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Government Clients Eye Virtualization

The public sector is waking up to virtualization. That's the view from solution providers active in the government market.


In an Everything Channel survey last year, solution providers said that only about 17.8 percent of server virtualization business went to government customers. But that's expected to change dramatically this year.

According to a Forrester Research Enterprise And SMB Hardware Survey, 37 percent of the companies surveyed had implemented virtualization in 2007, another 13 percent planned to implement virtualization in 2008 and an additional 15 percent believe that they will implement the technology in 2009.

With some 65 percent of commercial accounts expecting to have virtualization technology in place by the end of 2009, government accounts, too, now seem focused on jumping on the virtualization bandwagon. At this month's National Association of State CIOs [NASCIO] 2008 Annual Conference in Milwaukee, virtualization was top of mind in many panel discussions.

Rock Regan, VMware Corp.'s director of business development, state and local government, for one, moderated a panel on the growing importance of consolidation and virtualization for state CIOs. Other panels were focused on green IT technology and how state CIOs can help reduce energy consumption.

The NASCIO agenda suggests a perfect storm for virtualization technology in the public sector. Falling state tax revenues, which are straining state IT budgets, and a corresponding push for green, energy-saving technology among public-sector accounts are driving the uptick in demand for virtualization in government.

Calling virtualization the biggest paradigm shift in the industry since the advent of the Internet, Ron Dupler, CEO of GreenPages, a Kittery, Maine-based solution provider, outlined the company's aggressive virtualization investment.

"We are well beyond virtualization being a fad or a new craze," exclaimed Dupler. "It is now. It is real. It is important." Companies that don't embrace virtualization from desktops to servers to storage are putting their business at risk, Dupler said.

"This is not an option," he said. "You need to respond to what is happening in the overall marketplace."

Dupler's assessment of the value of virtualization for the commercial market is now drawing the attention of cash-strapped, public-sector CIOs.

He noted that GreenPages itself is taking advantage of VMware virtualization software to improve its own business. Dupler said GreenPages has reduced the number of servers it was running from 60 to four with virtualization. "For cost and profitability, it is insane to be running all these servers when you can virtualize," he said.

Some companies are driving server consolidation rates of 10-to-1 by employing virtualization solutions, Dupler explained.

The benefits of virtualizing IT infrastructures for government are the same as for commercial customers, said Rick Marcotte, president and CEO of DLT Solutions, a Herndon, Va.-based solution provider focusing exclusively on government business.

Server virtualization, for instance, helps government and commercial customers alike cut IT costs by improving server utilization rates that are as low as 20 percent in nonvirtualized environments, Marcotte said. Customers can also take advantage of server virtualization to reuse older legacy servers to cut acquisition costs, and to eliminate many legacy servers to cut power costs, he said.

What is unique about the government is that it is the best customer for server virtualization, as it has more data, servers, data-center, raised-floor, applications and human capital related to managing IT than any company in the world, Marcotte said.

"With all due respect to the Fortune 1000 companies, the federal government is Fortune 1," he said.

When talking about technologies like virtualization, it is impossible to ignore the government as a major market, Marcotte explained. "Analyst firms like IDC talk about the storage virtualization market as reaching $2 billion by 2009, with 1,000 petabytes of data being virtualized," he said. "You can't talk those numbers without including the government. They're the biggest creator of data out there."

Server virtualization is also fueling the growth of related markets, such as storage virtualization, desktop virtualization, Software as a Service (SaaS) and green IT, Marcotte said. "Public-sector customers, including federal, state and local, and higher education are perfect candidates for these technologies since they have the most to gain from the successful deployment of these architectures and concepts," he said.

Despite the huge potential of the government sector for virtualization technology, government customers still lag commercial businesses in terms of deployment, Marcotte said.

"Government is not the first to adopt new technologies," he said. "But once they start the adoption, it becomes a tidal wave."

The channel is a major participant in the virtualization movement for government users, Marcotte said. "It's a big channel play for both server and storage virtualization," he said. "For solution providers, the big play is the services component."

Government is definitely adopting server and storage virtualization technologies, with government labs and more progressive departments moving faster than the rest, said Hope Hayes, president of Alliance Technology Group, a Hanover, Md.-based government and commercial solution provider.

"They are more astute about new technology, and can make it happen," Hayes said. "They have a lot of smart people, and need to keep up on the latest technology."

For government in general, virtualization still requires a lot of education about the technology and benefits, Hayes said. "A lot of that is educating them on what technology is available to them. You just can't give them a bunch of CD-ROM disks."

As in the commercial space, VMware is the primary server vendor of choice for government customers, Hayes said. She said she sees little of Citrix or its XenServer technology, and Microsoft is just in the process of bringing its Hyper-V technology to market.

And, given the glacial pace at which government moves, Hayes said she expects that situation to remain unchanged for the next few years with the organizations that work with her company.

"Many government organizations have their own test labs," she said. "They started testing VMware two or three years ago, but only in the last 18 months have they started rolling out the technology."

-Steve Burke contributed to this story.

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