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Server Virtualization Reinvents the Datacenter

According to the latest study by IDC, 16.5 percent of all new servers shipped in the second quarter of 2009 (2Q09) were virtualized -- an increase from 14.5 percent in 2Q08.

However, actual shipments decreased 21.0 percent year over year to 246,000 physical servers in 2Q09 as customers continue to limit spending on new server hardware relative to last year.

Similarly, worldwide virtualization software revenue declined 18.7 percent year over year in 2Q09 to $344 million. Virtualization licenses did grow quarter over quarter in 2Q09. The server virtualization market continues to shift towards the use of paid hypervisors, with paid virtualization software now running on 60.8 percent of all new server hardware shipments virtualized in 2Q09, an increase over 57.2 percent in 2Q08.

Does this also mean that more enterprise CIOs are out-tasking applications to managed cloud service providers? It's unclear at this time. But, the accelerated move to virtual servers is a significant IT infrastructure trend.

"In the second quarter, IDC observed a number of signs indicating that stability is beginning to take hold in the worldwide server market," said Matt Eastwood, group vice president of Enterprise Platforms at IDC. "The worldwide server installed base has aged significantly and virtual machine densities on these systems have increased sharply over the past year."

As a result, the market is poised for the beginning of a significant infrastructure refresh cycle in the months ahead. IDC believes that virtualization will be a cornerstone technology as medium and large enterprise organizations around the globe accelerate the need for more dynamic and converged infrastructure designed to support the business needs of the next economic cycle.

"Server virtualization has forever changed how customers manage their datacenters," said Michelle Bailey, research vice president of Datacenter Trends at IDC. "Virtualization First is now the default approach for new server deployments at most enterprise IT organizations and is quickly becoming the foundational platform for cloud computing initiatives among service providers."

Additionally, growth in emerging regions is accelerating as the economic downturn limits the ability of organizations to raise capital. The next phase in virtualization will require a reinvention of IT policies and procedures and continued adoption of automation tools will be key as virtual machine densities rise and IT managers find themselves facing virtual server sprawl issues.

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