A ‘Virtual' Staple Diet for Solution Providers

The term virtualization is now synonymous with reduction of RoI, increased efficiency and the likes of bringing down the Opex drastically. The market size of the solution has grown at a higher rate then was perceived and the solution became even more important as it provides the backbone of cloud computing which has been atop the priority list for most of the enterprise segment as well as,SMBs.

Virtualization, collaborative applications and CRM applications showed the best performance during the first half of 2012 according to IDC's Semiannual Software Tracker report. For the first half of 2012 (1H12), the worldwide software market grew 4.7% y-o-y reaching a total market size of $167 bn, which was in line with IDC's forecast.

The growth in virtualization undoubtedly has come in from the push from the rapid adoption of BYOD and the resultant apps migration priority for the enterprise CIOs.

"Organizations across India are now adopting virtual desktops proliferating use cases such as BYOD, workshifting, protection of intellectual IT, security, etc, and also facilitating enterprise mobility. Server virtualization is moving towards open source where organizations are opting for open source solutions such as Xen and KVM instead of the proprietary vendors," said Nilesh Goradia, head, pre-sales, India Subcontinent, Citrix.

"Initially applications were built on Windows due to its ubiquitous presence. Now with the proliferation of multitude of operating systems and different form-factor devices, there is a huge demand for delivering windows-based applications on non-windows based platforms such as iOS and Android as well as on devices such as thin clients, tablets and mobiles. Our XenApp solution allows porting of Windows based applications to iOS or Android based platforms," he added.

Also, highlighting the need for storage virtualization, Yogesh Sawant, director, partner sales and Field Alliance Organization (India), Hitachi Data Systems added, "Storage virtualization is the bare minimum requirement to build an agile and fluid cloud storage infrastructure. While organizations have tried to implement cloud services without this technology, they are limited with regard to flexibility. Storage virtualization allows users to scale up and scale down based on the requirements of end customers for cloud offerings. Hitachi Data Systems has numerous partners who have adapted these technologies to provide cloud services to their customers and have seen benefits in Capex and Opex savings."

However, even as one speaks about virtualization in every sphere of IT, ranging from desktops to storage to servers, the question still remains to what extent can virtualization, particularly the server variant bring down the opex as well as take a judicious decision when it comes to opex.

"Perhaps the most important technology trend in recent years, virtualization is moving beyond isolated projects in the datacenter and fundamentally changing the nature of IT organizations from technology hosts to service providers for the business. By deploying application-aware virtualization solutions, organizations can speed the delivery of IT services," said Mitesh Agarwal, director, solution consulting, systems business, Oracle India.
For Arun Gupta, CIO, Cipla, who started virtualizing his servers in late 2011, the transformation was a gradual process.

"We moved applications to a virtualized environment gradually. The investment over the last 2 years was about 5 mn. The benefit has been manifold including reduced number of servers, better capacity utilization, lower capital investment," Gupta added.

There are some benefits on the maintenance, power and cooling fronts, which, for obvious reasons, need to be evaluated by every CIO. Apart from these benefits, server virtualization also brings in some tangible benefits such as simpler management, performance, and uptime of infrastructure.
Server virtualization can save an enterprise up to 40% of its hardware cost. However, that does not mean that an enterprise's entire IT cost comes down drastically. There is a stipulated amount of Capex that is involved in the initial stages of virtualization, which might increase the overall IT expenditure.

IT analyst, consultant, adviser, Sanchit Vir Gogia, said, "There are multiple levels of expenditures, such as in hardware, middleware, OS, IT services, and application levels. There are a lot of traditional applications which will not work in virtual environment. So expenditure will probably increase. It is not a cost reduction story, but cost optimization story which will neutralize cost for the company over the years."

Definitely, virtualization with the right hardware will help mission criticalapplications as well as combat downtime. However, most of the CIOs are now on the lookout to streamline their process in accordance to the requirements of enabling a complete cloud solution and are waiting for the right time when the apps on the virtual servers and processes get stabilized.

Amidst the controversy of the practicability and the claim of increasing RoI, Shweta Baidya, senior research analyst at AMI India noted, "What makes this industry unique is that the participants compete as well as collaborate to offer best-of-breed solutions to the end users."
Desktop virtualization is being adopted by organizations where the cost of maintaining desktops is high; it serves to reduce overall operational expenditures. The key driver for server virtualization is the reduction of overall capital expenditure. Also driving this technology is the need for easy data recovery and business continuity.

It is amidst this backdrop that virtualization has come into focus with vendors like VMware, Citrix, IBM, Microsoft and other majors thinking of the solution as one of the major areas of revenue maximization.

The importance of pure virtualization solutions in both FY'11 and 12 can be understood by merely breaking up the revenue of Citrix; one of the most prominent global players in this field. In FY'11, 58% of Citrix's revenues (worldwide) came from desktop virtualization, 20% from cloud networking and 22% from social collaboration. However, what is poised to come in as a surprise is that by 2015, the share from desktop virtualization is expected to reduce to less than half the overall pie for Citrix.

Competition, however, in this field has grown steadily with each of the vendors playing their cards safe in this field; particularly targeting the SMBs through their channel partners. Each of the vendors have gradually come up with a suite of virtualization solutions catered to meet niche needs of the SMB particularly.

