When It Comes to Virtualization, Are We There Yet?

As much as we hear about virtualization, it can be surprising to get actual numbers on deployments and realize how low they remain — just 18-19 percent of workloads on enterprise x86 servers have actually been virtualized, according to new data released by Lazard Capital Markets. The investment bank expects 48 percent of enterprise workloads to be virtualized by 2012, which means the number of virtual machines will grow to 58 million from 5.8 million in 2008. So the software to manage virtualized machines is going to be hot, but there’s still room for growth.

The other things adding spice to the commodity hypervisor market are the growth in server virtualization among small- to medium-sized businesses and the next level of virtualization– virtualizing the desktop. Virtualizing the desktop allows IT departments to store a copy of desktops on a server and deliver it to a remote client or PC.  This is a boon for Citrix, which has been pushing desktop virtualization for a while and appears to be the leader over rival VMware when it comes to customer interest in the technology, according to the Lazard report issued on Friday. A Jefferies research report out this morning notes that in a survey of the top 25  software resellers, 44 percent said their customers has expressed an interest in virtualizing the desktop. From the note:

Some VARs see VDI as the next logical step after app virtualization. Moreover, Windows 7 upgrades are causing IT depts to reassess their entire desktop infrastructure. Ironically, some customers are looking to use VDI as a way to increase life of their existing hardware.

But beyond the battle between VMware and Citrix for enterprise server and desktop virtualization, SMBs are accelerating their virtualization plans and choosing Microsoft’s Hyper-V in order to do so. Before 2009, some 30 percent of global organizations had started virtualizing — that number which has since doubled, driven predominantly by SMBs, Lazard said. SMB penetration is expected to exceed large enterprise penetration by next year, according to Lazard. So it looks like VMware will have to work hard to stay ahead of where the virtualization market is growing — on the desktop and with SMBs.

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