Uncovering the ROI of virtualisation

Some customers who implement virtualisation solutions are not realising the ROI that they originally anticipated, and in many ways they are finding management of their virtualised environment more complex than they originally envisioned.

So as a business, you have implemented a virtualisation project, but you still have high operational costs and a depreciating technology that runs in five year cycles that cost a bomb in the first place. “Huh! That can’t be right”, says the CTO, “I thought my operating budget would be a much smaller number this year, what’s going on?”

What costs were not realised up front? What service levels were not put in place and measured? How can businesses be ‘doing more with less’, but with the same number of resources? All very valid questions. However, there are a number of answers to this ROI puzzle.

Back when virtualisation landed on the doorstep, many organisations saw the immediate benefit of running multiple systems on one piece of hardware, recalling the mainframe days but at a fraction of the cost.

Virtualisation seemed like it would make everyone’s lives easier and less complicated to manage.

A variety of applications such as FTP, IIS, Active Directory, and many others fell in the category of “low hanging fruit” for virtualisation candidates.

Organisations looked at specific applications and thought they would be a breeze to virtualise. Virtualising these applications was so easy and successful that the virtualisation hype quickly grew.

Companies jumped on the bandwagon and did see the benefits of virtualising servers and applications, but it didn’t return value to the business except as cost avoidance for the current year.

Obviously something had changed in the virtual world. What headaches are the IT team facing that have financial impact on the business?

Organisations were not receiving the value for money that they had expected when virtualising. Is managing virtual servers less costly than physical servers?

Unfortunately there is no one answer; individuals need to consider their own business needs. The important consideration is that applications and servers need proper management, whether they are virtual or physical.

Management includes a variety of components including; OS patching, application updates, backup, restore, archive, storage expansion, memory expansion, CPU expansion and issues around fire-fighting. These tasks require people, time and money, regardless of their virtualisation status.

To realise ROI the manpower, time and money need to be measured up front and carefully planned for. Not only as an improvement in service level but as a cost that is returned to the business.

It is important to ask ourselves if everyone’s expectations for virtualisation were realistic. Only projects that take into account the rest of the IT infrastructure will effectively deliver ROI. And remember first and foremost that assumption is the mother of all problems.

ROI can most clearly be seen and measured if businesses follow a clear IT Service Management model. Both this and other ways that businesses can effectively assess their preparedness for virtualisation, prior to implementation, will be discussed in further posts.

Fewer and fewer companies will simply continue to spend money in IT, unless they can sufficiently prove that the spend will not just improve or maintain service, but actually deliver value and cost savings back to the budget.

Andrew McCreath is an Engagement Partner at GlassHouse Technologies. GHT is a global provider of IT infrastructure services enabling organisations to consolidate, virtualise and manage their IT environments.