Enterprise server virtualization market booming, reports IDC

More than $19 billion forecasted to be spent by 2014 on server hardware in support of virtual machine applications.

FRAMINGHAM, Mass. -- Based on broad customer acceptance and confidence in the role of virtualization in the data center, International Data Corporation (IDC) forecasts that more than 23% of all servers shipped in 2014 will be actively supporting virtual machine technology. In addition, more than 70% of all server workloads installed on new shipments in 2014 will reside in a virtual machine, reports the technology analysis firm.

According to IDC, more than $19 billion will be spent on server hardware in support of these applications, with shipments of virtualized servers growing at a compound annual growth rate (CAGR) of 14% -- more than twice the rate of the overall server market from 2009 to 2014. IDC expects that this robust growth in server virtualization will continue through 2014 as data center adoption is increasingly considered mainstream in mature economies and as organizations in emerging regions look for data center efficiencies while they rapidly increase their server investments over the period.

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Based on a survey of more than 400 IT organizations currently deploying server virtualization, IDC found that customers are looking to not only increase the penetration of virtual servers within their environment, but also to increase the number of virtual machines per physical server. The forecasted $19 billion dollars translates into 36% of all spending for server hardware in 2014 and the 23% of all server shipments will represent 2.2 million physical server hosts. IDC estimates that these 2.2 million physical servers will in reality become as many as 18.4 million logical servers with customers deploying an average of 8.5 virtual machines per physical host by 2014.

"Server virtualization is the 'killer app' for the data center and has forever changed IT operations. Most data centers have had a 'virtual first' approach to server deployment for the last three years and this has meant that the majority of application instances now reside inside a virtual machine. IDC expects that 2010 will be the first year when more than half of all installed application instances will run inside a virtual machine. This has profound implications for not just maintenance and management of the data center but also adjacent infrastructure such as storage and networking," says Michelle Bailey, research vice president, Enterprise Platforms and Datacenter Trends at IDC.

Bailey adds, "As the needs of the enterprise begin to turn to management constraints, large virtualization customers will have to begin to more seriously consider investments in automation tools and converged hardware as a means to lower time to deployment and simplify an increasingly complex data center infrastructure."

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"IDC believes that as virtualization evolves, it will grow beyond the data center and mature markets to penetrate into branch offices and emerging regions. This process has already begun as the survey results already show increasing adoption in environments beyond the data center," concludes Katherine Broderick, senior research analyst, Enterprise Platforms and Datacenter Trends.

The forthcoming IDC multi-client study, Server Virtualization Market Forecast and Analysis, 2009-2014, utilizes in-depth executive interviews with 10 IT directors in the U.S. to provide qualitative data which is supplemented with 400 quantitative surveys with U.S. and regional based IT directors. Interviews identify virtualization technologies by platform, price band, architecture, server vendor, size of company, and industry. These findings are used to create a detailed forecast of the virtualization market by host operating system, guest operating system, server class, socket capability, customer revenue, shipments, logical units, workload category and CPU type.

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