Data Center

Virtual Savings Equal Real Dollars

There are significant cost savings to be found in virtualization technologies.

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Wylie Wong is a freelance journalist who specializes in business, technology and sports. He is a regular contributor to the CDW family of technology magazines.

Five years ago, Minneapolis law firm Winthrop & Weinstine began virtualizing its servers. IT Director Craig Wilson consolidated 45 physical servers to six, improved business continuity and reduced the load on his uninterruptible power supplies, which were reaching capacity.

Today, the virtual environment provides continued cost savings.

A cluster of six physical servers runs 65 virtual machines. Every time Wilson installs new software, he simply spins up a new virtual server, rather than having to buy a new machine.

In fact, in 2010, when he upgraded from Microsoft Exchange 2003 to Exchange 2010, he saved the company about $60,000 in hardware costs by virtualizing the application.

Wilson has also moved each of the firm’s 220 employees to virtual desktops, which has resulted in substantial cost savings. He began the project three years ago, using VMware software and Pano Logic zero client devices, which are essentially thin clients without CPUs, memory, operating systems or drivers.

For more on how businesses are generating savings from IT, read BizTech's feature story: "Businesses Save Money with New Technologies and Reinvest in Other Areas."

Client virtualization simplifies IT management because IT staffers can remotely troubleshoot employees’ desktops. It also boosts productivity. Remote workers, traveling attorneys and teleworkers can pull up their desktops on any web- enabled device, such as a tablet or notebook, Wilson says.

As for cost savings, the combined cost of virtualization software and zero client devices is 70 percent less than the cost of desktop and notebook computers, he says. The reduction in power consumption also saves the company $20,000 to $30,000 a year. The savings from virtualization have allowed Wilson to do more projects without breaking the bank.

Which of the following technologies or initiatives do you consider the most beneficial at saving your company money?

57% Server and storage virtualization
20% Cloud or managed services
16% Unified communications
7% A “bring your own device” program

SOURCE: CDW poll of 367 BizTech readers

“ ‘Do more with less’ is always the model we use. We’re not lavish spenders, and we watch what we spend,” he says.

Winthrop & Weinstine has been able to reinvest the savings from virtualization on other IT needs. For example, the firm this year plans to purchase 45 new copiers and CRM software.

The company is also in the midst of upgrading to the latest Cisco Unified Communications software, and it is saving money on hardware by virtualizing it. Winthrop & Weinstine is installing Cisco Systems’ presence software as well, which will improve employee communication and collaboration.

In general, smart IT spending is not the same thing as buying the cheapest technology, Wilson says. It’s about buying technology that provides cost savings, a good return on investment and improved worker productivity.

“I’m looking for technology that enables my clients — the attorneys and employees of the firm — to collaborate, be more productive and be more efficient,” he adds.

I.T. Budgets Rise, but Cost Savings are Still a Focus

Many IT managers are seeing their IT budgets increase this year, but reducing costs is still a top priority, a new study shows.

In a survey of 614 senior IT professionals, 61 percent say their 2012 IT budget has increased from 2011. Another 26 percent say their budgets have remained the same, while 13 percent face a budget decrease, according to Enterprise Strategy Group.

While more companies are loosening their purse strings, reducing costs is still the main driver for IT spending, says ESG Senior Research Analyst Bill Lundell, who co-authored the recent 2012 IT Spending Intentions Survey.

In fact, the two key factors in getting management to sign off on IT projects are improving business processes and return on investment.

“Companies have gleaned discipline from the lean, hard times. Maybe cost doesn’t dictate every single move like it did in 2009, but it’s certainly a top-of-mind consideration,” Lundell says. “They will not just plunk down money for technology. There has to be some measure of proof that there is a compelling business case, that upfront investments, over the course of time, will have an element of cost mitigation.”

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