Cisco Partner Study of SMBs and Virtualization Highlights Adoption Trends and Benefits

By Peter Bernstein November 04, 2013

We all have read a lot about virtualization and it benefits. However, the tendency is to focus on what is going on in larger enterprises.  A recent whitepaper entitled Virtualization: The Public Knowledge Gap, revealed that 40 percent of information workers had not heard of server or desktop virtualization, and a group of Cisco partners decided to delve deeper into what is going on with virtualization and the small to medium business (SMB) market.  

As prepared by The Blackstone Group, the new Cisco Flexpod Express Study, Virtualization at Small and Medium Sized Firms on the Rise, says that despite the knowledge gap with workers there is lots to cheer about.  In fact, the report notes right at the outset that:

While more publicly known trends such as BYOD (Bring-Your-Own-Device) and cloud computing are dominating headlines, virtualization is creating a more efficient IT department behind the scenes.

Virtualization is a key tool for improving enterprise efficiency and effectiveness

The nationwide survey on which the report is based was conducted in September 2013 among 150 IT professionals (manager level and above) employed by midsize organizations (50-500 employees).

An interesting graphic really tells the story.

Source:  Virtualization at Small and Medium Sized Firms on the Rise

What the study reveals is that regardless of enterprise size or budget, IT professionals not only understand the value of virtualization but many are currently realizing the benefits of adoption and expect to increase spending 20 percent over the next two years on various types of virtualization.  The expectation of respondents is that virtualization will be their information and communications platform of the future and they are well on their way to making this a fact.

So where are enterprises spending virtualization dollars?

Source:  Virtualization at Small and Medium Sized Firms on the Rise

While larger companies were more likely to be using most of these applications, server virtualization was particularly popular among SMBs (50-100 employee companies).

Nearly 70 percent of SMBs were moving servers from hardware to software to reduce server sprawl and maintenance costs.

Storage virtualization was another popular SMB application with 53 percent implementing it as compared to just 42 percent of larger companies.

With cost being identified as an inhibitor of accelerated adoption, it was not surprising that Virtual Desktop Infrastructure (VDI) was viewed as a luxury with 60 percent of medium-sized companies employing VDI compared to 42 percent of small companies. Those with IT budgets over $100,000 also utilized VDI 62 percent of the time, well below the 35 percent using them with budgets under $100,000.

What are the benefits being received by respondents?

As ranked based on answers to a question asking what the top three benefits of virtualization are for their organizations, respondents provided a list that tracks with the top benefits the vendors of virtualization typically tout.

Source:  Virtualization at Small and Medium Sized Firms on the Rise

While there are some interesting differences based on size of enterprise concerning what is most important as a virtualization benefit, the authors concluded that: “In general, it appeared smaller firms were using virtualization to improve efficiencies with a limited budget while the larger companies look to it as a means of growth.”

In line with the previous study findings about a lack of awareness of the benefits of virtualization amongst employees, the study found much more enthusiasm for virtualization at higher levels of management than lower.  In fact, t he authors noted that the key to accelerated growth in adoption lies in increased awareness of the benefits in the general public.  The findings that 65 percent of IT professionals were concerned about the lack of knowledge, and 70 percent expressing the view that top level non-IT management is not familiar enough with the benefits of virtualization, show there is lots of room for education to make a difference in adoption.

What does seem indisputable from the report is the conclusion that virtualization is no longer a luxury but rather is a necessity for businesses of any size, but particularly SMBs, seeking to have IT become more efficient and effective.  Operational excellence is the objective which in turn means the ability to provide better customer experiences internally and externally, and enables creation of sustainable competitive advantage.  One way to sum all of this up is to say it points to (double entendre intended) “virtual assurance” on a host of fronts.


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