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VIRTUALIZATION:The Next Real Thing

With Microsoft’s Hyper-Vhitting the market, there’shuge opportunity for partners familiar with several vendors’ virtualization offerings.Most likely to succeed:those able to harness thehype while meeting real customer needs. By Fred Bayles

RedmondChannelPartner

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A LT E R N AT I V E T H I N K I N G A BOU T V I R T UA L I Z AT I O N :

Easier Done Than Said.Alternative thinking is making it easier than ever before to get your serversworking harder than ever before.

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It’s the ease of using the same tried-and-true tool, HP Insight Control,to proactively manage both your virtual and physical servers from thesame console (deep sigh of relief).

It’s HP ProLiant working in partnership with Microsoft® to provcompatibility across the board for years to come. (Collaboration with a capital “C.”)

©2008 Hewlett-Packard Development Company, L.P. Microsoft is a U.S. registered trademark of Microsoft Corporation.

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The work added to the CertifiedPartner’s knowledge and supplementedits skills as a Citrix Gold Solution Advisor,already schooled in XenSource virtualiza-tion technology. All these random connec-tions have come together for Moose Logicas virtualization has grown throughoutthe IT industry. The firm’s revenues fromsales and services have more than exceed-ed expectations for the year, with one-third of all business being related to virtu-alization projects. Old customers areeager to update their aging servers withthe new technology. New customers areknocking on the door.

So, as it turned out, the Next BigThing wound up finding Moose Logic.

“We found ourselves in a pretty fortu-nate position of being in the right place atthe right time,” says Sid Herron, MooseLogic’s sales director, who likens the 13-employee company’s experience to thetitle character in the animated film“WALL·E” holding on for dear life as arocket zooms off into space.

“Sometimes it’s better to be luckythan good,” he jokes.

‘RIGHT ON THE CUSP’Virtualization looks to be a dizzying ridefor many Microsoft partners, especiallythose with connections to Citrix Systems

Inc. and VMware, the other leaders in thefield. The recent introduction ofMicrosoft’s Hyper-V, which is compatiblewith Citrix and VMware technology,offers companies the ability to convertservers, desktops and other network sys-tems to virtual configurations at a muchlower cost.

It’s an obvious choice for companiesupgrading server systems. It’s a low-costoption to building mandated disaster-recovery systems. And it offers the dualbenefits of cost savings and green creden-tials that come from shrinking the numberof electricity-hungry server farms.

Zane Adam, senior director ofMicrosoft’s virtualization business, citesindustry numbers forecasting that thesector will be worth $11.7 billion by 2011.

“This is one of the fastest adoptionsto take place,” Adam says. “The last yearand a half, it has been taking off. Adoptionis going to explode.”

Adam attributes the seismic predic-tions in part to Microsoft’s new products,which have brought the prices of virtual-ization conversions down by the power of10 in some cases. While large enterpriseshave been moving into virtualization forsome time, midsize and smaller compa-nies are fast becoming aware of the sav-ings of virtualization, especially now

that Hyper-V has brought costs withintheir range.

Adding to such optimism is the simple fact that Microsoft’s virtualizationproducts are built on Windows and othertechnologies that are already familiar to customers.

“Microsoft is bringing a completesolution, which costs less and is easy todeploy,” Adam says. “It’s going to drive theadoption curve.”

Rand Morimoto, founder and president of network consulting companyConvergent Computing, an Oakland,Calif.-based Gold Certified Partner, hasexperienced that acceleration.

“Virtually everything we do toucheson virtualization now,” he says, citing asexamples server upgrades, redesigns andreplacements that usually involve someform of virtualization strategy. “The hard-ware you buy today is so powerful you’reonly using 5 percent of its capability. Withvirtualization, the additional capacity ona system lets me put it on one single box.”

Morimoto also attributes the tippingpoint for virtualization to a shift in ven-dors’ attitudes. Previously, “you had todeal with old-school thinking. A lot of ven-dors were only going to support their prod-uct on a single piece of hardware,” he says.“It was a change of culture for IT profes-sionals. They were used to fixing things byturning off the power switch. You can’t dothat with virtualization. The power switchis so powerful now; there are seven othersystems that are working on that server.”

Now, as virtualization has becomemore common with solid confirmations ofproofs of concept, vendors are more will-ing to support their products on virtualplatforms, according to Morimoto andothers.

RCPmag.com SEPTEMBER 2008 Redmond Channel Partner 1

W hile looking for the Next BigThing a few years ago, MooseLogic, a Bothell, Wash.-basedfirm specializing in managing

servers for smaller companies, found itself working ona project that involved virtual technology fromVMware Inc.

