Small and midsize businesses turn to virtualization for benefits beyond cost, says VMware

According to new research, the acceleration of virtualization adoption will see twice as many SMBs become more than 80% virtualized by 2014, as they look to drive efficiencies and embrace a move toward cloud computing.

The research, conducted by Canalys among 350 channel partners serving SMBs across EMEA, found that of SMBs who have adopted virtualization, 48% have virtualized the basic IT infrastructure of their businesses. Over the next two years, however, 75% of SMBs are expected to expand their virtualization programs to include business-critical applications and more. In fact, channel partners predict that 38% of these companies will have more than 80% of their businesses virtualized, as they move toward IT as a Service, up from 20% of companies today.

The reasons behind this extend beyond pure cost savings: reducing costs is the more immediate driving factor (rated most important and second most important by 71% of respondents) to virtualize, but it's closely followed by the desire to ensure business continuity and improve hardware utilization. In terms of the over arching business priorities for SMBs, beyond technology, cost reductions (rated as highly important or important by 83%), business continuity (79%) and business agility (75%) emerge as the top three, showing alignment between immediate virtualization drivers and longer-term objectives. Furthermore, the majority (86%) agree that virtualization and cloud computing are connected.

"SMBs are undoubtedly recognizing the many benefits virtualization can deliver," said Alastair Edwards, principal analyst, Canalys. "It's a tough economic environment at the moment, however, and organisations are getting pulled in many different directions, with costs being scrutinized at every step. Virtualization is being seen as a solution that delivers cost savings as well as broader business benefits; as a result, within two years, channel partners predict that SMBs are planning a rapid rate of virtualization adoption, with the majority of SMBs realising the benefits heavily virtualized environments can deliver. Savvy organisations are those making the connection between IT investment and more holistic business priorities, and are virtualizing today to gain competitive advantage."

Of the main barriers holding back further adoption, upfront costs and virtualization not registering as a short-term priority were those cited by channel partners supplying the SMB market. Tellingly, a lack of understanding was the third decisive factor, suggesting the need for further education from vendors and partners on exactly what virtualization can deliver.

"Many tens of thousands of SMBs across EMEA have already embraced virtualization and this research indicates this may just be the tip of the iceberg in terms of the depth and breadth of SMB adoption," said John Churchhouse, EMEA SMB director at VMware. "VMware has intensified its commitment to SMBs through its Real World Advantage initiative and offers products and bundles tailored to their specific needs. There's a tremendous opportunity here for channel partners to work collaboratively with VMware to drive awareness for SMBs and jointly assist them on their virtualization journey and the move to cloud computing."

"There is a difference between those companies that see IT as a cost centre and those for whom IT is a strategic priority," says Sam Routledge, solutions director, at UK reseller Softcat Ltd. "For those who see IT as a cost, virtualization doesn't go beyond financial savings. For advanced companies, they want a stable IT platform that is highly available and which aligns with their business strategy, for example; being able to open new offices quickly as they expand the organisation."

As part of the research, Canalys also conducted 12 in-depth EMEA partner interviews on the major trends they are seeing in virtualization amongst SMBs. Feedback from these reinforced the drivers for virtualization raised in the study, but also the need for greater support in educating end users, including: joint marketing activities (both campaigns and roadshows), increased training and certification, and more tailored finance packages and solution bundles.