Data Centers

Making virtualization efficient: Three business use cases

Initial cost savings get the attention in virtualization deployments, but the more important results are how it can bring about new business advantages.

Experience tells us that virtualization makes companies more efficient because it can reduce their carbon footprints, shrink their data centers, and gain economies in resource utilization. But in the end analysis—the only ways virtualization means anything to the end business is in (1) the initial cost savings that it delivers from data centers that now operate fewer "metal" servers; and (2) new business advantages that virtualization brings about.

There are surprisingly few studies that talk about the latter. Nevertheless, it's important to cite key industry use cases where virtual technology has actually enabled companies to approach their businesses differently.

Here are some examples:

#1 Credit Union Service Organizations (CUSOs)

Operating as not-for-profit entities, credit unions long ago discovered that forking out the money to buy expensive servers and software for their core processing was something that many of them couldn't afford. So—they banded together to form CUSOS where they all pitched in to fund a central data center and to run a single server with a multi-tenant architecture that featured segregated virtual systems for each credit union's transaction processing. The value was immediate in operational cost savings and in delivery of value to credit union members. Without virtualization, it would not have been possible.

#2 Multi-tenant back office accounting for the oil and gas industry

Supporting over 4,200 gas and oil industry customers, Transzap is a software as a service (SaaS) company that provides ePayment and data exchange services, allowing its customers to conduct business with each other in a way that is more efficient and economical than if they were to use their own internal systems. To support its large customer base, Transzap required both processing speed and 24/7 availability. Initially, the company ran its applications and databases on multiple Intel servers running Linux—but it made the move to virtualize all of these systems on an IBM System z mainframe."We eased our manpower needs by migrating to a virtual environment," said a Transzap spokesperson. "With the combination of manpower savings and the reduction in database licenses, we achieved reductions in TCO (total cost of ownership)."

#3 Distance learning

The University of Arkansas facilitated new distance learning and resource sharing approaches in its IT curriculum to ensure that students got "real world" experience in developing enterprise systems and databases. To do this, the University used virtual systems on an IBM zEnterprise mainframe for student lab exercises that could be worked on from anywhere. The University then extended the reach and the monetization of its program to other universities throughout the country that also wanted a distance learning program with real life enterprise system exercises for students. 

Coursework was developed in a partnership with major enterprises such as Walmart, Dillards Department Stores, Tyson Foods and Federal Express. "The University has incorporated enterprise systems in its curriculum for the past ten years, in part because of the need for IT graduates with enterprise caliber skills that was present in our surrounding business community," said David Douglas, Professor of Information Systems in the Sam M. Walton College of Business at the University of Arkansas, and also the Director of Enterprise Systems.

What do all of these virtualization efforts have in common? 

They capitalized on innovation and monetization opportunities created by virtualizations—and didn't end their efforts with the initial data center gains.


Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...

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