By Tom Steinert-Threlkeld Virtualization will drive Wall Street demand for Intel Corp.'s next-generation Xeon 5500 processors, according to Sean Mahoney, Intel's chief sales and marketing officer. Financial firms are striving to consolidate storage onto fewer devices, whose greater capacity can be split among numerous virtual machines; divvy out applications as needed from central servers, rather than having them reside on desktops and laptops; and even virtualize processing by splitting up compute power into many virtual servers. But Scott Ross, executive director of high-performance computing at UBS Investment Bank, has a different idea: Just replace old servers with newer ones. Ross is recommending that UBS replace all its existing servers, which use the Harpertown generation of Intel processors, with servers based on the new processors. This, he said, will "compress" the number of servers in use by as much as one-tenth. Ross is "lucky," said Martin Reynolds, VP at research firm Gartner. "He's got applications that can fully use the processor" in each server's microelectronic brain. The UBS applications are calculation-intensive and use plenty of input-output bandwidth. But more importantly, said Reynolds, they use "well-understood behavior" to calculate prices, match orders and analyze risks. More general-purpose businesses would be better off with virtualization, where different aspects of a problem can be thrown at different virtual machines. UBS can put all of its processing power into its pricing and risk analysis needs. At UBS, the older hardware will not go away, but will be put to more general purposes, according to Ross. The servers no longer qualify as high-performance computers. This article can also be found at SecuritiesIndustry.com.

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