Organizations today face challenges that require a new approach to how IT is conceived and implemented. They need a dynamic infrastructure that reduces costs and generates more business value while managing risk to the company’s information. Virtualization and cloud computing form an important part of this, unchaining logical resources from physical elements and redelivering them in a fluid fashion – whenever and wherever the organization requires them.

1. Consolidate and Optimize your IT Infrastructure
Organizations today face challenges that require a new approach to how IT is conceived and implemented.
They need a dynamic infrastructure that reduces costs and generates more business value while managing risk
to the company’s information. Virtualization and cloud computing form an important part of this, unchaining
logical resources from physical elements and redelivering them in a fluid fashion – whenever and wherever the
organization requires them. Many high-value business benefits follow: higher hardware utilization, higher
uptime, lower energy costs, and faster IT response to business units.
The initial benefits of virtualization – especially cost reduction due to physical consolidation efforts – are
generally regarded as the one time benefits of an enterprise-wide virtualization effort, justified by a
significant reduction in capital expenditures (CapEx). Reducing the number of physical servers by
consolidating virtual servers results in more efficient and higher performing IT environments.
Besides virtualization and cloud computing help in making IT infrastructure more environmentally friendly.
Both run on the concept of on-demand scalability. Infrastructure scaling is available at your fingertips, on-
demand. Increased computing power is available with increased load. After the high-traffic season the extra
resources are released back. This brings about a drastic reduction in carbon overheads associated with idle,
power hungry server farms running all year round.
IT INFRASTRUCTURE CONSOLIDATION – RECENT TRENDS
Each year the addition of new applications and increases in processing power, networking and storage
continue to accelerate. Demands on IT managers to provide reliable infrastructure continue to grow further.
At the same time, regulatory compliance demands more and better data protection, and globalization has
made readily available data an indispensable competitive tool.
IT budgets haven’t kept up with increasing application or storage needs. Fewer resources have to support
these growing demands – compounded with limited data center resources such as floor space, cooling and
power and the challenges can seem insurmountable. Fortunately, advances in technology, including
virtualization and the more recent cloud computing, are helping address these issues.
Companies of all sizes are employing virtualization technology as a way to reduce costs and improve services
to deliver a more dynamic infrastructure. A scalable virtualization environment is important for more reasons
than just near-term benefits to business operations and the bottom line. The IT services industry is moving
toward new service delivery models including cloud computing. More and more organizations are pulling back
servers and applications from remote branches to centrally house them in datacenters.
THE MAIN DRIVERS FOR CONSOLIDATION
The reasons to consolidate IT infrastructure are wide-ranging. Some of the key drivers are mentioned below:
SIMPLIFY IT MANAGEMENT
As server sprawl increases, IT organizations are forced to spend more time on basic administrative tasks
supporting, maintaining, and troubleshooting distributed resources. This inhibits IT’s ability to work on more
proactive, strategic projects to improve infrastructure and service levels, deploy new applications, and align
more closely with the business. With fewer locations to support, and servers to backup and manage,
consolidation leads to an increase in productivity for IT operations. It also allows for the best use of the
available staff resources. Accordingly, fewer people are needed to manage centrally-controlled servers —
resulting in lower operational expenses (OPEX) and improved staff productivity.
COST REDUCTION
With consolidation, IT organizations can reduce the number of a company’s physical servers and related
infrastructure overhead, resulting in a dramatic reduction in physical infrastructure costs. The cost of
purchasing hardware as well as software licensing for servers previously located in remote sites is eliminated.
In addition, organizations realize other cost savings in terms of floor space, power consumption, cooling, and
maintenance.
DATA PROTECTION AND SECURITY
Consolidation addresses many of the issues surrounding data protection and archiving. Data consolidation
eliminates the need for backup infrastructure in remote sites and minimizes the number of people who have

2. physical access to IT assets. As a result, companies can reduce the risk of data breaches and exposure to
enhance their overall security posture.
CONSOLIDATION AND SERVER VIRTUALIZATION
Along with the IT consolidation trend, server virtualization has risen to the forefront of initiatives because of
the multiple benefits it offers to IT in the form of:
•Additional cost and power savings by eliminating server hardware
•Increased resource utilization
•Consistent test and production environments
•Hardware independence through the virtual abstraction layer
•Improved release times for new services
•Enhanced disaster recovery capability
Virtualization offers extensive opportunities for IT managers to fundamentally transform the operations in
their datacenters. Traditionally, servers at data centers operate at 10 to 20 percent of CPU capacity and are
dedicated for a specific workload to minimize incompatibilities and resource conflicts. Server virtualization
technology allows a single physical server to be partitioned into several isolated virtual containers for running
multiple applications at the same time. By leveraging many virtual servers, organizations can drive up server
CPU resource utilization to eliminate idle capacity. This allows system administrators to consolidate greater
workloads onto fewer servers, and provide substantial savings in space, power, and cooling. Apart from
consolidating servers, virtualization also provides a solution to contain future server growth by deferring the
need to purchase new physical servers.
Server virtualization is especially useful when deploying new IT services and applications. By creating a
consistent replica of development and production environments, IT organizations can complete testing of
applications faster and speed up the release times of new services. In fact, the deployment of new servers is
also reduced dramatically by virtualizing the environment. This enables IT organizations to respond more

