Server virtualization demand and deployments are strong and will remain so for the remainder of 2009 and through 2010, despite the ongoing economic downturn.

The results of the new, independent ITIC 2009 Global Server Virtualization Survey, which polled more than 700 corporations worldwide during May/June and August, reveal that server virtualization deployments have remained strong throughout the ongoing 2009 economic downturn. It also shows that the three market leaders Citrix, Microsoft and VMware, are consolidating their positions even as the virtualization arena itself consolidates through mergers, acquisitions and partnerships.

Microsoft in particular has made big year-over-year gains in deployments and market share. Thanks to the summer release of the new Hyper-V 2.0 with live migration capabilities  the Redmond, Washington software firm has substantially closed the feature/performance gap between itself and VMware’s ESX Server.  The technical advances of Hyper-V combined with the excellent conditions of Microsoft’s licensing program, make the company’s virtualization products very competitive and alluring. Three out of five — 59% of the survey respondents — indicated their intent to deploy Hyper-V 2.0 within the next 12 to 18 months.

Survey responses also show a groundswell of support for application and desktop virtualization deployments. These two market segments constitute a much smaller niche of deployments and installations compared to virtualized server environments. The survey results show that application virtualization (where Microsoft is the market leader) and desktop virtualization (in which Citrix is the market leader), are both poised for significant growth in the 2010 timeframe.

Another key survey revelation was that 40% of respondents, especially businesses with 500 or more end users, said they either have or plan to install virtualization products from multiple vendors. This will place more emphasis and importance on integration, interoperability, management and third-party add-on tools to support these more complex, heterogeneous virtualization environments.

Among the other key survey highlights:

• The “Big Three,” Citrix, Microsoft and VMware, are bolstering their positions with a slew of new offerings and a plethora of partnerships due out in the 2009 summer and fall.
• Partnerships and Alliances: The alliance between Citrix and Microsoft remains robust as these two firms believe that there’s strength in numbers, as they mount a challenge to server virtualization leader VMware’s continuing dominance.
• Microsoft Hyper-V Closes the Gap: Microsoft made big year-over-year market share gains from 2008 to 2009. The survey data shows current Hyper-V usage at 32%; but 59% plan to adopt in next 12 to 18 months.
• VMware remains the market leader in server virtualization with approximately 50% share among enterprise users; Microsoft follows with 26% share.
• Microsoft is the current market leader in application virtualization with a 15% share; followed by Citrix with 11% and VMware with 7%. However, nearly two-thirds of businesses have not yet deployed application virtualization.
• Citrix is the market leader in desktop virtualization with a 19% market share followed by Microsoft with 15% and VMware with 8%. But again, over 60% of corporations have not yet begun to virtualize their desktop environments.
• Mergers and Acquisitions Raise Questions: There is confusion among the legacy Sun and Virtual Iron users as to what will happen to both the product lines and technical support in the wake of both firms’ acquisition by Oracle.
• Apple Mac is a popular virtualization platform; nearly 30% of respondents said they use Mac hardware in conjunction with Windows operating systems to virtualize their server and desktop environments.
• Parallels and VMware Fusion are the two leading Mac virtualization vendors with a near 50/50 split market share.
• Time to Bargain: Despite budget cuts and reduced resources only a very small percentage of companies — 7% — have attempted to renegotiate their virtualization licensing contracts to get lower prices and better deals.
• Server Virtualization Lowers TCO: Almost 50% of survey respondents reported that server virtualization lets them lower their total cost of ownership (TCO) and achieve faster return on investment (ROI); however, only 25% of businesses could quantify the actual monetary cost savings
• Users Prefer Terra Firma Virtualization to Cloud: Users are moving slowly with respect to public cloud computing migrations, which are heavily dependent on virtualization technology. To date, only 14% of survey respondents said they will move their data to a virtualized public cloud within the next six-to-12 months.

This survey identifies the trends that propel or impede server, application and desktop virtualization deployments and to elucidate the timeframes in which corporations plan to virtualize their environments. ITIC advises all businesses, irrespective of size or vertical market to conduct due diligence to determine which virtualization solution or combination of products best meets their technical and business needs in advance of any migration. And in light of the ongoing economic downturn, businesses are well advised to negotiate hard with their vendors for the best deals and to ensure that the appropriate IT managers receive the necessary training and certification to ensure a smooth, trouble-free virtualization upgrade. This will enable the business to lower TCO, accelerate ROI and minimize and mitigate risk to an acceptable level.

