a fall-out of this intense competition is that virtualization products are getting commoditized. Innovation and enhanced services will be the key differentiators. An example of that is Microsoft’s recent launch of its new product offering Hyper-V (beta version), a virtualization system for x64 systems (superset of x86 systems, an architectural platform for virtualization). Hyper- V allows multiple operating systems such as: Windows, Linux and others, to run on a single server, it creates dynamic, scalable and integrated platform for better management of both virtual and physical resources. Inorganic growth strategies and consolidation trends continue to exist in the virtualization market—HP’s acquisition of Opsware and Citrix’s takeover of Xen are a couple of examples. With consolidation that leads to the pooling of different firms’ competencies, along with innovation and developments by each player, the virtualization market is set to reach dizzying heights. Owing to increased adoption by companies, irrespective of their size across geographies, the global virtualization market looks far from maturing, at least from the demand side.

Virtualization refers to creating an environment where one computer/system does the work of multiple systems by resources with the help of software. A single virtual system aids multiple applications and operating systems with the help of a virtual environment. Virtualization reduces hardware requirements, thus saving on fixed as well as operating costs. Reduced floor space and cooling costs, better data management, better disaster recovery, and remote access are major advantages that make a strong business case for virtualization.

Virtualization has evolved over the years and today supports myriad applications for a number of functions, from desktop and server, to storage, networks, and infrastructure.

Demand for virtualization is growing steadily and virtualization is witnessing increased adoption by companies across sectors. Growing demand is fuelling competition. VMware, Microsoft, Citrix, Parallels, and Virtual Iron, among others, are fighting the battle to win market share. Because of long-term benefits, even small firms are willing to undergo this process of re-engineering, even though there are a few issues that are restricting the full-scale adoption of virtualization. These include poor management of costs, human issues, vendor support, management complexity, security problems, and licensing issues. Despite these hurdles, virtualization has a fighting chance, provided systems, tools, and best practices are in place.

Our partners at Analysts Perspectives present analyst views and opinions on virtualization, its pros and cons, market trends, and predictions about its future prospects.

Some key findings include the fact that the virtualization software and services market in Asia-Pacific will grow at an estimated compound annual growth rate (CAGR) of 42 percent to reach USD 1.35 billion by 2010; through 2010, server virtualization will have the single largest impact on budgets for IT hardware and support; through 2010, four vendors – Cisco, Citrix, Microsoft, and VMware will dominate server, desktop, and network virtualization, accounting for over 70 percent of all new virtualization deployments.