3. rapidly to business demands for new applications and computing resources. In addition, the ability to snapshot
servers, redeploy virtual machine images, along with hardware platform independence combines to deliver
enhanced disaster recovery capabilities. In terms of DR, virtual machines can be recovered more rapidly than
traditional physical server builds, further reducing downtime and associated costs to create a more resilient
data infrastructure in the face of outages or failure events.
Over a period of time, server virtualization and consolidation have evolved to a point where they have
become almost synonymous with each other. Together, they simplify data centers while reducing costs and
administrative overheads.
BENEFITS OF SERVER VIRTUALIZATION
Physical Machine Virtual Machine
Difficult to move or copy Easy to move and copy, provision applications
Independent of physical hardware, isolated from
Bound to a specific set of hardware other virtual machines running on the same physical
hardware
Often has a short lifecycle Longer lifecycle, reduction in server costs
Difficult to manage remotely Increased mobility, encapsulates data into files
Requires hands-on upgrading of hardware Insulated from physical hardware changes
Consumes significant resources Reduction in energy and cooling costs
Management challenges Easy to manage, improved availability of applications
Virtual server infrastructures offer powerful features for deploying and managing hundreds or thousands of
virtual machines easily and efficiently.
Strategically, server virtualization is an IT modernization catalyst that will change the way IT is acquired,
consumed, managed, sourced and paid for. Virtualization will change the way businesses innovate and grow.
If done well, server virtualization makes fundamental changes that can lead organizations on the path of
private and public cloud computing. Though, server virtualization is not the only path to cloud computing,
cloud services will be offered at many levels of IT stack including applications (SaaS) and application
infrastructure service (PaaS).
Virtualization technology and private cloud computing models are helping organizations transform and deploy
infrastructure solutions that simultaneously meet cost, service quality, and agility requirements. The
evolution of virtualization into a private cloud solution also leads to significant improvements in agility and
scalability.
VIRTUALIZATION DRIVES MULTIPLE BENEFITS THAT VARY WITH THE STAGE OF ADOPTION

4. As shown in the figure above, IT organizations typically begin in the IT Production phase by virtualizing servers
in domains controlled by IT to achieve significant capital and operating expense cost efficiencies. Then they
expand their use of virtualization in the Business Production phase to include business application domains –
improving critical-business-system uptime and service levels – and they put more systems under the domain of
disaster recovery. Finally, as organizations deploy private cloud solutions that pool computing resources into a
shared and agile infrastructure, they can deploy an IT-as-a-service model that allows IT to quickly respond to
emerging business opportunities.
THE MOVE TOWARDS CLOUD COMPUTING
The cloud concept takes virtualization a step further by enabling users of IT resources to avoid investing in
dedicated infrastructure. IT costs become a variable operational expense for business users because capacity
is shared. Adopting this mode allows capacity to scale up and down dynamically and immediately in a manner
that advances how virtualization is used today. The cloud model is designed to let companies use IT resources
as a service, taking advantage of shared applications, processing and storage managed within the cloud –
either inside a private cloud at an internal data center, or in an external cloud at a service provider.
Today Tomorrow
Server virtualization is the major trend Cloud computing is the major trend
Virtualization initially driven by hardware
Driven by desire to benefit from IT resources
consolidation and the resulting savings in CAPEX,
provisioned as a service
power, space
Business agility, disaster recovery and business Pay-as-you-go, ‘utility computing’ models allow
continuity became additional drivers business users to avoid fixed costs
Virtualization solutions are established; cloud Highly elastic, instant access to computing resources
computing solutions are emerging and IT services
Overall, the requirement for IT expertise is still
Virtualization and cloud solutions become mature
significant for virtualization and internal clouds
Management and monitoring capabilities are still
developing Simpler deployment, use will make benefits broadly
- Ongoing IT administration is required achievable
- Policy making is not automated
Management and monitoring come of age to reduce
Vendors have not implemented virtualization and requirements for specialized IT expertise
cloud computing standards - Self-management
- Automated policy-making
Security, privacy and compliance issues still to be Virtualization and cloud standards will increase ease
addressed for sensitive applications/services of deployment, reduce risk
Most external cloud service level uptime agreements Appropriate best practices for security, privacy and
(SLAs) are below mission-critical levels compliance will develop
Enterprise users of utility computing will expect
resilient cloud infrastructure and specify uptime as
high as 99.999% for mission-critical applications and
services
There are three common types of clouds: private, public, and hybrid. A private cloud is based upon a pool of
shared resources (whether mainframe, distributed, or virtualized), whose access is limited within
organizational boundaries. The resources are accessed over a private and secured intranet, and are all owned
and controlled by the organization’s IT department. In essence, the cloud computing business model is
brought and managed in-house to enable shared IT services.
A public cloud is a domain where the public Internet is used to obtain cloud services. The resources that
make up those services are owned by the respective cloud service providers. Some examples include
Salesforce.com, Google App Engine and Google search, Microsoft Azure, and Amazon’s bevy of Web services.

