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Virtualization: Where is the ROI?
Virtualization is for real, and is here to stay. CIOs and IT heads in several organizations that I interact with, are contemplating some form of virtualization initiatives, be it desktop or server.
I have been an early adopter of virtualization. Although it is a buzzword today and takes a substantial mindshare of every CIO, I would take a step back in time when I introduced virtualization in the organizations that I worked for. I remember the time when we got thin clients to get into Windows servers, where we had taken terminal licenses, and around 80 people used to work on it. I am not sure if VMware was there or not but certainly virtualization was not in the limelight as it is today. In my present organization, ABC Consulting, I have virtualized servers, running on four blades. I did so in PVR too.
When it comes to virtualization initiatives, a big challenge for any CIO is to have the budget approved. For this to happen, the CIO has to closely look at the tangible benefits of virtualization and return on investment (ROI). Desktop virtualization makes sense if you have a mobile workforce. But if the users are stationary, working out of the office, desktop virtualization becomes a costly proposition. The return on investment (ROI) just doesn't work out. This is in today's scenario. If tomorrow, the cost of licensing changes, then things could change.
When I thought of desktop virtualization in ABC, the economics just didn't work out. If I couldn't justify ROI to myself, how could I convince the management? I tried talking to several peers of mine, and I got the same answer. If you are fine with security being placed somewhere, then you might find it workable in terms of cost. But it varies from sector to sector. If you talk of a BPO or a financial services business, in that case, the cost may work out.
On the server front, I have not met any peer of mine who is not looking at it or not doing it. Some way of the other, they are trying to virtualize servers. In this case, if you already have the budget with you, then it is fine. But, if you have to get the budget passed for virtualization, you will have to make the management understand the cost of acquisition and total ownership. Acquisition cost of virtualization will be higher but the overall cost will go down.
As the CIO, some of the tangible benefits of virtualization that I see include savings on retail space and those linked to electricity and cooling. My expectation from virtualization is higher uptimes, which means that if one of my physical servers goes down, I should not see interruption of any service. The moment I am able to achieve that, I have achieved whatever I want from server virtualization.