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“We’re starting to see more tractionin appliances being converted to virtualmachines,” says Eric Perkins, the founderand chief technology officer ofPerformance Network Solutions Inc., aChicago-based IT solutions and servicesprovider that is a Gold Certified Partnerand a Citrix Gold Solution Provider.

“More appliances are based less andless on the physical and more on the virtu-al,” Perkins says. “It’s right on the cusp oftaking hold.”

BUILDING RELATIONSHIPSMicrosoft officials and partners are farfrom alone in their excitement about thepromise of Hyper-V and other Microsoftvirtualization products. Citrix andVMware both view Microsoft’s entranceinto the sector as an opportunity tobroaden the market for their products.

“Xen will continue to work withMicrosoft platforms, adding to our port-folio and allow us to deliver to a spacethat’s been hot in the last two or threeyears,” says Al Monserrat, Citrix’s seniorvice president of sales and services.“That’s the market that’s seeing our highest growth.”

Dual partners, such as Perkins ofPerformance Network Solutions, areequally excited about the possibilities.“We’ve been very successful in the virtual-

ization of Microsoft Exchange,” he says.“Microsoft products are the core network-ing products on Citrix systems.”

And although Microsoft’s new prod-ucts might be seen as a challenge toVMware, the market leader in virtualiza-tion technology, Steve Houck, vice presi-dent of VMware’s worldwide channels,

sounds as excited as a Microsoft partnerabout the possibilities. “[Microsoft]Exchange and SharePoint are the topapplications in the VMware customerenvironment,” he says. “We like that story.We’re not going to disrupt it.”

No doubt. Houck says that the num-ber of VMware partnerships has grown

V I R T U A L I Z A T I O N T H E N E X T R E A L T H I N G

“More appliances are based less and less on the physi-cal and more on the virtual. [Virtualization is] righton the cusp of taking hold.” Eric Perkins, Founder and CTO, Performance Network Solutions Inc.

2 Redmond Channel Partner SEPTEMBER 2008 RCPmag.com

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from 6,000 to 14, 000 partners in the last18 months. About 73 percent are alsomembers of the Microsoft PartnerProgram and half are Citrix partners.

Houck says VMware teaches its part-ners how they can virtualize upgrades onMicrosoft server products. This symbio-sis allows the partners to sell moreMicrosoft products along with fastermanaged services.

“The net gain is much larger than ifthey didn’t have a multipartner situation,”Houck says. “Partners light up when theyrealize VMware allows them to acceleratetheir Microsoft practices.”

There is another advantage to thesemultipartner deals: a double-dipping ofincentives and bonuses to partners whosework incorporates products fromMicrosoft, Citrix and VMware as well asfrom other vendors.

Citrix recently announced a rewardsprogram to pay channel partners for sell-ing XenServer software embedded inservers from original equipment manufac-turers. Citrix partners, many of whom alsohave Microsoft relationships, receivestrong incentives for designing and deliv-ering solutions based on Citrix applicationdelivery products.

Often, those partners are eligible forbonuses and rewards from Microsoft andVMware as well. Houck says his compa-ny’s incentives to partners that sell licensesand service agreements are often matched

by other vendors whose products are partof the new installation.

“In the case of an upgrade includingsecurity functions, you’re going to get mar-keting incentives from VMware for licens-ing the deal and additional incentivesfrom McAfee and Netout because it’s a vir-tualized deployment,” he says.

Still, some wonder whether this coop-eration within the virtualization sector canhave multiple winners. Herron, of MooseLogic, says the simplicity and lower costs ofvirtualization through Microsoft’s prod-ucts and Microsoft/Citrix partnerships willhave a less-than-positive impact onVMware’s bottom line in the coming years.

“The Citrix and Microsoft partner-ship is deliberately working to make thisa two-horse race, not a three-horse race,”he says.

EDUCATING THE CUSTOMERNo matter which virtualization partner-ship you choose, selling the concept of vir-tualization can be more complicated thanselling the actual product. Citrix’sMonserrat attributes virtualization’s suc-cess to the teaching skills of his company’spartners.

“It’s up to them to deliver that education,” he says. “The rapid growthof virtualization in the server market has to do with how well the channel partner educates and is trusted by thecustomer.”

For many partners, that educationprocess begins at home. Morimoto says hisstaff has been trained not only to think interms of virtualization, but how to sell it aswell. The result has been many more busi-ness opportunities, especially from newcustomers attracted by ConvergentComputing’s expertise.

