VARs Cashing In On Virtualization Craze

As more enterprises turn to virtualization to cope with tighter budgets and smaller staffs, VARs seize the opportunity.

In these tough economic times no technology offers VARs a “recession-proof" path to profitability, but one comes close – virtualization. Demand for virtualization solutions and services is buoyant, and profit margins for VARs are high, say VARs.

“More and more customers are looking at server consolidation and choosing virtualization as the solution because ROI is fast and in some cases, immediate,” said Chris Ward, director of solutions architecture at GreenPages Technology Solutions, a national IT consulting and integration company.

“The opportunities for our virtualized offerings have been exceptional – especially during the last 12 months,” said Tom Blair, vice president of channel sales and strategic alliances at Terremark, a leading global provider of IT infrastructure services.

Blair noted that the lack of capital expenditure during the recession and the shortage of IT personnel mean companies cannot buy the hardware they need to meet their business needs.

“Increasingly CIOs have turned to Terremark and realized they can load their applications on our virtualized platform and save money,” said Blair.

While customers save money with virtualization, VARs can make lots of money by implementing and supporting virtualization solutions.

Ward noted that margins for GreenPages’ virtualization services range from 20 percent to 50 percent, while margins for related hardware sales can be as high as 15 percent.

IT infrastructure overhaul

A long list of vendors – including Dell, Hewlett-Packard, Microsoft and VMware – have rolled out new technologies and VAR programs, and announced strategic partnerships to tap into the seemingly endless stream of opportunities flowing around virtualization.

Last week, Microsoft unveiled Services Ready, a program to provide its gold-certified partners with access to pre-tested, repeatable offerings and best practices for various technologies, including virtualization. The pay-to-play program will cost a VAR $20,000 per service. Microsoft’s virtualization service is designed around Microsoft’s Hyper-V technology, which is gaining market traction.

A recent survey by Forrester Research (Nasdaq:FORR) confirms the health of the virtualization market.

Forrester’s survey of 2,600 technology decision-makers in the United States and Europe found that the majority of companies have adopted server virtualization, and a small but growing number of firms are piloting cloud computing initiatives.

The survey results demonstrate that companies are in the midst of rethinking and overhauling IT infrastructure and client systems, and are seeking greater flexibility, efficiency and performance, said Frank Gillett, principal analyst at Forrester.

Key findings of the survey include: 54 percent of enterprises have implemented x86 server virtualization or plan to within the next 12 months, while 53 percent of SMBs have implemented x86 server virtualization or are doing so within the next 12 months.

Another key finding is that enterprises report virtualizing 31 percent of their operating system (OS) instances today, and SMBs have virtualized about 36 percent of their OS instances. In two years, enterprise respondents expect to virtualize an average of 54 percent of all OS instances, while SMB respondents expect to virtualize 61 percent of all OS instances.

TAGS: Microsoft,virtualization,Dell,VMware,VARs

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