Migrating an IT organization from a primarily physical infrastructure to the virtual world brings significant organizational challenges that go well beyond the direct purview of CIOs and their team members.

With roughly 2/3rds of the average IT budget earmarked for managing day-to-day infrastructure or operations overhead and pressure from management to produce better-faster-cheaper results from basically flat budgets, CIOs are looking to virtualization to decrease costs while not degrading service levels in the process.

Wikibon has written extensively on the subject of virtualization and its impact on budgets. Virtualization technologies - especially when applied to server and storage assets - have the potential to free up a significant percentage of resources that can be reallocated to new projects and help drive business innovation or top line growth. Wikibon’s recent Peer Incite focused on Oracle and VMware shed light on specific application areas to target but also cautioned users to plan carefully and communicate the strategy clearly both to the IT organization and to the business lines that they support.

Transforming the IT Organization

In the physical world, IT is organized in stovepipes - servers, storage, database admin, network admin, etc. In a virtual world, where you're placing an abstraction layer in between the physical and logical (i.e. the hypervisor) these go away. Thus, IT organizations will need to flatten the organization and focus teams on shared incentives. In addition, IT will need to get buy-in from application development heads and the lines of business.

Selling Virtualization to the Business

Business leaders and application owners who are used to having dedicated hardware and services to support their apps will need to be educated on the benefits of virtualization for them including lower cost of computing – especially when chargebacks are involved. Other benefits include budget to tackle additional projects, higher application availability as well as improved failover capabilities.

Concerns

CIOs should be cautious of vendor claims that any application, no matter how monolithic, can be virtualized with ease. For example, according to several expert sources recently interviewed by Wikibon, databases such as Oracle place “significant demands on the underlying runtime and infrastructure due to their need for transactions that can span network and storage I/O usually simultaneously.” Since x86 hypervisors, like VMware, are new, they are still evolving this capability. For more detailed information, review this White Paper from VMware.

Bottom Line

When implemented with care, virtualization technology can provide many benefits to both IT and the business lines it supports. CIOs will need to rethink their IT organizational structure and effectively communicate these changes and the benefits to their business line customers.

Action Item: Start small and communicate effectively. Most virtualization experts and IT organizations that have already gone through the process recommend starting with smaller, less mission-critical applications first and making sure the effected business units and IT personnel are on board with the strategy.

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