“It has allowed us to work with com-panies that have never thought of virtual-ization before and who may not have cho-sen to call us,” he says.

That, too, offers additional opportu-nities to the partner community. Houcksays VMware did an analysis a few yearsago on the “drag,” or ancillary business,created for partners selling virtualizationof storage systems. “We found it was six toeight times the revenue of what was creat-ed from just the storage work,” he says.

NEW DRIVERSServer and storage system makeovershave been responsible for much of thegrowth in the virtualization sector. Morerecently, sales are being driven by the pushfor disaster-recovery systems and interestin green initiatives designed to save bothmoney and the environment.

“If you handle consumer data, you need to have a disaster-recovery plan in place,” says Houck. “The demandfor disaster recovery, combined withrequirements for government compli-ance, explains the phenomenal growth in

“Microsoft Exchange andSharePoint are the top

applications in the VMware customer environment. We like

that story. We’re not going to disrupt it.”

Steve Houck, Vice President, Worldwide Channels, VMware Inc.

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virtualization.”Virtualization solutions for disaster

recovery have ancillary benefits.Morimoto tells of a customer interested ina system that was initially priced at$275,000. The hefty cost put the customeroff the project until ConvergentComputing came back with a plan to virtu-alize the customer’s entire system. Theprice tag on the new proposal, includingthe disaster-recovery functionality, was$60,000.

“We had to have them rethink thewhole model,” Morimoto recalls of thecustomer’s response. “It was a stretch forthem, but when they realized they coulddo virtualization with disaster recoveryfor less money, it was a deal.”

Potential energy savings are anotherfactor driving customers to virtualization.Shrinking five servers down to onethrough virtualization can save more than $20,000 a year in energy costs.

“Power conservation is becomingmore of an issue,” says Microsoft’s Adam.

“Utilities offer rebates with virtualization,which is important to larger customerslooking to consolidate hundreds ofservers.”

That motivation for green initiatives,both financial and altruistic, is filteringdown to smaller customers. “When we dida workshop on virtualization in SanFrancisco, a quarter of the people werethere to get green IT,” says Morimoto.“They would never have come to thoseseminars before.”

Most in the industry agree that thenext big wave will come as companies gettheir arms around the concept of desktopvirtualization. Once understood, theadvantages are significant: reduced costsfrom eliminating the necessity to installthe same programs on each machine;increased potential for the mobility towork from anywhere.

Monserrat compares this new oppor-tunity to Citrix’s experience in server vir-tualization.

“The first two to three years, it was avery slow ramp-up as proofs of conceptwere developed,” he says. “It’s very similarto the desktop virtualization over the lastyear to 18 months. We’re starting to see alot of proof of concept and pilot programs.The channel partners play a key role in thiseducation process.”

Experts say that desktop virtualiza-tion can be a trickier sell for the simple rea-son that many more end users are aware ofthechange. “With server virtualization, as a user, I can’t tell you if it’s virtual. Desktop

virtualization touches people more directlyand there’s going to be more scrutinizing,”saysMonserrat.

CHALLENGES REMAINStill, the experts warn against rushing tooexuberantly to embrace virtualization.Among the important ingredients for suc-cess: understanding that virtualizationsolutions require a good deal of thoughtand design—and a big-picture approach.

“The solution is not just with the serv-er,” Adam says. “You need to bring a com-plete solution for the whole system.”

Morimoto says experience has taughthis company to go slow and steady by look-ing at a client’s entire IT architecture.“Virtualization can have a profoundimpact on your entire operation, from thedata center to the desktop,” he says. “Webelieve it should be embraced as part of anenterprise-wide infrastructure strategy.”

To help partners achieve that end,Citrix and VMware have establisheddemanding certification programs. Citrixrequires training for sales as well as tech-nical staff. VMware boasts the widestrange of three-day certification coursesfor specific virtualization solutions. “Itgets partner organizations to the pointwhere they can build out a virtualizationprocess,” Houck says.

Meanwhile, Microsoft provides web-casts on virtualization best practices andhas announced its certification process forthe technology. Adam says partners seemincreasingly eager to obtain that knowl-edge and move into the marketplace withit: “The conversation is going from ‘I knowwhat [virtualization] is’ to ‘Teach me howto use this in the customer environment,’”he says.

Fred Bayles (fbayles329@aol.com) writesfrequently about business topics. He’s aBoston University journalism professorand a former national writer for The Associated Press and USA Today.

No matter which virtualizationpartnership you choose, sellingthe concept of virtualization canbe more complicated than sellingthe actual product.

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