What do virtualization executives think about 2009?  A VMBlog.com Series Exclusive.

Contributed by Tim Lucas, President and CEO of Surgient 

2009: The Year of Virtualization - A Viewpoint by Surgient

Saving money and delivering ROI have been the strategic benefits of wares from technology companies for years. Ever since the end of the last recession, new technologies have arisen only if, in some way, they can demonstrate a return.

Virtualization delivers significant ROI, and applications that capitalize on virtualization similarly save money and resources for the companies that deploy them. Corporate investments in virtualization will continue in 2009.

Even in a recession, IT departments are still willing to buy technology that will save them money and conserve their resources. Recent news reports indicate that the current economic recession began late in 2007. However, because IT organizations recognized the value and return on virtualization, 2008 was a great year for providers of virtualization technologies, management and automation tools.

Hypervisors. With the announcement of new entrants, Microsoft Hyper-V and Citrix XenServer, into the virtualization marketplace, Microsoft and others will gain hypervisor market share on VMware. Expect the hypervisor to quickly become a commodity while scalable management tools and solutions for the enterprise become more important and valuable. Large IT management vendors will take the opportunity provided by a challenging economic environment and the expanding virtualization market to acquire growing virtualization companies to bolster their product portfolios.

Although 2009 appears to be a challenging year for the global economy, IT spending will not decline as significantly as some predict, although IT buyers will be more cautious with how money is spent.

Many buyers, forced to take a hard look at the status quo, will be open to technologies like virtualization to improve ROI and operating costs. Virtualization technology providers have a promising future even in a difficult IT spending environment. The virtualization vendors who are stable and have adequate capital can take the opportunity to maintain or grow their market positions by listening to customer needs and requests. These select companies will continue to add value for both departmental or business unit buyers (typically pre-production environments) and enterprise-wide IT operations buyers (production environments). The virtualization companies that will have trouble are those classified as “Me Too,” that are too new to the market or not yet profitable.

Data Center. Virtualization technologies will see greater adoption in both pre-production and production environments as management tools, improved functionality and the need for cost savings drive adoption. According to Tom Bittman, Gartner data center research vice president, 70 percent of all data centers are using virtual machines of some sort in production.

One exciting thing about the increasing adoption of virtualization technology is how rapidly the technology will advance in the next 12 months. Early adopters focusing on server consolidation and entry level use cases will give way to heavy loads and production data center use cases.  Scalability, manageability and low manual involvement will be more important as this adoption occurs.  Additionally, be prepared for robust ecosystems to emerge as systems management vendors, VAR’s and systems integrators enhance their offerings by partnering with the most interesting virtualization companies. IT departments and personnel will also gain significant expertise in deploying and managing combined virtual and physical environments.

The use of virtualization management technologies will continue to grow at a significant pace although IT budgets are tightening. Companies, like Surgient, with a mature self-service management platform for both virtual and physical environments will be able to help companies maximize the benefit of their IT spend. Buyers are seeking ways to do more with the teams and hardware they have today. If properly deployed and managed, virtualization provides many ways to accomplish that objective.  For those companies desiring to configure their own internal enterprise clouds, the virtual and physical management capability available today can provide strong ROI and tremendous operating efficiency.

Cloud Computing. Gartner believes that by 2012, at least 14 percent of the infrastructure and operations architecture of Fortune 1000 companies will be managed and delivered much like a cloud-computing provider, internally (service-oriented, paid by usage, scalable, elastic and shared)  He is calling this technology a “private cloud” If capital costs are the buyer’s bigger concern, Software-as-a-Service and Cloud Computing offerings using virtualization as an advantage will grow rapidly in 2009 to meet that market demand.

Thanks to the discipline of many growing technology companies today, the enterprise software market is poised to weather the current economic storm by continuing to deliver a return for customers. Because of its proven benefit to the bottom line, virtualization, virtual automation and lab management will become even more popular.

With a compelling return on investment, multiple ways to acquire and use virtualization technology, environmental benefits from, “Green” initiatives using virtualization and rapidly advancing technology, 2009 should be a good year for virtualization companies and the virtualization market as a whole. Of course, time will tell.

About the Author

Tim Lucas is the President and CEO of Surgient.

Tim is responsible for the overall leadership and direction of Surgient, including all aspects of strategy and execution. Previously, Tim was Surgient's CFO and Vice President of Services. Tim brings to the Company more than 19 years of public and private company experience in various leadership roles. Prior to joining Surgient, Tim was the finance executive for a $200MM business unit of SAS Institute, the largest private software company in the world. Tim has also previously served as VP of Consulting and as Senior Director of Operations at Red Hat, where he founded the company's global professional services practice with a focus on meeting client needs. Tim has a bachelor of business administration, with distinction, from the University of Oklahoma.