Microsoft Claims Virtualization is Taking Off in Banks and Retail

Published: April 30, 2008

by Alex Woodie

Virtualization is being adopted in the data centers of more than 70 percent of the largest retailers and more than 50 percent of biggest banks, according to two reports released yesterday from Microsoft on the adoption of virtualization. Considering that the IT industry widely believes that only 5 to 10 percent of the world's servers have been virtualized, those are pretty big figures.

Microsoft simultaneously released the two surveys on virtualization, which it commissioned the Washington, D.C.-based research firm KRC Research to research and write. The studies, which were conducted in February and March, sought to gauge the penetration of various forms of virtualization--including operating system, application, storage, network, presentation virtualization--and the reasons businesses are adopting it.

At an amazing 71 percent, there is a very high rate of penetration of virtualization in retail, according to the "Virtualization in Retail Survey 2008," which is based on a survey of 205 technology decision-makers at American retail chains with revenues of $250 million or more.

It's also well above the 5 percent utilization rate that Bob Muglia, senior VP of the Server and Tools unit at Microsoft, talked about earlier this year. Certainly, the number is much smaller among small businesses, which make up the vast majority of businesses in the U.S. and abroad.

In any event, retailers should be viewed as leaders in use of virtualization technology, according to Microsoft's study. Among the reasons virtualization was adopted by those 205 organizations, 35 percent cited central deployment, 31 percent cited energy savings, while 38 percent cited central security. Among the remaining 29 percent who are not yet using virtualization, one quarter say they are considering it, while more than half say the main reason they aren't using it is cost.

The numbers were largely similar in the banking study, creatively titled "Virtualization in Banking Survey 2008," which is based on the responses of 100 IT decision makers in tier-one banks in the United States and United Kingdom that have assets of more than $25 billion.

Among the reasons given for adopting virtualization technologies, 53 percent cited centralized deployment, 51 percent cited improved application or server resiliency, 46 percent cited space savings, another 46 percent cited security, while 34 percent sited energy savings.

The fact that retailers are outdoing banks in terms of virtualization adoption may have surprised Microsoft. "While banks are known as early adopters of technology, this survey indicates that more than one-third are still on the sidelines waiting for greater value and ease of use before adopting," says Rich Feldmann, managing director of the U.S. financial services group at Microsoft.

Microsoft, of course, is still working on its Windows hypervisor, called Hyper-V, which is slated to ship by the end of the summer.

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