Tech trends and business ideas

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Friday, July 27, 2007

Virtual gets real

Not just being expensive and complex, Data centers have become unmanageable. Blade servers, created to allow more muscle to be packed into existing racks, will not meet demand on their own, because of their power requirements. Typical data centers provide around 2kW of power and cooling capabilities per rack. However, a rack full of new blade servers requires up to 15kW of power. In some data centers, the only answer is to space the blades throughout the building, which is easy to do when there are few blades installed. In power starved countries like India, where land price/rentals are also shooting through the roof, there’s an urgent need for an alternative.

Here’s a market problem and needs quick alternative solutions – enter Virtualization.

Virtualization software, among several uses, can make one computer function as if it were several. As a result, corporations are getting one file server to do the work of about five, on average, which cuts capital, labor and real estate costs at data centers. The energy savings alone can pay for the cost of the program in a year. Makers of virtualization programs lock in annual revenue on top of one-time license fees by selling maintenance and support contracts to almost all business customers. As for other software businesses, every $1 billion in licenses generates a highly profitable contracted revenue stream of about $200 million for maintenance. By 2012, maintenance revenue could exceed license revenue.

The biggest virtualization market, however, may be in consulting and management services. IDC estimates that the virtualization services market will grow to $11.7 billion in 2011 from $5.5 billion last year, as the technology becomes much more mainstream.

Do you know any Indian company specializing in virtualization field?

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