Virtualization Vigor
/**/ /**/ "The interesting thing is you have some solution providers that think virtualization is old news; they want to move on," said Nick Bock, CEO and co-founder of Five Nines Technology Group, Lincoln, Neb. "All they want to talk on now is cloud or maybe virtual desktop. But look where the demand is. There's still a huge amount of demand for virtualization."
Indeed, more businesses are virtualization-savvy now compared with two or three years ago, and they understand how a virtualized environment can save them money in the long term and provide a quick return on their initial investment, Bock said.
"They're more educated on it now," he said. "They're not afraid of it."
Virtualization has been the big business driver for customers in the 100- to 500-seat space for Five Nines, Bock said, while managed services has driven more growth in the 10- to 100-seat space.
"Our ability to do [virtualized environments in] large infrastructure consolidation, server consolidation projects has driven a significant increase in revenue," said Bock. Five Nines placed No. 13 on this year's Fast Growth list with a two-year growth rate of 157.4 percent. "Building our expertise around the VMware platform and being recognized as a strong virtualization shop has increased our growth."
But with more solution providers marketing themselves as virtualization experts, VARs must learn to differentiate themselves from the competition, Bock said. Five Nines does that by taking a business perspective approach instead of a technology approach with clients.
"What clients look for is someone to come in with a solution that makes sense for their business, where you invest time and energy to help them see the return on investment and see what the benefit is for their business."
For example, Five Nines might do a cost analysis on an existing infrastructure where a company replaces or upgrades 40 servers every three years.
"We look at it from the hardware perspective, the labor perspective and the management perspective. I say, 'If you go with virtualization, here's how quickly you'll recoup the dollars you spend on this solution.' That's huge," Bock said. "Instead of battling four different companies who say, 'I'll use this server or this SAN,' I spend my time and energy figuring out what the right solution is."
Virtualization has become "the center of our universe," said Dan Weiss, CEO and co-founder of Varrow, Greensboro, N.C., No. 2 on this year's Fast Growth list with an astounding 875.6 percent growth rate over the past two years.
"The cost savings, the efficiency savings of virtualizing your data center is resonating with customers. Every single client is interested in saving money and having to do more with less," Weiss said. "Virtualization, and overall data center consolidation, plays well into that. That's VMware, that's consolidated storage, converged networking and converged compute. We see tremendous opportunity into 2011 and beyond. It's certainly one of the key reasons why we continue to see growth."
Solution providers that can demonstrate a strong business ROI are more likely to win the deal, said Brian Casey, general manager of Daymark Solutions Inc., a Burlington, Mass.-based VAR. Daymark grew 43.8 percent during the past two years and is ranked No. 69 on this year's Fast Growth list.
"A great, compelling financial argument can be made. It increases flexibility and allows customers to adapt to change," Casey said.
Another big assist to VARs selling virtualization has been the willingness of developers to let their applications be implemented in a virtualized model. That wasn't the case just a couple of years ago, Casey said.
"Before, they would stick to their guns that they needed separate servers for each function. But the sheer momentum of the market and also the confidence that customers had in the technology provided enough pushback to the providers," Casey said. "We even helped a customer virtualize SAP."
Niche or vertical market application developers have particularly changed their tune, Casey said. Makers of health care or financial applications used to require up to 10 servers to deploy their applications, but that is no longer the case, he said. "The voice of the customer caused them to adopt [virtualization]," he said.