5. A hybrid cloud is a combination of internal and external clouds, where services from each domain are
consumed in an integrated fashion and include an extended relationship with the selected external service
providers.
Public cloud services like Amazon, Google, Salesforce, et al drive cost down and scale up by trying to support
thousands, perhaps millions of businesses on their platforms. They centralize all of their services in a few data
centers around the world, and try to deliver global services – at acceptable performance – from these
locations. This is the purest vision of the cloud. It completely abstracts away all the complexity of dealing
with physical IT infrastructure. Due to thin-provisioning and virtualization, these vendors can present a
seemingly limitless data center infrastructure at a low monthly cost.
Private cloud services take the fundamental business and delivery model for public vendors and scale it down
to delivering the computing capacity for an individual enterprise. For enterprises that have tens of thousands
or hundreds of thousands of employees, they may also reach the tipping point where they can cost effectively
provide the type of instant, seemingly endless computing and storage capacity that public vendors have.
REASONS TO BUILD PRIVATE CLOUDS
•Lower Capacity Pooling resources will let organizations reduce computing capacity by giving higher-
priority tasks power during peaks
•Reduce Overhead x86 servers and related resources in a virtual data center can be managed as a unit
•Prepare A private cloud will help IT teams get ready for private-public hybrid clouds in the future data
center
By consolidating storage and applications, virtualizing infrastructure, and then providing acceleration to
branch offices and mobile workers, businesses are beginning to create private cloud services. In essence,
businesses are taking their physical data centers and changing the way they manage the services that run out
of that data center. In addition to overcoming issues of availability, security, and lock-in, organizations see
one other benefit to the private cloud model: dealing with sunken data center costs.
Over time, businesses that adopt a private cloud model may more easily transition to a hybrid model that uses
both private and public cloud models. In fact, in a recent discussion with a top-10 engineering companies, the
CTO looked at the public cloud as ‘flex capacity’ to support their private cloud infrastructure. As large
projects come online, shift locations, or undergo other transitions, public cloud services may supplement their
internal capacity to ensure that IT services are not a bottleneck to completing a revenue-generating project
on schedule.

6. At a fundamental level, the value proposition promised by cloud computing remains much the same as for
virtualization: a means to reduce expenses and improved agility to meet changing business needs.
CLOUD BURSTING
Cloud bursting is the ability to leverage external cloud services on a short-term, as-needed basis. This is a way
for an organization to extend its existing internal IT infrastructure or private cloud. For example, if you
require additional compute capacity relatively quickly and for a short period of time, you could lease the
required capacity from a cloud service provider and end your agreement when this need subsides. This would
be typically useful around seasonal or event-based peaks of traffic that push the existing IT infrastructure
over its capacity, but is not consistent enough to warrant additional hardware and software investment which
would for the most part sit idle. The resources are acquired from the cloud service provider, secured,
provisioned, and added to load balancers so that they then have the ability to take on the additional requests.
This can happen on an approved, scheduled, or as-needed basis.
MOVING TOWARDS GREEN IT
Virtualization and consolidation are a step towards setting up a Green IT infrastructure.
•Greening the IT infrastructure reduces power and cooling costs because the technology requires less
energy and are more efficient than older hardware platforms
•Greening means more efficient management of data centers, which means more cost savings
•Green IT is composed of several technologies that all have the goal of reducing power consumption,
overall data center footprint, consolidating locations and resources, and improving efficiency of
operations.
Consolidation provides a more flexible and efficient platform that helps reduce power consumption.
Implementing virtualization technologies helps with consolidating environments and also provides the
flexibility to use only the power required to run those virtual machines. Instead of multiple single servers
dedicated to a single function, multiple workloads can run on one machine. Once physical servers have been
converted to virtual servers, the data center will see the benefits of more efficient processing.
CONCLUSION
Virtualization and infrastructure consolidation can offer significant benefits for both IT and business
operations. The cost savings and administrative efficiencies are the main reasons why organizations are
looking to consolidate and move to a virtual infrastructure en masse.
Virtualization is the key. Most companies’ first step on the virtualization path is to consolidate their servers,
using virtualization to run multiple applications on each server instead of just one, increasing the utilization
rate of (and getting more value from) every server and, thus, dramatically reducing the number of servers
they need to buy, rack, power, cool, and manage. Leveraging virtualization to better serve users gives the
organization the obvious lower TCO, but also allows for accountability of usage, simplifies and meets the
needs of on-demand infrastructure requests, and allows for ability to serve, control and manage SLAs.
Virtualization has played and will continue to play a huge role in cloud computing. It is the technology that
has allowed service providers to deliver lower-cost hosting environments to businesses of all sizes today.
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