Virtualisation can reduce costs and improve efficiencies of existing servers and other applications. However, some IT departments are implementing virtualisation solutions and not realising the Return on Investment (ROI) they anticipated. They are also finding management more complex than they originally envisioned. Andrew McCreath, engagement partner at GlassHouse Technologies UK, discusses the problems IT departments may face and how they can optimise the ROI from their virtualisation investment

Many businesses have seen virtualisation as the solution to all their IT infrastructure worries. However, they often become disillusioned when hit by high initial and ongoing operational costs and depreciating technology that runs in five year cycles.
Back when virtualisation first appeared, many organisations saw the immediate benefit of running multiple systems on one piece of hardware, recalling the mainframe days but at a fraction of the cost.  Virtualisation seemed to make everyone’s lives easier and less complicated. A variety of applications such as FTP, IIS, Active Directory and many others are seen as ‘low hanging fruit’ for virtualisation candidates.
Organisations looked at specific applications and thought they would be easy to virtualise. In fact, it was so easy, companies jumped on the bandwagon and began to see benefits in virtualising servers and applications; but it only returned cost avoidance for that year.  Now, many IT departments may not be getting value for money from virtualisation and some  are questioning whether managing virtual servers is less costly than physical servers?

Hidden costs in virtualisation
Applications and servers need proper management, whether they are virtual or physical.  This includes a variety of components such as OS patching, application updates, backup, restore, archive, storage expansion, memory expansion, CPU expansion and issues around fire-fighting.  These tasks require people, time and money, regardless of their virtualisation status, which impacts on the ROI.
It is hard to accurately measure ROI.  Manpower, time and money need to be measured upfront and planned for, not only as an improvement in service but as a cost returned to the business. Also, expectations for virtualisation need to be realistic. Projects must account for every aspect of IT infrastructure including all the costs incurred and time needed for completion to effectively deliver the predicted ROI. This can be most clearly seen and measured if businesses follow a clear IT Service Management model. Fewer companies will continue to spend money in IT, unless they can sufficiently prove that it will not just improve or maintain service, but actually deliver value and cost savings back to the business.

Unlock ROI
ROI is all about getting your money’s worth and perhaps more importantly, helping justify future investments.  It is important to ensure assets are fully utilised and the virtualisation strategy is working for the business. Businesses can unlock the ROI of virtualisation through effective planning, baseline analytics and measurement.
Planning for cost saving and ROI is often overlooked at the early stages of any project. Organisations are typically unaware of the potential of a new technology and lack clarity on how it will meet business objectives.  Initial planning will find out exactly what the technology can deliver and aid in setting expectations. 
Baseline analysts must consider a number of questions: Where are we as an organisation? What are the true service costs? Are these tangible and measured today? How are these reported and managed?  Bringing this information together pre-virtualisation will enable organisations to measure the success of the overall project, and how they fair on the ongoing service level management the business requires. Once virtualisation has been deployed, systems must be in place to monitor and improve on it.
Measurement exercises in any virtualisation project will reveal pertinent mathematics on how servers have been managed, expanded, enhanced and developed over past years. With technology leaping far ahead of many application capabilities, many asset life-expectancies have been extended from three to five or more years.  Server hardware has also become highly affordable over recent years, making it possible for application owners to obtain further assets and develop systems at justifiable costs to business owners.
Some suggest that if data centre space was more abundant and the cost of electricity more palatable then virtualisation may not have taken off for another few years and for these reason, it has. In addition to these factors, the recession will certainly see businesses looking for cost-cutting initiatives. Virtualisation technologies do allow businesses to release assets from their data centres and consolidate applications that under-utilise the resource capabilities of modern day servers. But businesses need to adopt proper planning, analysis and measurement before and during implementation to guarantee the full potential ROI that virtualisation offers.