VMware, the channel leader of 2012 (Channel Satisfaction Survey 2012) on the other hand is keeping it tight over servers and network only. According to VMware, with software-defined networking, virtualization principles are applied to network resources, abstracting, pooling and automating them to transcend the limitations of rigid physical architectures. Network services are assigned to each application and remain with it, elastically adapting to its changing requirements. Virtualized networking simplifies provisioning, enhances scalability, simplifies management, and lowers operational costs.

Citrix has been focusing on desktop and servers in the field of virtualization. It has XenDesktop as the product for desktop virtualization, which, according to Citrix is a comprehensive desktop virtualization solution that includes all the capabilities required to deliver desktops, apps and data securely to every user in an enterprise. Instead of juggling thousands of static desktop images, it can manage and update the OS and apps once, from one location, then deliver desktops and apps that are customized to meet the performance, security and mobility requirements of each individual worker. On the other hand, with its product XenServer (for server virtualization), each virtual machine is completely isolated from other machines and is decoupled from the underlying host by a thin layer of software known as a hypervisor. This allows each virtual machine to run different operating systems and applications. Because the machines have been decoupled from the underlying host, the guest can also be moved from one physical server host to another while running, this is known as live migration.

However, the adoption of virtualization as a solution hasn't been very impressive. The AMI Partner's Study stated that of the total IT installed base in the country, only 5 to 10% have been virtualized so far which indeed came in as a big surprise for the enterprise CIOs and vendors alike. Through secondary research AMI has concluded that the small and medium business segment (SMBs; companies with fewer than 999 employees) comprises about 30% of the India virtualization market and is likely to grow exponentially in the next few years.

The Partner's Study came in as a huge indicator of the untapped market that is still waiting for the take-off towards cloud thereby enabling virtualization as the prerequisite.

On the other hand, Garter had predicted in 2009 that by the end of 2013, nearly 40% of global corporate PCs will be on a virtualized environment which, according to recent surveys hasn't turned out to fall in line with the prediction. However, with the rise of BoB and different patterns of Cloud, the Indian IT solutions space is sure to get crammed in 2013 with BoB requiring virtualization of storage as a precondition for the success of BoB and cloud solutions offering complete virtual data storage in data center unknown to the client. Furthermore, the entire enterprise IT set-up can be substituted for cloud.

Adding his views over the current trend, Agarwal added, "Virtualization's impact on the IT industry has been dramatic and will continue to be the most change-driving catalyst for infrastructure and operations software as organizations look for ways to cut costs, better utilize assets, and reduce implementation/management time and complexity."

It is in this perspective that virtualization offers an immense potential for the tier-2 system integrators and channel partners alike.

"The virtualization market in India is still at a nascent stage but there are significant growth opportunities across server, desktop and storage virtualization. As the CIOs increasingly realize the importance of adopting virtualization solutions for business success, the market will continue to see exponential growth in the next few years," Agarwal added.

Considering the opportunity and the market operatability of virtualization, some of the solution providers (SP) are already into this domain although they have come up with cloud stacks thereby enabling as well deploying relative virtualization based solutions.

Future Business wasn't majorly into the cloud space so long with its revenues as low as `7 crore in CY11 accounting for just 1% of the aggregate top line. However, things for Future Business are changing and the company is gearing up its portfolio to emerge as a leading private cloud player in its area of operations. Future Business has a team of 4 personnel dedicated to cloud computing which is likely to rise to atleast 11 by the end of 2012 as a result of its changing focus. According to Jayessh Mehta, director, Future Business, cloud is still an emerging concept with the SMBs ad SMEs still skeptical about the usage or benefits of cloud.

Essentially one of the strongest Microsoft players in India, Techygyan's core focus in cloud has been over the public variant. In its collaboration with the major cloud vendor, Techygyan is offering Microsoft 365 on the cloud platform and recently added Windows InTune to the cloud portfolio besides its regulars in MS Exchange, Lync and Sharepoint across domains as well as offering Windows 7 on rental.

For Techygyan, public cloud is the sole area of focus and it comprises of 15% of the total revenue till Q3 last FY; however, Suresh Ramani, director, Techygyan is optimistic of raising it to more than 25% of the aggregate revenue by the end of FY12-13.

For global players like Allied Digital, cloud services has been churning atleast `69 crore to its gross aggregated revenue since the last FY. After registering 4 clients in USA with a cloud center of excellence in California, Allied Digital finally ventured into the Indian market targeting BFSI, manufacturing and retail as its potential clients. Working solely over the private cloud model, Allied Digital has made an exception amidst global solution providers who are considering public cloud to be the future of computing.

When it comes to solutions and consultancy, Locuz is another forerunner in bringing cloud solutions own its own apart from focusing over traditional partnerships. Although the company started off with its cloud venture very late garnering about 5% of its aggregate revenue, its own stack for private cloud solution is poised to bring in atleast 25% more revenue contribution to its topline this FY.

According to Uttam Majumder, director, Locuz, it took about 1 year for the company to come up with the stack. The stack, besides cutting across different bases and portals will provide orchestration, application virtualization, hosted desktop services and application management besides its regular feature of integrated services.

For QuantM Net, about 16% of its revenues come in from the cloud space.In terms of its cloud portfolio, it has private cloud solutions from its datacentre like ERP, BI, CRM and other business apps. It also hosts applications from its ISP partners and has 3rd party package services. However, it has its own cloud offerings like business continuity services in cloud, back up as a service, IaaS, backed by on-demand DR as primary sources.

Avishek Rakshit
(avishekr@cybermedia.co.in)