Trends driving demand for Virtualization & Cloud Computing

In the post-economic turmoil world, even as the global economy pulls out of tough times, business leaders are likely to continue putting pressure on managers to do more with the same or better still, more with less. Tough times have taught some tough lessons and the drive for greater productivity, lower complexity and greater responsiveness is likely to continue.

This combination of changed expectations and also significant advancements in storage, network, computing & security technologies in the meanwhile, opens up some interesting possibilities in the IT world. The following trends are likely to strengthen globally as a result:

•    Shared Services Model: Sharing of assets and/or resources for greater utilization, better scalability and better business continuity planning through dynamic disaster recovery provisioning. The sharing may be done in-house in a captive mode or across organizations through “community sourcing’ initiatives or through external service providers, depending on the type of organizations and information involved. The sharing may even be done across geographies for greater cost effectiveness and disaster recovery preparedness.
•    Standardization: In a world moving towards greater interconnectivity, it is important for organizations to follow global standards and best practices in running their businesses. This will lead to a drive for standardization of IT assets rather than depend on customization for competitive differentiation at significantly larger costs and complexity. As a result, we are likely to witness a wave of consolidation in the IT products sector and emergence of not more than 2-3 large standards globally, that user organizations and IT service providers too would have to align with.  
•    Interoperability: As the world moves towards 2-3 large standards and the user industries get polarized along these, it will also be important for IT systems in these organizations to be able to connect with each other effectively. This will result in the need for vendors of competing standards to provide appropriate hooks and connectors to connect with each other. 
•    IT As A Utility: With rising demand for lower complexity of managing IT, greater RoI on IT spending and better responsiveness, the concept on IT as a utility will gain significant ground. Earlier failed models such as the ASP model are re-emerging in new avatars like the SaaS model as users prefer to pay for only what they use. Besides the applications market, the utility model will pick up traction in the storage, network and computing products too.  
All of the above point towards an important trend, that of greater traction for virtualization, as it enables all of these four forces shaping demand for IT going forward.

Virtualization of storage, network and computing assets would be one of the key ingredients for all of the above. Though it may be impracticable to think of the above to be ubiquitous across all organizations, it would be fair to expect to start seeing increased activity in the non-core, non-critical parts, gradually leading to greater adoption going forward.

We are already witnessing significant traction for Cloud computing adoption as the hype makes way for more realistic evaluation and adoption decisions. Virtualization plays a key role in all of SaaS, IaaS, PaaS and Storage as a Service options associated with Cloud computing.  Virtually all of the major hardware and software vendors and service providers across the globe are taking the Cloud computing paradigm very seriously as it is poised to change the way they do business, forever. This reflects in their existing and planned product and services portfolios.

Besides the large enterprise segment, demand for virtualization would be significant in the greater cost-sensitive SMB market too. Geographically, while in the developed economies virtualization would result from technology refresh cycles and capacity expansion activities, the developing economies will see organizations leap-frog to virtualized environments, creating significant demand.  

As the global economy pulls out of recession and discretionary budgets get freed up, the demand for virtualization services is only going to grow further for the above reasons.