For the second year in a row, IBM AIX UNIX running on the Power or “P” series servers, scored the highest reliability ratings among 15 different server operating system platforms – including Linux, Mac OS X, UNIX and Windows.

Those are the results of the ITIC 2009 Global Server Hardware and Server OS Reliability Survey which polled C-level executives and IT managers at 400 corporations from 20 countries worldwide. The results indicate that the IBM AIX operating system whether running on Big Blue’s Power servers (System p5s)  is the clear winner, offering rock solid reliability. The IBM servers running AIX consistently score at least 99.99% or just 15 minutes of unplanned per server, per annum downtime.

Overall, the results showed improvements in reliability, patch management procedures and an across-the-board reduction in per server, per annum Tier 1, Tier 2 and the most severe Tier 3 outages.  Among the other survey highlights:

• IBM leads all vendors for both server hardware and server OS reliability as well as the fewest number of Tier 1, Tier 2 and Tier 3 unplanned server outages per year. IBM AIX running on the System p5s had less than one unplanned outage incident per server in a 12 month period. More impressively, the IBM servers experience no Tier 3 outages. Tier 3 outages are the most severe and usually involve more than four hours or a half-day worth of downtime and can also result in lost data.
• HP UX also performed well though HP servers notch approximately 25 minutes more downtime than IBM servers, depending on model and configuration – or just under 40 minutes per server, per annum downtime.
• IT managers spend approximately 11minutes to apply patches to IBM servers running the AIX operating system, which is again, the least amount of time spent patching any server or operating system. The open source Ubuntu distribution is a close second with IT managers spending 12 minutes to apply patches, while IT managers in the Apple Mac OS X 10.x. Novell SuSE and customized Linux distribution environments each spend 15 to 19 minutes applying patches.
• IBM also took top honors in another important category: IBM Power servers and AIX experience the lowest amount of the more severe Tier 2 and Tier 3 outages combined of any server hardware or server operating system. The combined total of Tier 2 and Tier 3 outages accounted for just 19% of all per server, per annum failures.
• Microsoft Windows Server 2003 and Windows Server 2008 showed the biggest improvements of any of the vendors. The Windows Server 2003 and 2008 operating systems running on Intel-based platforms saw a 35% reduction in the amount of unplanned per server, per annum downtime from 3.77 hours in 2008 to 2.42 hours in 2009. The number of annual Windows Server Tier 3 outages also decreased by 31% year over year and the time spent applying patches similarly decline by 35% from last year to 32 minutes in 2009.
• This year’s survey for the first time, also incorporated reliability results for the Apple Mac and OS X 10.x OS platform.  The survey respondents indicated that Apple products are extremely competitive in an enterprise setting. IT managers spend approximately 15 minutes per server to apply patches and Apple Macs recorded just under 40 minutes of per server, per annum downtime.

Two out of five businesses – 40% – report that their major business applications require higher availability rates than they did two or three years ago. However an overwhelming 81% are unable to quantify the cost of downtime and only a small 5% minority of businesses are willing to spend whatever it takes to guarantee the highest levels of application availability 99.99% and above. Those are the results of the latest ITIC survey which polled C-level executives and IT managers at 300 corporations worldwide.

ITIC partnered with Stratus Technologies in Maynard, Ma. a vendor that specializes in high availability and fault tolerant hardware and software solutions, to compose the Web-based survey. ITIC conducted this blind, non-vendor and non-product specific survey which polled businesses on their application availability requirements, virtualization and the compliance rate of their service level agreements (SLAs). None of the respondents received any remuneration. The Web-based survey consisted of multiple choice and essay questions. ITIC analysts also conducted two dozen first person customer interviews to obtain detailed anecdotal data.

Respondents ranged from SMBs with 100 users to very large enterprises with over 100,000 end users. Industries represented: academic, advertising, aerospace, banking, communications, consumer products, defense, energy, finance, government, healthcare, insurance, IT services, legal, manufacturing, media and entertainment, telecommunications, transportation, and utilities. None of the survey respondents received any remuneration for their participation. The respondents hailed from 15 countries; 85% were based in North America.

Survey Highlights

The survey results uncovered many “disconnects” between the levels of application reliability that corporate enterprises profess to need and the availability rates their systems and applications actually deliver. Additionally, a significant portion of the survey respondents had difficulty defining what constitutes high application availability; do not specifically track downtime and could not quantify or qualify the cost of downtime and its impact on their network operations and business.

