VARs Take Server Virtualization Lead

Server virtualization is not only one of the fastest-growing parts of the IT market, it's also one in which solution providers have already made their own.

That is one of the main results of two recent exclusive CMP Channel surveys of solution providers about how important server virtualization is to their business.

Server virtualization is growing by leaps and bounds.. IDC, for instance, estimated that the number of virtual servers deployed will rise 40.6 percent annually through 2010, with the result that 1.7 million physical servers will be shipped to virtualize 7.9 million logical servers.

In one of those surveys, the CMP Channel 2008 State of the Market Study, 22.6 percent of the solution providers surveyed are already currently selling or recommending virtualization products of some sort, including server and/or storage virtualization.

Those solution providers who sell server virtualization products such as technology from companies like VMware, SWsoft, or Citrix, or related solutions, are currently seeing that technology already account for an average of 20.3 percent of their revenue.

Solution providers said that server virtualization is a big part of their business, but are divided about just how widespread the technology has become in the channel.

Chris Taylor, director of professional services and solution sales for Evolving Solutions, a Hamel, Minn.-based IBM-focused solution provider, said the thought that nearly 23 percent of solution providers seems somewhat high.

For instance, Taylor said, it could depend on how the question is asked. "Are they selling virtualization, or selling a server which someday may have VMware installed," he said. "They may actually be selling a strategy, a server or a blade server to be virtualized later. Or they may really be selling virtualization."

For Stan Staszak, director of System i and System x for Sirius Computer Solutions, a San Antonio, Texas-based IBM solution provider, 23 percent actually seems low.

"Server consolidation and IT optimization is hot, especially in the x86 space where servers are typically 10 percent utilized," Staszak said. "Solution providers who aren't doing virtualization are missing the boat."

Solution provider presence in the server virtualization market is growing fast, according to the CMP Channel Virtualization Study. Of those solution providers who are in the server virtualization market, 52.3 percent of them have been there for less that 12 months.

And those solution providers are finding that customers depend strongly on them to bring server virtualization technology to their data centers.

According to the survey, 47.7 percent of server virtualization sales stem from the customer looking for a server solution which the solution provider turns into a virtualized opportunity, while 40.7 percent of sales come when solution providers proactively bring server virtualization technology to the attention of customers. Only 10.5 percent of sales are the result of customers asking about server virtualization.

Server virtualization is definitely a solution sell, said Staszak. While some of the benefits of the technology, such as reduced power, cooling, floor space, and maintenance requirements and better control of data backups, are tangible to customers, there is so much more that can be done. "If customers are not exposed to server virtualization, it's up to the VAR to bring it to their attention."

Customers are not only thinking about server virtualization, they are bombarded by it, Taylor said. "They'd have to be living in a shell to not see it," he said. "But you need to sell it to get them to make the leap. Virtualization is really an intangible. You can't touch it or feel it. When we do virtualization studies, we show how customer can remove old servers, show them the management cost, the power cost, and all the savings."