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Following the hype around virtualization, the concept is finally becoming a reality. Its adoption can be seen across major sectors such as BFSI, telecom, IT, ITeS, and manufacturing. By N Geetha
Following the hype around virtualization, the concept is finally becoming a reality. Vendors and partners are investing energies and money hoping for a good return on investment. While there is no sequential pattern observed in deployment of server, desktop or storage, the server virtualization has matured to a certain level with most companies having deployed servers. There have been several product and technology innovations, and some market compulsions that are driving the demand for greater virtualization.
Market observers point out that virtualization is revolutionizing the IT industry. Whether desktop, datacenter, or cloud; virtualization has gained acceptance everywhere. The concept has gained the support of the entire ecosystem of technologies viz. servers, storage, networking, security, management, OS, and to applications.
Size of the market
Different market participants offer different estimates about size and growth of the virtualization market in India. Sharma of Parallels estimates it to be about $20 million. Maneesh Dhawan of Alltech estimates the server virtualization market to be $15 million and the desktop and storage virtualization markets to be $3 million each.
S Sriram, CEO of Bangalore-based iValue InfoSolutions expects the market to grow by 30 per cent year on year. According to Deshmukh of Citrix, the growth in server virtualization is likely to be 25 per cent.
Fuelling demand
"Of every ten customers who are eager to know about virtualization, usually two to three show willingness to invest in it. Moreover considering that virtualization currently constitutes close to 10 per cent of total spending on IT infrastructure, the opportunity looks phenomenal," says K Subrahmanya, Director, Central Data Systems. CDS is a partner of VMware, Citrix, HP, and IBM. Subrahmanya maintains that engineering, IT\ITES, and BFSI are reaping the benefits of virtualization and it is becoming all pervasive across storage and desktops.
Ganesan Arumugam, Director - Channels, VMware opines that the need to consolidate data-centers, saving money on hardware, power and cooling are driving the adoption and in the desktop front are some of the reasons behind the adoption of virtualization. He observes that the move is back to the user-centric computing.
Some of the top industries that have been early adopters of virtualization are BFSI, IT, BPOs, and manufacturing. Sanjay Deshmukh, Managing Director, Citrix Systems says that financial services, specially the insurance companies have been key adopters as they have experienced greater cost-performance benefits through virtualization. Sanjeev Sharma, Director - Channels & sales, Parallels finds the current trend to be for VDI. He foresees more than 100 per cent growth quarter on quarter in VDI as it is simpler to understand from RoI standpoint.
iValue's Sriram finds the manageability of the IT infrastructure becoming challenging for the CIOs is driving server virtualization. iValue is a national distributor for Parallels.
According to Sriram, while server virtualization has witnessed demand owing to the tangible benefits, desktop virtualization is gaining ground owing to manageability, compliance, and DLP challenges. According to Sriram, the factors such as high growth, low CAPEX and high OPEX tied to SLAs, and reduced level of maintenance are proving as incentives for partners to take to virtualization solutions business.
Trends and innovations
According to Maneesh Dhawan, CEO, Alltech Solutions a solution provider from Mumbai, the economic slowdown has driven all the companies to re-look at solutions that bring down the cost and virtualization addresses this need. Dhawan finds innovations such going diskless, the use of network boot to increase the speed of networking technologies, and cluster virtualization as new trends. VMware's Arumugam sees the movement toward Cloud-based delivery model as another trend in this space.
The key trend, as Subrahmanya of CDS observes, is selling this technology through IaaS model, i.e. infrastructure as a service.
Deshmukh cites Flexcast technology in the desktop virtualization space as an innovation from Citrix. Flexcast, he informs helps meet a varied user-needs including performance and security. "Our launch of Client Hypervisor targeted at two separate environments is drawing lot of customer-attention," Deshmukh mentions.
Actions by vendors
VMware informs to have acquired over 1,000 customers. It claims to be enjoying over 80 per cent market share. Arumugam observes, "We have built up a strong business in the virtualization space and our next step is to leverage this expertise to move into the fast growing cloud computing arena while we want to help enterprises chart their next phase of growth by enabling true delivery of IT as a service."
The vendor has carried out deployments in telecom, manufacturing, transportation, hospitality, and BFSI sectors. Currently it has about 70 focused partners. To ensure profitability of its partners, VMware offers sales and marketing support, technical and skill-enhancement programs, and provides financial incentives to partners.
Citrix claims to have 11 per cent share in the server virtualization space. It expects to have about 1,000 customers for its desktop virtualization solutions including XenDesktop.
Sriram informs that iValue has included virtualization as part of its portfolio along with MAC virtualization while having customer- and channel-focused team to help them capitalize on these compelling and business relevant offerings. "We are already working nationwide with select partners for each of the technologies, in a focused way jointly developing market based on mutual strengths," said Sriram.
Profitability of channels
For Dhawan of Alltech, his company's profitability comes from existing customers to whom he helps reduce CAPEX. Dhawan informs that the interactions with customers for virtualization planning and deployment are helping him build confidence with them. This, he hopes, will translate into revenues through consulting and implementation this year. Alltech now plans to get its employees trained and certified on virtualization. The company also intends to erect a proof of concept center for its customers.
Subrahmanya of CDS finds that while there is limited or usually fixed component in the sales of virtualization software licenses, greater money can be made through services.
Future direction
Vendors and partners are bullish about the future for this technology. Citrix's Deshmukh believes that partners may even expect to see 70 per cent growth in customer-adoption of virtualization in the years to come. Deshmukh finds that this is going to be a profitable business proposition for partner who could earn about $500 more by spending $100 on their offerings. These revenue streams, he mentions, will primarily be from products and services around virtualization including RIM, software support, storage, etc. "We have 10 focused partners such as Light House as part of our eco-system to drive virtualization who would fetch 50 per cent of the our revenues," Deshmukh informs.
Going forward, Citrix plans to add more features to its products and make them scalable. The vendor expects the future rollouts can be ported to devices such as iPad.
However, Sharma of Parallels cautions that since it is a new and evolving technology, partners must invest in training their sales and technical staff and get them certified to tap the future demand effectively.
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