Government Virtualization Could Save More Than $30 Billion By 2015

Desktop Virtualization, Server Virtualization — By on Monday, January 30th, 2012

Desktop Virtualization Provides Untapped Opportunity for Additional Savings, but Just 7 Percent of Agencies Plan on Taking Full Advantage

Virtualization savings are real – and are expected to grow – but government agencies need to overcome funding uncertainties and other significant barriers to achieve their virtualization goals, according to a study by MeriTalk underwritten by Microsoft and NetApp. The new report, “Virtualization Vacuum: The 2012 Government Virtualization Study,” explores the current and future state of play in government server and desktop virtualization initiatives, including key differences between Federal and state/local markets.

The survey of government IT decision makers indicates that virtualization initiatives are picking up momentum. Eighty-two percent of Federal and 77 percent of state-and-local IT professionals say their agencies have already implemented some server virtualization, leading to an estimated savings of 19 percent of their IT budgets – $15 billion across government. By 2015, virtualized workloads are expected to nearly double from 37 to 63 percent – which would boost the savings to an estimated $23.6 billion government-wide.

According to the report, 57 percent of Federal and 64 percent of state-and-local respondents say server virtualization takes priority over desktop virtualization. While government agencies have plans to implement some form of desktop virtualization, less than one in 10 plan to virtualize all applications for all users. However, if desktop virtualization provides just half of the savings of server virtualization, agencies could save 9.5 percent of their IT budget or $7.5 billion.

“When agencies do begin developing their virtualization plans, they should look beyond servers and consider desktop virtualization as well,” said Mark Weber, President, U.S. Public Sector, NetApp. “The more opportunities that agencies are able to recognize and incorporate into their modernization frameworks, the greater their long-term benefits.”

Despite the proven results and clear savings opportunity, only 48 percent of Federal and 39 percent of state-and-local respondents believe that they have the funding needed to meet their server virtualization goals, and that’s not the only barrier. The most common challenge that agencies face for both server and desktop virtualization is legacy application migration. Security is also a hold-up, but more so for Federal agencies than for state/local – 41 percent of Feds cited security concerns, as opposed to 24 percent of state-and-local respondents. Only 63 percent of respondents say their management fully supports server virtualization adoption. Fewer than half report that their agency has a formal policy or common framework for server virtualization.

“Virtualization and consolidation are critical components of an effective cloud strategy, resulting in tangible benefits,” said Susie Adams, Microsoft Federal’s Chief Technology Officer. “If agencies are thinking vigorously and broadly about combining server consolidation, data center consolidation, and private cloud infrastructures, the industry can realize tremendous leaps in scalability, cost savings, improved services, and integrated management. In many ways this begins with a smart approach to virtualization.”

The report also reveals that while virtualization yields big savings, good things come to those who wait. Fifty-seven percent of participants say they expect to wait one year or more to realize savings once a server virtualization solution is fully implemented and operational.

“Virtualization Vacuum: The 2012 Government Virtualization Study” is based on an online survey of 302 government agency CIOs, CTOs, IT directors/supervisors, IT managers, and data center managers conducted in October 2011.

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