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Question: As a medium-sized company, we’re looking to minimise our overheads wherever possible at the moment. I’ve heard that virtualisation can help reduce our IT costs, but I don’t really know that much about how it works, or how we would make real savings. Can you help? - Jamie, Liverpool

Answer: Hi Jamie, for most medium-sized businesses like yours, it really is a challenge to keep IT expenditure low, while continuing to provide a high quality of service to customers. Your IT management means expensive consultants and lots of bedding-in time when you make changes.

That’s where virtualisation can help to squeeze more out of your IT budget. But before I go into the cost benefits, let me first explain briefly what virtualisation does and how it can benefit your organisation.

Virtualisation in a nutshell

For many years now, software programs have run on servers, with an operating system in the middle to make the programs and hardware work together. The trouble is, because they’re so complex, most servers can only run one operating system at a time. As a result, many companies end up with rooms full of single-purpose servers which are massively under-utilised and extremely wasteful in terms of computing power and electricity - not to mention all the associated maintenance costs.

To paint the picture properly, suppose your customer management database runs on its own server. It only does any work when someone interrogates the database. The rest of the time, it’s idle – wasting money. Most single-purpose servers are idle 60% of the time.

Virtualisation turns this on its head by running multiple operating systems and programs on the same physical server. So rather than paying for lots of under-utilised servers, each dedicated to a specific workload, virtualisation allows those workloads to be consolidated onto a smaller number of more fully-used machines. All of which adds up to a much better return on your hardware investment.

What are the IT benefits?

That, of course, saves you in hardware costs, but there are operational benefits too. Your IT becomes much more agile:

  • Virtualisation makes software back-up, business continuity, testing and development much more straightforward
  • It allows you to continue using programs that might need to run on older operating systems
  • Downtime is reduced
  • You’ll use less space and power for your servers – reducing your carbon footprint, too

20% savings and reduced TCO

Virtualisation enables faster, more economical deployment of new business services, which in turn means IT can better meet the needs of your business. Since virtualised IT no longer relies on clusters of bespoke machines, you can implement new business ideas using new software on existing hardware. You can even try out a new software system on a virtualised server before committing to roll it out across the company. Risk is reduced, expense is reduced, as is the load on the IT department. Early adopters of virtualised systems are reporting IT savings of up to 20% and this is expected to rise.

If all that sounds interesting, here are the products to investigate:

PCs too can be virtualised, using tools like Microsoft Application Virtualization 4.5*, (formerly SoftGrid), to run programs which are based on a central server, independently of their operating system. This increases the number of programs available to each desktop, reduces the total cost of ownership (TCO) of each PC across its lifecycle, and also saves on software licensing costs.

How does licensing for virtualised servers work?

Clearly, virtualised servers represent a cost saving against racks of under-used machinery; but there are more cost savings to be had through smart licensing and financing options.

Over the last couple of years, Microsoft has adapted its licensing models to suit the new virtualised world. Let’s take some examples. With Windows Server 2008 Standard Edition, one licence allows you to run one host operating system and one virtual operating system environment per licensed device. With the Enterprise Edition, assigning one licence lets you run one host operating system and up to four virtual operating systems from the Windows Server family, including prior versions.

In the case of SQL Server 2008 Enterprise Edition SP2 and BizTalk Server Enterprise Edition 2006 R2, licensing all the physical processors in the server allows you to run unlimited virtual operating systems.

To help you make the change to virtualised IT, flexible terms from Microsoft Financing can also mitigate the upfront expenditure - overcoming the Catch 22 of needing to spend in the short term to cut costs later. These financing options offer flexible ways to reduce your initial outlay, extend the payment period, defer costs and so forth. It also means that in the current economic climate, you can improve your technology base without recourse to the bank.

In conclusion, I’d strongly recommend virtualisation to you as an effective way to save money, while streamlining your IT and actually improving your service. You’ll find out more about the technology and your best buying options by contacting your nearest Microsoft Partner. With the right kind of guidance, virtualisation will certainly help you save money by consolidating servers, reducing power consumption, and speeding up desktop deployment.

I hope you find this helpful,

--Emma

*This product is part of the Microsoft Desktop Optimisation Pack, which customers with Software Assurance coverage can buy as a subscription.

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