Users say licensing costs slow virtualization adoption

The cost of VMware is deterring at least one organisation from further adoption of virtualization.

Even among aggressive VMware virtualization users, licensing of applications remains an obstacle coming between them and complete virtualization.

US company United Financial Servicesis ahead of the curve on virtualization. Rod Gabriel, IT infrastructure engineer for the firm, estimates that 90 to 95% of the company's x86 systems are virtualized, across 10 VMware ESX hosts.

But achieving 100% virtualization remains out of reach, Gabriel said. A few of the applications depend on proprietary hardware, making them difficult or impossible to virtualize. But, licensing is an even bigger obstacle.

"One of the biggest apps I'd like to virtualize is our image processing application" based on Microsoft SQL Server, said Gabriel. "With vSphere, I'm not worried about performance anymore; what's holding me back is the way Microsoft does their SQL Server licensing."

UFS pays Microsoft $US17,000 per processor to license SQL Server, which it runs on a two-processor, quad-core box, for a total of $US34,000. But, if UFS were to virtualize the application, Gabriel would need to configure it for eight virtual CPUs, or $US136,000 -- four times as much as it currently pays. And that's not counting the cost of the underlying VMware layer.

Indeed, resource-intensive applications like databases tend to be the "last man standing" when it comes to virtualization, said Chris Wolf, analyst at the Burton Group. According to Wolf, a lot of shops that have virtualized their databases find that the application rarely needs as much access to the underlying resources as it had on bare metal. Oftentimes, a resource-intensive database application that was running on eight physical cores can do just fine with two or four virtual CPUs, he said.

If licensing costs can be kept in check, virtualizing resource-intensive databases can be a boon because of the business continuity benefits that virtualization brings, Wolf said.

And for IT managers that have been burned by poor performance of virtualized apps in the past, Wolf said that it might be time to reevaluate the situation based on the latest VMware vSphere and Intel Nehalem processors. "If they're concerned about performance, I tell them -- more than likely -- the poor performance was a hardware problem," he said.

Until then, highly virtualized IT departments like UFS' will be the exception, not the rule, as organizations struggle to increase the percent of virtualized workloads. According to a recent Forrester Research report, 'The State Of Emerging Enterprise Hardware: 2009 To 2010,' 72% of firms report using virtualization today. At the same time, they've only virtualized 37% of their operating system (OS) instances. Survey takers told Forrester, however, the percent of virtualized OS instances will increase dramatically, up to 65% in 2011.

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