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Solving the Unique Computing Challenges of Small and Mid-sized Businesses
Dick Csaplar
JUN 12, 2013 08:00 AM
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In May 2012, Aberdeen surveyed 137 enterprises to learn about their server environments.This report focuses on the role virtualization plays in SMB IT departments and the importance servers play in maximizing IT investments. The full report can be found at "Solving the Unique Computing Challenges of Small and Mid-sized Businesses."

SMBs Being Asked to do More with Less

The average SMB IT budget was essentially flat between 2011 and 2012. The challenges are especially acute for that portion of the IT budget that supports servers and applications.

table 1: smb budgets

Source: Aberdeen Group, May 2012

In addition to server challenges, SMB IT departments are required to store ever increasing amounts of data. SMBs reported, on average, that the amount of data they need to store grew 32% from 2011 to 2012. That means that the amount of data to be stored at the average SMB organization doubles every 2.5 years. This doubling means twice the number of storage devices, twice the amount of space in the datacenter, and most importantly, twice the spending. SMBs reported that they spent 12% of their IT budget on storage in 2012. With it doubling every 2.5 years, storage spending will grow from 12% to 24% to 48% if left unmanaged — a reality that cannot be tolerated in today’s IT environment. Any computing platform chosen by SMBs needs to include storage as part of the overall solution.

Benefits of Server Virtualization

SMBs with widely deployed server virtualization report many operational and financial benefits. Table 2 qualifies two of them, a 53% decrease in the amount of time it takes to deploy new applications and a 30% reduction in the amount of application downtime. Other benefits cited include a reduction in datacenter space, a reduction in the amount spent for power and cooling, and reduced overall IT spending.

table 2: operational benefits

Source: Aberdeen Group, May 2012

The Hardware Platform Matters

With virtualization, server hardware plays an increasingly important role in both speed and reliability. Virtualization allows for more applications to be run on a single server than ever before. A new server with faster processing speeds benefits a larger number of applications. In addition, the higher reliability of today’s servers is very important as a single server failure can now affect many applications, and hence, many users.

table 3: Server utilization rates

Source: Aberdeen Group, May 2012

SMBs report they have been able to consolidate almost 10 older servers onto a single server with virtualization. That means 90% less space, power, service contracts, and management required from IT. Companies should retire the older, less efficient servers and leave the newer, more powerful servers to carry the increased workload.

The average server utilization rate of SMB companies today is 45%. This means that only about 45% of the processing capability is used by the applications with the remaining 55% wasted. Server vendors recommend targeting a utilization rate of 80%, using most of the available computing power but leaving a buffer of about 20% for short term spikes in demand.

To gain the most return on their IT spending, SMBs should continue to deploy server virtualization for all their applications, even those in Tier 1. The high performance of today’s newest servers will benefit more applications and continue to provide greater savings in power, space, and application management. It is the hardware platform that drives the savings from server virtualization.

Summary: Today’s Servers are Virtualization Platforms

The best servers today are those that enable high levels of server virtualization so their users can reap the financial and operational benefits described in this report.

  • There is a direct correlation between the number of hosted VMs and the server utilization rate. Targeting the 80% utilization goal reduces the number of servers in the datacenter and delivers the highest level of return on server investment.
  • Companies with high rates of server virtualization can focus IT spending and headcount on higher priority projects. When servers and applications can be deployed and managed efficiently, IT has time to focus on projects with more positive direct impact on company business objectives.

Talk to organizations that have already done it. Thirty percent (30%) of responding SMB organizations have server virtualization rates over 80%. Highly virtualized environments are not bleeding-edge systems.

The servers that best support the new virtualization environment will have the fastest positive ROI on the company IT investment.

by Dick Csaplar
Senior Research Analyst, Virtualization and the Cloud
IT Infrastructure Group
Aberdeen Group

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