The best way for corporations to embrace virtualization is by adopting the technology gradually, taking "baby steps" until the concept is well understood internally, according to a systems engineer at a leading U.S. insurance company.

Virtualization enables companies to cut down on the number of the computers they use by allowing each of machine to function as a number of virtual machines running different operating systems. Although the technology has already been widely adopted, users can still struggle with the idea of their physical server becoming virtualized, according to Jeff Hunter, a consultant and systems engineer with Nationwide Mutual Insurance Co. in Columbus, Ohio.

"It's easier to take baby steps and get started," he said Monday. "People don't always get it. It takes time to grasp the concept." Hunter was speaking during an event to launch virtualization software vendor VMware's VMware Infrastructure 3 (VI3) suite in Cambridge, Massachusetts.

He pointed to Nationwide's own experience with server virtualization.

The insurance and financial services organization, which handles 16 million policies, started dabbling in the technology in 2002, using VMware's Workstation and GSX Server virtualization software for testing and development, he said. Two years later, Nationwide took on additional VMware software, including ESX Server, VirtualCenter management software and the VMotion tool, which facilitates moving up-and-running virtual machines from one server to another.

Currently, Nationwide has deployed more than 475 virtual machines. However, this only represents around 10 percent of the company's total servers, Hunter said. He hopes to have 1,000 virtual machines in place by year-end.

About 32 percent of the 475 virtual machines are operating in Nationwide's production environment running applications, including Citrix, Hyperion, Lotus and PeopleSoft as well as domain controls and file and print services. The other 68 percent of the virtual machines are used by Nationwide for testing, development and disaster recovery. The company has a proof-of-concept or laboratory environment where users can "test drive" virtual machines, Hunter said. "It's like a playground for them, more or less," he added, designed to boost users' comfort level with virtualization.

Nationwide conducted a return on investment and total cost of ownership survey to quantify savings from adopting server virtualization over the first half of 2005, Hunter said. The company estimated it saved more than US$488,000 in hardware costs, with virtualization enabling a 12-to-1 rate for server consolidation as well as saving US$302,000 in operational costs, including lower cooling and power bills. For each virtual machine deployed, Nationwide saved an estimated US$2,250, he added. Using virtualization also boosted server utilization from between 5 percent and 10 percent, up to 60 percent to 70 percent using VMware's ESX Server software.

The survey was carried out when the bulk of Nationwide's servers had two CPUs (central processing units) and the company was using local storage. Hunter expects those numbers would now be "dramatically different," given that the company uses many four-CPU servers and has consolidated its storage. He also believes the current rate of server consolidation will be more like 20 to 1 than last year's 12 to 1.

Having between 4,000 to 5,000 servers that run Microsoft's Windows operating system, Nationwide looked at the software giant's Virtual Server software last year. "We decided to stay with VMware," Hunter said. "The [VMware] infrastructure is decoupled from the operating system and it's stable and easier to manage."

Nationwide has been beta testing VMware's VI3. Hunter said the new software suite with its focus on distributed resource scheduling and high availability should answer "two of the big concerns business units have about the performance and availability of virtual machines." He expects that his organization will start rolling out VI3 soon after it ships later this month.

He welcomed the expansion in CPU and memory limits offered in VI3 and the increased support for other operating systems. "We've done a lot of Windows and Linux [virtualization]," Hunter said. "Now, we'll look to consolidate our Solaris servers." VI3 offers full support for Sun Microsystems' Solaris 10 Unix operating system.

Hunter is also pleased with VMware's decision announced Monday to centralize and automate its product licensing. "It's been a bit of a headache, before it was on a onesie, twosie basis," he said, with Hunter having to track the licenses on a spreadsheet.