Virtualization And Small Business Benefits - Dollars And Sense

Posted by Sean Kline on Thu, Dec 16, 2010 @ 02:27 PM

We have reviewed virtualization and small business benefits at a high level in Small Business IT Virtualization - A Path To Savings, Storage Virtualization Benefits for Small Business IT and Best Practices in Technology for Small Business in Uncertain Times.  Let's go down a level of abstraction and talk dollars and sense, so to speak.

If we agree that at the high level, virtualization carries a lot of benefit, one approach that may be helpful is to use a framework for justifying virtualization:

virtualization and small business benefits

 

The first category is to roll out the best practice of virtualization as part of a business initiative.  For example, Eastern Bearings decided to upgrade their wholesale distribution software system to the latest version and decided to virtualize as part of this to enhance performance.  A testimonial on the result is here:

http://www.turbotekcomputer.com/expertise/testimonials/

The second category is the more standard return on investment (ROI) categories.  What is interesting to is that these are relatively easy to quantify in the case of virtualization.  If you have only one server replacing four, you are clearly going to use 25% the power, cooling and space, for example.  For a typical small business with four physical servers, this translates to hundreds of dollars per month in savings.  By comparison, I used this exact framework for another technology initiative years ago (services-oriented architecture) and there were far more traditional ROI metrics that were more challenging to quantify.  Microsoft has an excellent Virtualization ROI calculator here:

https://roianalyst.alinean.com/msft/AutoLogin.do?d=307025591178580657

The third category includes strategic justifications like agility, flexibility, efficiency and reduced risk.  When deploying a new virtual server takes hours instead of weeks, small businesses will be able to respond more easily to new Information Technology requirements.  IT operations (whether internal or external) become more efficient because there are fewer physical servers to manage.  There is also reduced risk because recovering from a disaster becomes a question of restoring virtual files rather than a "bare metal" restore.

What are your business drivers?

Key Takeaways:

  • A useful framwork for justifying virtualization includes best practices, hard costs like power savings and more strategic drivers like reduced risk
  • There are varying levels of difficulty in assigning quantifiable metrics to each ROI driver
  • As compared to other IT initiatives, virtualization has a number of easily quantifiable ROI elements

 

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