Among the other survey highlights:

• A 54% majority of IT managers and executives surveyed said more than two-thirds of their companies’ applications require the highest level of availability – 99.99% — or four nines of uptime.
• Over half – 52% of survey respondents said that virtualization technology increases application uptime and availability; only 4% said availability decreased as a result of virtualization deployments.
• In response to the question, “which aspect of application availability is most important” to the business, 59% of those polled cited the prevention of unplanned downtime as being most crucial; 40% said disaster recovery and business continuity were most important; 38% said that minimizing planned downtime to apply patches and upgrades was their top priority; 16% said the ability to meet SLAs was most important and 40% of the survey respondents said all of the choices were equally crucial to their business needs.
• Some 41% said they would be satisfied with conventional 99% to 99.9% (the equivalent of two or three nines) availability for their most critical applications. Ninety-nine percent or 99.9% does not qualify as a high-availability or continuous-availability solution.
• An overwhelming 81% of survey respondents said the number of applications that demand high availability has increased in the past two-to-three years.
• Of those who said they have been unable to meet service level agreements (SLAs), 72% can’t or don’t keep track of the cost and productivity losses created by downtime.
• Budgetary constraints are a gating factor prohibiting many organizations from installing software solutions that would improve application availability. Overall, 70% of the survey respondents said they lacked the funds to purchase value-added availability solutions (40%); or were unsure how much or if their companies would spend to guarantee application availability (30%).
• Of the 30% of businesses that quantified how much their firms would spend on availability solutions, 3% indicated they would spend $2,000 to $4,000; 8% said $4,000 to $5,000; another 3% said $5,000 to $10,000; 11% — mainly large enterprises indicated they were willing to allocate $10,000 to $15,000 to ensure application availability and 5% said they would spend “whatever it takes.”

According to the survey findings, just under half of all businesses – 49% – lack the budget for high availability technology and 40% of the respondents reported they don’t understand what qualifies as high availability. An overwhelming eight out of 10 IT managers – 80% — are unable to quantify the cost of downtime to their C-level executives.

To reiterate, the ITIC survey polled users on the various aspects and impact of application availability and downtime but it did not specify any products or vendors.

The survey results supplemented by ITIC first person interviews with IT managers and C-level executives clearly shows that on a visceral level, businesses are very aware of the need for increased application availability has grown. This is particularly true in light of the emergence of new technologies like application and desktop virtualization, cloud computing, Service Oriented Architecture (SOA). The fast growing remote, mobile and telecommuting end user population utilizes unified communications and collaboration applications and utilities is also spurring the need for greater application availability and reliability.

High Application Availability Not a Reality for 80% of Businesses

The survey results clearly show that network uptime isn’t keeping pace with the need for application availability. At the same time, IT managers and C-level executives interviewed by ITIC did comprehend the business risks associated with downtime, even though most are unable to quantify the cost of downtime or qualify the impact to the corporation, its customers, suppliers and business partners when unplanned application and network outages occur.

“We are continually being asked to do more with less,” said an IT manager at a large enterprise in the Northeast. “We are now at a point, where the number of complex systems requiring expert knowledge has exceeded the headcount needed to maintain them … I am dreading vacation season,” he added.

Another executive at an Application Service provider acknowledged that even though his firm’s SLA guarantees to customers are a modest 98%, it has on occasion, been unable to meet those goals. The executive said his firm compensated one of its clients for a significant outage incident. “We had a half day outage a couple of years ago which cost us in excess of $40,000 in goodwill payouts to a handful of our clients, despite the fact that it was the first outage in five years,” he said.

Another user said a lack of funds prevented his firm from allocating capital expenditure monies to purchase solutions that would guarantee 99.99% application availability. “Our biggest concern is keeping what we have running and available. Change usually costs money, and at the moment our budgets are simply in survival mode,” he said.

Another VP of IT at a New Jersey-based business said that ignorance is not bliss. “If people knew the actual dollar value their applications and customers represent, they’d already have the necessary software availability solutions in place to safeguard applications,” he said. “Yes, it does cost money to purchase application availability solutions, but we’d rather pay now, then wait for something to fail and pay more later,” the VP of IT said.

Overall, the survey results show that the inability of users to put valid metrics and cost formulas in place to track and quantify what uptime means to their organization is woefully inadequate and many corporations are courting disaster.

ITIC advises businesses to track downtime, the actual cost of downtime to the organization and to take the necessary steps to qualify the impact of downtime including lost data, potential liability risks e.g. lost business, lost customers, potential lawsuits and damage to the company’s reputation. Once a company can quantify the amount of downtime associated with its main line of business applications, the impact of downtime and the risk to the business, it can then make an accurate assessment of whether or not its current IT infrastructure adequately supports the degree of application availability the corporation needs to maintain its SLAs.