Nearly every critical operation these days is dependent on one or more computer applications that typically run on servers.  As businesses grow, many have to increase investments in new servers proportionally to host databases, electronic commerce applications, and financial reporting programs.  What is growing out of proportion, however, is the increased complexity associated with managing and maintaining these expanding technology infrastructures. This management challenge is pinching profits.

Enter Virtualization.

Virtualization allows multiple applications and operating systems to operate on a single server -- or box.  This has been a major tool for managing IT complexity and cost in large enterprises, and it is catching on with small and medium-sized businesses.   

Moreover, organizations are quickly realizing that virtualization can do more than simply consolidate server investments. This technology allows small and mid-sized businesses to save on power consumption and enables better disaster recovery.

Help with backup and disaster recovery

The number one pain point for growing businesses in their IT infrastructure is backup and disaster recovery, says Ben Matheson, director for small and mid-sized businesses at VMware. Virtualization helps in disaster recovery in a number of ways.

In the physical world, disaster recovery is complicated and expensive. A good disaster recovery plan requires twice as much hardware resources to replicate their operating environment at a secondary site.

Such is not the case in a virtual IT environment.  Backup sites can consolidate multiple applications on fewer pieces of hardware. 

This value-proposition is finding a receptive audience among small and mid-sized businesses. According to a study conduced by AMI Partners, small and mid-sized business that are fully leveraging their networks by deploying solutions such as wide area networks, virtual private networks, and IP-based services, also report that technologies such as server virtualization and voice over Internet protocol (VoIP) are top of mind as they seek ways to realize the most return out of their network investments.

Cut costs by reducing servers

VMware’s Matheson says the sweet spot for virtualization are companies that start at 10 servers or more. “Customers see an immediate ROI by investing in virtualization,” he says. As servers age and are replaced, virtualization enables companies to remove 10 old servers and simply buy one virtualized server. “Immediately they have a 90 percent reduction of capital costs that year,” he adds.

Virtualization also lets end users scale more easily. As small and mid-sized businesses grow, they no longer need to add a new server each time they support a new application in the network. 

It is an opportunity that vendors are flocking to pursue.  For example, Dell plans to introduce VESO, a virtualization optimized server that has been designed from the ground up with virtualization workloads in mind, says David Lord, a spokesperson for Dell.

Virtualization is also creating demand for supporting applications.  For instance, Ennio Carboni, vice president for Lexington, Mass.-based network monitoring firm Ipswtich, says he expects monitoring and management tools for virtualized machines to grow rapidly.

He also predicts that small and mid-sized businesses will be more likely to support virtualization technology on desktop applications as opposed to larger companies, which are primarily using virtualization in LAN environments and for storage consolidation.