Channel At The Center Of Virtualization Wave

The Intangible Factor
Server virtualization is definitely a solution sell, Sirius Computer Solutions' Staszak said. While some of the benefits of the technology—such as reduced power, cooling, floor space, 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," he added.

Customers are not only thinking about server virtualization, they are bombarded by it, said Chris Taylor, director of professional services and solution sales at Evolving Solutions Inc., a Hamel, Minn.-based IBM-focused solution provider. "They'd have to be living in a shell to not see it," he said. "But you [still] need to sell it to get them to make the leap. Virtualization is really an intangible. You can't touch it or feel it."

For small businesses, solution providers are absolutely essential to reaping the benefits of server virtualization, said Arlin Sorensen, CEO and partner at Heartland Technology Solutions, a Harlan, Iowa-based Hewlett-Packard solution provider who has worked with the free Microsoft Virtual Server software and is just starting to look at that vendor's new Hyper-V software.

Heartland Technology Solutions' server virtualization business is 95 percent driven by its interaction with its customer base. "Customers have heard of virtualization, but didn't know how it might impact them," Sorensen said. "The beauty of the Microsoft [Virtual Server] solution is it's basically free. It's hard not to get excited about something you don't pay for that can make a difference."

For the most part, customers already know about server virtualization, so the element of evangelization is gone, Edwards said. Instead, the value of the channel today is how to help customers implement it correctly. "Our mantra is, 'Customer first,'" he said. "We go out and talk to customers, understand their pain point. But we have a lot of customers who say, 'I've heard about VMware, I have a budget to meet, I've heard I can cut half my servers.' But do we say, 'Oh, you need $250,000 worth of servers, but I can cut that in half if you add $50,000 in server virtualization?' That's a big depends-on."

Nearly 63 percent of solution providers selling virtualization solutions work with server-hosted virtualization, which is not as robust as hypervisor-based solutions but are offered by vendors for free in order to give customers an opportunity to test the technology. About 55 percent already offer virtual desktop solutions, while nearly half offer hypervisor-based solutions.

Currently, about 58 percent of solution providers find that hardware margins change little as a result of customers' adoption of server virtualization technology. However, more than 27 percent find their hardware margins actually rise with the adoption of server virtualization. Solution providers said they often need to bring in higher-priced, higher-margin servers to act as a server virtualization platform to get the performance needed to replace multiple lower-cost servers, according to the Channel Virtualization Study.

Staszak said implementing server virtualization, rather than requiring all new server hardware, can actually be done using existing servers. "So it's not a complete rip-and-replace," he said.

Knowledge Is Power
For now, lack of experience in server virtualization is the main challenge for solution providers entering the market, followed by such closely related challenges as lack of expertise, and the time and expense involved in training and certification. As vendors improve their training and certification process, however, that should get better.

Going forward, nearly half of solution providers expect disaster recovery to be the most important server virtualization market driver, with 35 percent expecting lower costs and higher economies of scale to be the key driver, followed by 33 percent expecting increased flexibility in server resource allocation as the top driver.

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