Friday, February 6, 2015

Virtualization: There’s got to be more!

Virtualization: There’s got to be more!  

Porting to Intel and Virtual Machines is a technical implementation detail not a business solution.  

When vendors are asked about their virtualization strategy you often hear a common answer.  They say they’re “virtual” since they ported their software to Intel.   What’s the value proposition?  Porting to Intel isn’t it. Sure it reduces CAPEX, at the expense of performance.   All it really does is shift industry revenue, power and influence from the Broadcoms of the world to Intel.  Plus, we now know that if CAPEX goes to ZERO less than 33% of CxO’s top of mind business problems are solved.  When pressed for the rest of their virtualization strategy they say the run on virtual machines in a data center.  OK, and then what? 

Let’s assume they perform three functions called A, B and C.  They port them to Intel and then run them on virtual machines (VMs).    Shifting revenue from Broadcom to Intel is a technical implementation detail and not a business solution.  Service providers should be thinking there’s got to be more

The logical question to ask is whether A, B and C are the right functions in the virtual world.  Just because they were required in yesterday’s environment does not mean they are required in the virtual world.   Do you really need 20% of A and 60% of B?  Do you really need 150% of C?  You get the picture.
Service providers will be spending billions of dollars moving to the virtual world they should be asking themselves, why?   Sure there’s a benefit to take the A’s, B’s and C’s of today’s world to virtual machines.  But is it really enough?  This is a one in a lifetime transformation and a fight for ultimate survival.  SP’s need to ask for more. 

Vendors on the other hand need to be asking themselves similar questions.  Is porting to Intel enough?  What can we do that’s game changing in the virtual world?  The answer, IMHO, to the first question is No Way.  The answer to the second question depends on the vendor’s core competencies, ecosystem presence, business strategy et al.    The good news is that ACG Research can help you answer this second question.  Give us a shout.