Virtualization For Small Businesses: When Does It Make Sense?

There's seems to be a bit of a controversy raging over the demographics of SMB virtualization.

VMware says the technology speeds SMB's routine IT administrative tasks, application availability, response to changing business needs, backup and data protection, and business continuity preparedness, among other benefits. Dell. meanwhile, says it's often not worth it for smaller companies.

Actually, of course, they're both right -- and they're both wrong.

A new VMware survey -- The Benefits of Virtualization for Small and Medium Businesses -- covered 309 SMBs with between 20 and 1,000 employees, not necessarily those currently employing virtualization.

Among many other things, it reported that "with virtualization SMBs are reducing the time spent on routine IT administrative tasks, such as adding and managing new server workloads, adding new employees or developing and launching new applications; they are also becoming more responsive to business needs" and that "virtualization can also reduce the very real risks of IT outages and data loss for SMBs."

According to the survey:

"SMBs are adopting virtualization for a variety of reasons. The number one reason cited is to improve server utilization; 72% of SMBs chose virtualization for this reason. But that’s not the only benefit: 57% sought to reduce or contain the number of servers, 49% to improve security, 48% to improve availability and uptime, 47% to improve server and application management, and 47% to improve data backup and protection."

It's not surprising that a virtualization vendor would extol the virtues of virtualization, but the push into smaller companies was a particularly energetic. VMware's Joe Andrews, group manager of product marketing, told The Register "What we have seen is that the smaller the company, the faster they will go 100% for virtualization. It takes smaller companies more time to adopt virtualization, but once they start, they go in for it in a big way."

And the survey indicates that even SMBs who haven't yet turned to virtualization remain interested: interest in virtualization is high among non-adopters. A third (34%) plan to go virtual within a year. One in six (17%) are looking for the budget to do so, and another third (33%) are interested in learning more. Only one in six have no interest.

Ironically, they may be the smart ones, at least according to Dell's Erik Dithmer, general manager of the company's SMB Americas Division.

BusinessWeek SMB columnist -- and bMighty interviewee, Gene Marks recently quoted Dithmer saying that small companies don't get much benefit from virtualization: "If you've got five servers running at even 30%-45% capacity, but they're running smoothly, then you'll only wind up spending a bunch of money to save a little money, if any at all."

"That's called honesty," Marks adds. "Most of the 27 million small business owners in this country have little need for virtualization. Dithmer gets that most of us have fewer than five or six servers in our companies. He understands that most of us are not running high-growth, high-storage-type applications."

So, I asked Andrews how big a company needs to be before virtualization makes sense. "That's a really interesting question," he replied. "Where is that magic line?"

To answer it, he noted that according to the VMware survey, the company is seeing the fastest adoption in very small companies, those with fewer than 100 employees. With a handful of servers, you can still get consolidation benefits, Andrews claimed, but reiterated that virtualization offers SMBs other values as well, including integrated backup, business continuity, and high availability.

With VMware vSphere Essentials, Andrews said, SMBs can get virtualization for about $300 per server, about what they'd spend on a server warranty pack -- and also get those other advantages in an integrated solution.

But Marks poo-pooh's some of those virtualization benefits as well. For claims of reduced downtime and data loss, he asks, "What about the new single point of failure?" He also isn't convinced by some vendor's claims of space and energy savings, saying they don't add up to much for most small companies.

So who's right? Like I said earlier, they're both are. And they're both wrong, too.

There are plenty of very real benefits for SMB virtualization, but only if your company and IT operation are big enough to take advantage of them -- or, as even Marks acknowledges, if you're about to replace your servers anyway.

For really, really small companies, though, simpler is often better. In many cases, they'd be better off moving to cloud computing solutions, and avoiding having to deal with servers at all.

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