Will SMBs Spend on Virtualization in 2009?

Virtualization has been widely touted as a major cost-saving technology that reduces infrastructure costs and streamlines IT management. But in this economic climate, are small and midsize businesses willing to spend their IT budgets on emerging technology? Some vendors are betting on it.

Software company DataCore is the latest vendor to offer virtualization products aimed at the small-business market. The company announced a new line of software packages, with entry prices starting at under £1400 per server, that includes thin provisioning, data migration technology, storage performance caching software, snapshots for fast disk backups, remote site disaster recovery replication and the company’s HA (High Availability) data protection.

DataCore President and CEO George Teixeira said the software is a “renewable resource” within SMBs that will provide years of return on investment, “Unlike throwaway hardware-based solutions, it can be expanded and upgraded to meet growth needs and stay on top of the rapid pace of changes in IT,” he said.

However, a recent report from research firm IDC suggests small-business owners will likely spend IT budgets on more bread-and-butter issues such as security and storage rather than on emerging technologies. The reasoning rests on the shaky global economic situation. But IDC did say a heavy marketing push by vendors should heighten interest in virtualization among SMBs in the next 12 to 24 months.

“Despite the global slowdown, SMBs across all regions need to look ahead to when the global economy rebounds,” wrote IDC’s research manager for Global SMB Research, John Roberts. “Most still have a near-term focus, with only modest interest in technology areas that have been getting a lot of attention elsewhere.”

Despite the report, other software companies are also looking to court SMBs with virtualization offerings. In October, virtualization software company VMware announced it would release three software packages by the end of 2008 to help SMBs take on virtualization projects. VMware’s least expensive kit, called Infrastructure 3 Foundation, is priced at approx. £2000 for three two-processor licenses. VMware says between 60 to 70 percent of its customers are SMBs.

In February, chip maker IBM entered the SMB virtualization market with the release of PowerVM Express, which can create up to 160 virtual partitions on a single IBM Blade or System p server. IBM said it is aiming to simplify the adoption of virtualization technologies for midmarket companies. Whether or not SMBs are going to make investments in virtualization technology a priority in 2009 remains to be seen.