Virtualization has gone mainstream. According to The Yankee Group's 2006 Global Server Virtualization Survey of 750 businesses, 62 percent of respondents said they already had a virtualization solution in place or were in the process of migrating to one. Only 4 percent did not have plans to tap server virtualization.

Given the technology's upside, it's easy to see why. Server virtualization divides a physical server into multiple virtual machines, each of which can run its own isolated operating environment and applications. That means less hardware, reduced power and cooling costs, and extended datacenter life. The ability to provision a new server simply by loading a virtualized image onto existing hardware not only saves IT management budget, it makes the business more agile.

Make no mistake; commodity server virtualization is a relatively young technology. The market offers multiple solutions but few standards. Consensus among customers is that it works as advertised and is not difficult to implement, but efficient management and migration remain ongoing challenges. Nor is virtualization appropriate for every application. Applications that hog I/O and memory resources, such as large database deployments and Microsoft Exchange, often are not good candidates for sharing server hardware with other applications, even in a virtual environment.

Customers that have taken the plunge are typically in the early phases of virtualized infrastructure: After initial testing, applications are virtualized gradually as servers are retired, applications are upgraded, or IT moves toward a service-delivery model. Despite a cautious start, however, the common theme among these customers is great enthusiasm for the genuine benefits virtualization can bring.

A lot less hardware

One of the key incentives driving the market for virtualization is a desire to reduce costs associated with server hardware, both for limiting new purchases and reducing the total portfolio of equipment in the datacenter. For Capital One, a diversified global financial services company, virtualization provides a key component of a three-year IT consolidation strategy and transformation to an on-demand service delivery organization. This transformation is well into its second year.

"In the past, our businesses owned their server hardware and applications and had them configured to their individual specific requirements," says Lee Congdon, managing vice president of corporate technology at Capital One. "The result was that we ended up with everything, including Unisys, Tandems, Suns, and AS/400s, you name it. On the software side, we were running Novell NetWare, old versions of [Windows] NT, and Windows 2000."

To tame this unwieldy environment, Capital One began using VMware ESX Server to pack multiple server environments on fewer, more powerful physical servers. Rather than dedicating servers to individual business units, business users are increasingly assigned smaller shares of more powerful processors. "We currently have about 150 server instances running on 17 physical servers," Congdon says. And rather than giving each business its own applications, Capital One has consolidated to five IT-approved platforms. The business units simply buy services, such as knowledge or content management, and often don't even know what platform they're using.

Similarly, Citrix is in the early stages of consolidating 15 racks of 200 out-of-warranty servers to just two racks, or a total of 10 HP ProLiant DL585 four-way, dual-core Opteron servers, using Microsoft Virtual Server 2005 R2. "We'll be saving US$9,000 per month in power costs and huge amounts in network port and cabling costs," says Dimitri Mundarain, Citrix's manager of datacenter operations. Why Microsoft? "VMware's ESX Server is more technically advanced and has a better management console but would be much more expensive in licensing and training costs. Our datacenter runs on Windows, and we like the fact that MS Virtual Server uses the same type of interface."

For other organizations, virtualization is essential to extending the life of datacenters that are close to capacity. "We were running out of air- and power-conditioning capacity, which doesn't scale and is very expensive to replace," says Neal Tisdale, vice president of software development at NewEnergy Associates, a software and energy consulting company. NewEnergy used a combination of VMware GSX Server and Solaris Containers to consolidate its server hardware. The datacenter now runs 19 degrees cooler with no cooling upgrade, Tisdale says; and if the power fails, its batteries can keep it up for days, rather than hours, thanks to the reduced server power load.

Tisdale agrees that VMware is feature-rich but says NewEnergy didn't need many of its features. "We didn't want to drive up cost and complexity by throwing in a lot of enhancements like load balancing and VMotion," he says. "We just wanted to get the heat savings quickly and easily."

Packing them in

Hand in hand with hardware consolidation comes increased utilization of current server resources. Before virtualization, IT departments tended to limit each physical server to a single application and operating environment, as multiple applications tended to conflict with one another. The result was often server sprawl and inefficient use of server resources. Congdon says running multiple virtual operating environments on each server has increased server utilization at Capital One from an average of 30 percent to as much as 80 percent.

After monitoring his VMware environment for two weeks, NewEnergy's Tisdale actually found that he could pack many more virtual servers onto a physical server than he originally thought " in the high teens and low twenties, rather than seven or nine. "Users generally overestimate how much they're using a server, and the software vendors are conservative in estimating the memory needs of their applications," he says.

Virtualization consumes its own server resources, of course, which can take its toll on application performance, but users point out that the overhead is offset by running applications on more powerful servers and taking advantage of VM portability. Congdon says general response times have improved now that his applications are sharing much more powerful server hardware.

When application performance declines due to an overburdened server, Next Financial, a securities broker/dealer, simply moves the virtual application environment to a less busy server. "You just shut down the virtual machine, move its disk on the SAN from one LUN to another on the SAN, reattach it on the new host, configure the VM, and launch," says CTO Ismael Carlo. (The company isn't using VMware's VMotion management product, which can actually move VMs around on the fly without any downtime.)

Another side benefit of virtualization is reduced network utilization. "If two of those servers on the same box talk to each other a lot, you're actually offloading network traffic," says NewEnergy's Tisdale, who claims that the performance gains from more powerful servers and virtual network connections overshadow VMware GSX Server's overhead of 7 percent to 10 percent.