Virtualization to eat into IT budgets

January 09, 2008 (Techworld.com) -- Over the next three years, virtualization will have the single largest impact on budgets for IT hardware and support, a market that will be dominated by three large vendors, according to a new study.

Saugatuck Technology Inc.'s new report, entitled "The Many Faces of Virtualization -- Understanding a New IT Reality," finds that Cisco Systems Inc., VMware Inc. and Citrix Systems Inc., which recently acquired XenSource Inc., will account for 60% of all new virtualization deployments. The second largest spend will be on network virtualization, according to the research.

A third key finding of the study is that all facets of IT virtualization will see substantial enhancements in functionality and performance, with the most significant virtualization-related enhancements in microprocessors, hypervisors and operating systems.

The background to the report is Saugatuck's finding that "virtualization is a key enabler of IT and business efficiency, but it is vastly misunderstood and underestimated within user enterprises. As a result, user executives fail to effectively manage it, and therefore fail to realize the full potential and benefits of IT virtualization."

"We're at a very critical point in the evolution and adoption of virtualization by both users and vendors. Almost everyone sees opportunity in virtualization, but very few really grasp its scope and complexity," said Charles Burns, a Saugatuck vice president and author of the study.

"That leads to a lot of missed opportunities -- and some very inflated costs of management," continued Burns. "Our goal with this study is to provide a foundation for understanding key categories of virtualization, their benefits and how to manage them effectively."

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