By John Adams Servers are about as efficient as the human brain, and that's not a good thing. "Most servers are utilized at only about 10 percent," says Tom Bittman, a vp for Gartner, who says the global market for X86 servers is about $23 billion yearly - a lot of money for servers that mostly twiddle their thumbs. Even worse, a server's energy and space footprint is agnostic to its utilization. "Even if I'm utilizing 5 percent, I'm still almost using full power," Bittman says. Bittman says virtualization, which divides single servers into multiple virtual environments enabling hardware resources to be allocated or shared based on user need, can be a fix for the energy use and financial waste problem. "Your power costs go way down," says Bittman, adding a typical virtualization-enabled server consolidation project can reduce power usage by a ratio of about 12 to 1. "The space savings and hardware usage savings are also obvious." MetLife Bank and Saxo Bank, for example, are using server virtualization to solve several power-draining data center migraines, such as the legacy "one app per server" paradigm born from early Windows functionality and vendor propriety, and the fact that even the smallest servers are now larger than the biggest applications. "In a nutshell, this is good for business, it's good for the economy and it's good for the environment," says Mark LaPenta, CIO of MetLife Bank in Somerset, N.J. In concert with tech partner Fidelity National, MetLife Bank has been gradually migrating its applications to Unix platforms, increasingly leveraging server virtualization as part of that project. LaPenta says virtualization can reduce server counts by about a 1,000 to 80 margin. He also says cable, power whips, cooling equipment and physical space can be reduced substantially. "If you need 200 racks for 1,000 servers, you only need 10 racks for 80 servers. That's obviously less cooling and electric use." At Copenhagaen-based Saxo Bank, a virtualization project was limited to tests of trading software and back office functions, yet it still saved the institution about $1 million in hardware, space, power and cooling costs as the total number of servers at the institution decreased by 36 percent in a period of about a year, the bank says. Moreover, the VMware virtualization deployment enables server resources to be matched to usage needs, an advancement that provides additional intangible energy savings. "This allows us to be more agile with our trading application testing and in how we build applications," says Paul Ronan, head of software delivery for Saxo Bank. The recession could be a gold rush for server virtualization players, with institutions on a long-term IT energy and budget diet. VMware has a headstart, but other firms are entering the market as demand grows. Bittman says VMware had an 89 percent marketshare at the end of 2008, while Microsoft - which entered the market near the end of 2006, controlled about 8 percent and other firms such as Citrix make up the rest of the market. The entry of Microsoft and growth of other firms should cut into VMware's share - Gartner says its share could fall below 70 percent by 2012. But at the same time the marketplace for virtualization technology should grow about 1,100 percent. "Microsoft's entry will certainly shake things up," Bittman says. This article can also be found at AmericanBanker.com.

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