The virtual opportunity

With Australia and New Zealand having the highest rate of adoption of virtualisation in the world so far, the technology has now evolved to become one of the hottest topics in IT.

Indeed the 2008 CMP Channel State of the Market Study found that nearly one in five solution providers surveyed are already currently selling or recommending virtualisation products of some sort, including server and/or storage virtualisation. According to the CMP Channel’s first study on virtualisation, VARs that sell server virtualisation products, such as technology from VMware, SWsoft, Herndon and Citrix Systems, are seeing that technology already account for an average of 20 percent of their revenue.

The great thing about virtualisation is that it addresses so many of the current issues IT departments face today. By increasing utilisation and improving management, it promotes server consolidation, resulting in significant data centre savings, compounded by savings in airconditioning, rack space, staffing levels and compliance costs. And with environmental concerns now at the heart of all good business, virtualisation is also being pushed as a ‘Green’ technology – an aspect that resellers have been quick to pick up on.

Brett Lightfoot is national Microsoft solutions and alliance manager for solutions provider Getronics Australia. Alongside acknowledging the various ways that virtualisation can help an organisation reduce its carbon footprint, Lightfoot agrees that virtualisation “has certainly created a significant market enthusiasm and has generated a lot of business for a range of ICT services and solutions over the past 18 months”.

He believes virtualisation is not a silo solution, but generally touches every area of a business’s ICT infrastructure. “This creates opportunities across the board, ranging from consulting and software supply to network design and ongoing support.

“For many businesses, virtualisation offers not only significant cost savings, but also a highly agile platform that can help an organisation grow. The key to achieving this is for organisations to understand what the best solution mix is to suit their business,” he said.
Although virtualisation technology is not new, the emerging business needs which make virtualisation a good solution are. This is where the opportunity for resellers lies and is particularly so for those who have already successfully migrated their business from product margin to services.

Patrik Bihammar, senior analyst, software for analyst group IDC, believes that virtualisation provides a strong opportunity for the channel “in which vendors are now heavily leaning on it to provide consulting and integration services in order to meet demand”.

“With cross-selling opportunities including new servers, additional storage, thin clients for desktop virtualisation and vendors who are only too keen to provide training and other partner enablement, opportunities abound.”

Lightfoot agrees. “Virtualisation is an area that Getronics has spent a lot of time in developing, with a suite of services designed to help customers quickly assess a business case against various technology solutions. This involves not only defining a vision for the future, but also understanding the current baseline to ensure that the business case makes sense.”

He said that with Microsoft making its mark in the virtualisation arena, “the technology is within easy reach of most organisations, however many are still coming to grips with how it relates to quantifiable business benefits”.

A question of skills

The task of building a suitable skill base in any rapidly growing market often requires a lot of planning – a challenge that is aided by a host of vendor-run programs.

These can be beneficial as Lightfoot testifies. “Engaging with Microsoft on a strategic level helps us to plan for the future. We have access to resources that are not available to the general public and this has helped us keep our business aligned with market conditions.”

David Blackman, director of partner organisation for VMware ANZ, tells CRN that with knowledge of the technologies still comparatively limited – especially amongst smaller, often regional resellers – education and ultimately certification is the key to profit.

VMware offers a range of programs such as its VMware Certified Professional (VCP) certification and its Virtual Desktop Infrastructure (VDI) program.

“These are great starting points to understand virtualisation as we believe that there is a direct correlation between success and certification.”

Blackman said VMware has seen a rapid influx of partners, keen to use its virtualisation technologies as a big upsale opportunity across a range of marketplaces. Accordingly, he said, “resellers need to work towards their strengths, but also differentiate themselves from the competition”.

David Booth is HP national channel sales manager for enterprise servers and storage. He said it is “often those larger resellers that have a strong technical leaning, that seem to be really educating themselves about the benefits of virtualisation and applying this to customer needs”.

He maintains self-education is paramount if resellers want to avoid missing the virtual boat. “Talking amongst themselves, attending seminars and using associations such as the Australian Information Industry Association, are just some of the ways resellers can extend their understanding,” he said.

Martin Gregory is director of server and tools for Microsoft Australia. “In essence, IT managers are managing just a part of the overall business where increasing the efficiency of servers and the reduction of costs are more often than not, the main business drivers.

“Virtualisation can address these issues and bearing in mind that experience in the area is still limited, resellers are sitting on
a big opportunity to promote themselves.”

Desktop virtualisation

As desktop virtualisation gains momentum and becomes increasingly viewed as the optimal operating environment, Gregory said that “management is the most important issue for customers rushing to maintain control of their desktop environments and virtualisation is nigh on impossible without good management”.

Mark Magill, product manager enterprise business group, Alcaltel-Lucent, said desktop virtualisation presents strong opportunity for the channel, following the vendor’s release of its virtual ‘Business Integrated Communications Solution’ (BiCS), which can be controlled and delivered to end-users in a more manageable way than ever before. “The new environment allows IT managers to integrate our real-time communications more easily and efficiently as required.

“Virtualisation has really allowed us to build the BiCs solution with more applications and allow our channel partners to add in and learn about new applications much quicker, thus really increasing their value-add proposition to more and larger customers.”

He adds: “If resellers are not looking at opportunities within virtualisation, then they can be sure that their customers are.”

Although there is a massive market for virtualisation, Gregory admits that it may not be suitable for everyone. In order to help its partners to decide whether a customer is a good candidate for the technologies, Gregory points to a range of Microsoft assessment tools including its Virtualisation ROI Toolkit, as a way for them to build skills and use the information as a starting point for customers.

IDC’s Bihammar states that with areas such as storage, security and management being most heavily impacted by virtualisation, the skills relating to these will continue to be key for resellers. However, he points out that they should consider ‘skilling up’ on several virtualisation offerings from the range of vendors, rather than just focusing on one.

One belief within the market which VMware is keen to dispel is that with the rise of virtualisation, resellers would find themselves disadvantaged with lower margins on hardware. “Many of our partners are now realising this is not true as they end up needing to purchase for example, larger amounts of storage hardware in order to accommodate the virtualisation technologies,” said Blackman. “And these margins are set to increase too, as we have typically found that for every $1 spent on virtualisation software, $6 is spent on hardware, services and storage software.”

Market growth

IDC said it has high expectations on the continued growth in the market, with future opportunities to be found not only in server and desktop virtualisation projects, but also in disaster recovery.

With virtualisation being seen to solve so many IT department issues, it is not surprising that it is commonly being viewed as an easy sell. Blackman goes as far as to say that it is a ‘no brainer’ as to why the channel should look at the opportunities. “I think that many customers are now realising that it is not just a question of whether they will virtualise their operations, but more a question of when they will virtualise.”