A New Approach to Virtualization

Business has become a journey of continuous improvement. To remain competitive, each of these companies must constantly reinvent itself and find innovative ways to reduce costs, improve quality, manage risk and increase agility. But the same information technology that once enabled revolutionary advances now threatens to constrain them from taking business to the next level. Traditional approaches to IT no longer support the business vision or the business processes that will provide a competitive edge in the future.

So how do you become an adaptive enterprise — where business and IT are synchronized to capitalize on change? One of the cornerstones of the HP enterprise strategy is a new approach to virtualization.

Virtualized IT infrastructures achieve significant results in two seemingly incompatible areas - reducing costs and improving business agility. Many industries experience cycles of consolidation to find cost efficiencies and decentralization to improve service levels. Virtualization helps business achieve both objectives simultaneously, delivering solutions that are changing the economics of IT from desktop to datacenter. HP estimates that virtualization will enable enterprises to reduce desktop TCO by up to 50% over a 4-year lifecycle and to double datacenter utilization rates in three years.

How are returns like these possible? The answer begins with pooling and sharing IT resources.

Virtualization is an approach that Pools and shares IT resources so utilization is optimized and supply automatically meets demand. In traditional IT environments, systems are dedicated to a single application environment or business process. A virtualized infrastructure pools and shares the servers, storage, networking and other devices that form the infrastructure and allocates these resources to meet the changing demands of the business.

In most existing IT environments where people, process and technology are aligned around an application or business function — capacity is fixed, resources are over-provisioned to meet peak demand, systems are complex and difficult to change, and costs are based on owning and operating the entire infrastructure — even when underutilized. ERP, CRM, BI and web-based applications, for example, operate in isolated silos. By creating a virtualized infrastructure, people, process and technology are focused on service levels, capacity is allocated dynamically, resources are optimized, and the entire infrastructure is simplified and flexible. Virtualization also enables a utility or pay-per-use model for providing IT services.

You may be familiar with the term "virtualization" from the perspective of traditional IT where individual devices (servers, storage, networking) are optimized to meet demand within a single application environment or business process. HP has evolved the original concept — from Element Virtualization at the device level, to Integrated Virtualization at the application or IT process level, and beyond to a Complete IT Utility at the enterprise level — a model for providing real-time service. While the HP approach to virtualizing the enterprise is unique, virtualization solutions are built on industry-standard building blocks and supported by leading providers in the IT industry — companies like BEA, Microsoft and Oracle.

With a traditional approach to IT, order processing and supply chain systems operate in isolation. During most of each quarter, both systems are underutilized because they are designed to meet peak demand. By pooling and sharing IT resources between both processes, over-provisioning is unnecessary, operational costs are reduced, service levels improve and costs are based on demand.

Three factors are critical to the success of any virtualization initiative — people, process and technology.

As we've seen, technology is pooled and shared across business processes. Processes are standardized using best practices and then automated and reused. People are focused around services rather than applications. And they are motivated to deliver the highest service levels across a shared infrastructure.

HP takes a holistic approach to helping customers realize the benefits of virtualization and maximize those benefits by focusing on people and process as well as on technology solutions. HP customers realize the benefits of Virtualization by engaging HP and its partners in one of three ways — by purchasing technology solutions, through a services engagement, or on a "pay-per-use" basis as a real-time service.

Over two decades ago, a new business philosophy called just-in-time changed the manufacturing paradigm and triggered unprecedented growth in productivity. Companies that embraced this new approach by integrating each step in the manufacturing process and taking a new approach to inventory management gained a competitive advantage that lasted many years. Companies that resisted change paid an enormous price catching up with industry innovators. JIT was the technological and conceptual foundation for the Japanese advantage in the automotive industry throughout the 1980s, and it took American manufacturers nearly a decade to recover.

While just-in-time changed the way industry conceived of inventory management, virtualization is having a similar impact on how we think about and utilize information technology. Imagine that the servers, storage, networking and other devices that make up your infrastructure — your IT assets — are your inventory in the language of the manufacturing industry. By deploying your inventory just-in-time to meet the demands of applications and business processes, these IT assets are used far more effectively and efficiently. The business agility that results from this dynamic allocation of IT resources just may prove to be the competitive advantage of the next decade.