In late 2005, U.S. Food and Drug Administration (FDA) executives in the agency's Office of Information Management realized they were plagued by aging infrastructure and spiraling maintenance costs as they kicked off an effort to modernize IT service offerings. 

Like many organizations with a growing base of servers, they turned to virtualization, a process that uses software to partition a physical server into multiple virtual environments.

Older servers dedicated to a single application might use only 10 percent of total computing capacity. By virtualizing those machines and moving to fewer physical servers, organizations can realize savings in maintenance, energy and floor space. The method offers relief to fast-growing organizations that are running out of space and power in the data center.

"We got into virtualization originally for the cost avoidance on maintaining a sprawling fleet of aging servers," said the FDA's CIO, Timothy Stitely. Cutting back on the 800 Wintel servers also reduced the data center footprint as the FDA prepares to move to a new building in 2008.

"In January 2006, we identified 325 servers that could eventually be virtualized," he said. Two months later, with help from consultant Booz Allen Hamilton, the FDA used VMware software for a pilot project that migrated 28 physical servers to a virtual machine environment on a cluster of three physical servers.

The move eliminated the need for almost two full-sized racks in the data center. "We were able to cut maintenance costs $75,000 per year for the first 20 servers virtualized," Stitely said. The goal is to virtualize 400 of the FDA's 800 servers by the end of fiscal 2009.

Other benefits of virtualization include improved application stability and uptime. When they need to do hardware maintenance, network staff can do a "live migration" to another physical server. Then, they can finish the maintenance and migrate back to the original server. It eliminates downtime for users.

Joseph Klosky, the FDA's chief technology officer, said virtualization drastically reduced the time it takes to set up new servers. "Our virtual server team can create a server that is loaded with all our add-ons and patches on a disk image. Then, they can just pull the trigger to create a new instance of a server."

Moving Into the Mainstream
The FDA example is fairly typical of how organizations begin virtualizing, said Barb Goldworm, president of Boulder, Colo.-based Focus Consulting. They start looking at it as part of a consolidation strategy and are drawn by the total-cost-of-ownership benefits, said Goldworm, who is also the author of Blade Servers and Virtualization: Transforming Enterprise Computing While Cutting Costs.

Although virtualization has entered the mainstream, the transition process is still in the beginning stage. About 75 percent of large organizations have started down the path to some degree, Goldworm said, but only about 5 percent of those organizations' servers have been virtualized. She estimated that only 20 percent to 40 percent of government organizations have begun the process.

"But smaller groups like city governments, because they tend to be in a homogeneous environment that is not as complex, are able to achieve results more quickly than larger organizations," she said.

The virtualization market is hot. Research from IDC projects that the virtualization services market will grow to $11.7 billion in 2011 from $5.5 billion in 2006. So far, virtualization software has been dominated by Palo Alto, Calif.-based VMware, a subsidiary of EMC Corp. But both Microsoft, and Citrix Systems, with its recent purchase of virtualization software firm XenSource, are poised to challenge VMware in this developing market space.

Speeding up Provisioning
CIO Debbie Karcher said virtualization has brought multifold benefits to Miami-Dade County Public Schools. The Florida district, the fourth largest in the country with 367 schools and a $5.7 billion budget, began implementing VMware in conjunction with HP BladeSystem servers three years ago. The district now has 240 virtual servers in use, and it hasn't purchased new server hardware in a year.

The virtualization effort came just in time. Karcher's Office of Information Technology Services was running out of rack space in the computer room and faced limitations on air conditioning and electricity.

"The quiet savings of the virtualization process is that it has extended the life of our 30-year-old building," said Karcher.

The school district has retired more than 100 aging servers, which Craig Rinehart, administrative director of business and operational services, called "just the low-hanging fruit."

One key benefit, Rinehart explained, is the ability to establish new application servers much more quickly. When the district was buying physical servers, it could take up to six weeks between the user request and getting the application operating on the server. In the virtual environment, that can happen in half an hour. The school district eliminated a backlog of requests and now has greater flexibility when provisioning new applications.

The school district executives count $1.5 million in savings in hardware, maintenance and staff time. Those estimates don't include space, power and cooling savings, Karcher and Rinehart said.

But cost savings haven't persuaded some IT executives to move forward with virtualization. Some have decided not to pursue it because they don't think their staff has the skills to pull it off, said Steve Kaplan, president of AccessFlow, a virtualization consulting firm in Sacramento, Calif. Those fears are usually unfounded. "You do need to smart, competent people," Kaplan said, "but this is going to save your staff time."

Karcher and Rinehart said they feel lucky that they had a strong team with an interest in new technologies that could handle the transition to virtual servers.

But even if they had been forced to hire consultants to manage the transition, they would have gone ahead anyway. "This is such a big, good deal that even if you have to buy services to do it, you should still do it," Rinehart said.

Besides, he added, all organizations are running up against cooling and power limitations in their data centers. "If you are going to continue to grow, it can't be with all physical servers. Virtualization has to be part of the solution."

Still, there are obstacles.

Some software vendors are reluctant to support products in a virtual environment. When customers call with service problems, vendors might ask customers to load the software onto a physical server before addressing the problem.

If internal customers or vendors try to argue against virtualization, Karcher said her organization pushes back hard. She asks people to prove it won't work in a virtual environment.

The growing virtualization market may force software vendors to support it, yet Goldworm suggests CIOs check with their key software vendors about support and licensing policies about virtualization before proceeding.

Getting New Orleans Up and Running
Virtualization can also become an essential part of a disaster recovery plan. By separating the software from the physical box, IT groups aren't bound to a specific piece of hardware, explained Goldworm. "That makes disaster recovery much simpler to do," she said.

Virtualization helped the city government of New Orleans begin the city's ongoing recovery after Hurricane Katrina struck, said Anthony Jones, CIO of New Orleans.

Before Katrina, New Orleans had servers in 40 different locations, and the city was working on a consolidation plan. When several buildings were damaged in the flood, many city employees couldn't access servers, he explained.

"Our connectivity was underwater," Jones said.

Working with consultants from systems integrator Ciber Inc., the city quickly deployed 20 Dell Blade Servers and VMware software. "Using backups, we gathered data, created virtual servers and got departments back up and running," he said. "Without the virtualization, we could have done it eventually, but it would have taken a lot longer." New Orleans also set up an agreement with Austin, Texas, to replicate its critical servers as a redundancy measure.

Jones said virtualization is helping to change the way the city does business. "We were moving in this direction, and Katrina just escalated what needed to be done."

While consolidation is usually the motivating factor behind virtualization efforts, CIOs are finding many other benefits involving maintenance, disaster recovery and provisioning. Above all, they like the flexibility to respond more rapidly to internal customers' requests for new servers.

As Jones put it, "It's so much more convenient to easily scale up than by adding hardware. If there's a new application to support, we don't have to add another server. We can configure and deploy almost instantaneously, so we cut our implementation costs drastically."