Queensland University of Technology assistant dean for the IT faculty, Professor Bill Caelli, has thrown cold water on all the hype surrounding virtualization.

While server virtualization has dominated headlines in 2007 with adoption rates skyrocketing, Caelli said virtualization is not new and has been widely used in the education sector for many years.

He said the decision to virtualize is a trade-off between the costs of virtualizing existing systems versus the quality of existing management systems.

"Business needs to be precise about virtualizations benefits. They need to ask 'what use is virtualization when CPUs can be a throwaway?' and they should assess the benefits of running another machine," Caelli said.

"Having a good custom management system like Fedora Core 5 & 6 or possibly Vista Longhorn makes for a critical point in working out the virtualization trade-off.

"Virtualization allows a logical separation of the areas of business, such as separating accountancy from engineering, which lets people look after themselves and operate to their level of efficiency."

IDC senior analyst Graham Penn echoed Caelli's warning adding that enterprises should undertake testing prior to any implementations.

"Business should always hasten slowly to virtualization; no one in their right mind should commit to something that is still unproven," Penn said.

"While big business has the privilege of piloting a virtual setup in the back room for nine months, smaller companies must run it through their technology partners to prove the advantages, or else they will fall like many others.

"It is a common for small businesses to be enthusiastic and innovative so they typically rush into new technology. Enterprises are more wary and rightly so."

Penn said benefits include lower administrative and physical server costs, possible reduced licensing fees and a reduction in datacentre bills such as electricity, cooling and maintenance.