Virtualization is a six-syllable (and very-high-Scrabble-value) word meaning “make the most of your IT hardware,” which is exactly what every small business wants to do. Until very recently, however, virtualization has primarily been a strategy for big organizations with large data centers, large IT budgets and -- especially -- the expert resources to implement it.

For smaller business owners and IT managers, virtualization now has great and growing promise. Leading software and hardware providers are gearing up to package virtualization in friendlier ways for smaller businesses. Most new servers and operating systems, and many applications now are designed to support virtualization, and the management tools to administer a virtual environment are improving dramatically.

Small businesses should take a close look at the attractive benefits of virtualization, which can include reduction of capital investments, substantial savings in IT operating costs, improved IT and employee efficiency, and the agility to redeploy assets quickly to accommodate business changes or disruptions.

Financial Benefits

These days, it is common to see even small businesses using more than 20 servers to power their operations, and with conventional servers and storage, small businesses suffer from the same, gross underutilization that large businesses do. Most servers today have a utilization rate of 20% to 30%, according to a report by Morgan Stanley, the New York-based financial analyst firm.

Virtualization allows the creation of multiple virtual servers that run on one physical server simultaneously. The virtual machines, which support applications, share hardware resources but operate independently. This lets businesses operate on fewer physical servers, and that in turn reduces power and cooling requirements. A typical physical server draws 500 watts to 600 watts of power and consumes roughly 5,000 kilowatt-hours of energy per year if it's run continuously. Eliminating just one server, therefore, can save hundreds of dollars per year in energy alone.

Virtualization also helps the entire system run more smoothly and as a unit. If one virtual machine fails, another can take over almost instantly and perform the same tasks. Through virtualization, servers and applications become easier to manage and maintain. Applications and storage can be moved easily from server to server with little or no downtime as the needs of the business change.