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Part 1 - Increasingly Virtual in NZ...

09 Dec 2013

As the tech world goes virtual, Heather Wright polls some experts about their views on where resellers stand to gain the most.

Darryl Grauman is bubbling with enthusiasm as he talks virtualisation.

Westcon's national manager of innovation and services proclaims virtualisation 'ground breaking' – and a big potential opportunity for New Zealand resellers, with data centre virtualisation and desktop virtualisation 'taking off' and resellers already across those areas 'streaking ahead in monetising it'.

“Those who aren't adopting virtualisation technologies are fighting World War II with World War I weapons,” he declares.

Michael Warrilow, Gartner’s Infrastructure Software Team research director, has the figures to back claims New Zealand is a world leader in virtualisation. He says while server virtualisation worldwide is around 65%, the figure is ‘easily 85% or higher’.

While Warrilow says the market for server virtualisation is reducing in New Zealand, thanks to it approaching saturation, it’s not completely off the boil.

In fact, Duncan Bennet, VMware vice president and managing director, ANZ, says VMware sees a new wave of server virtualisation, with customers looking to virtualise Unix servers and the likes.

He’s also bullish about the potential for 100% x86 appliance virtualisation, saying ‘that’s the objective’. “Most New Zealand customers have a ‘virtualise first’ policy where you virtualise – unless you can show why not to.

“As an extension of that, especially in New Zealand, we’re seeing a lot of customers migrate their Unix servers to x86 standard servers and virtualising. The virtualisation market, in itself, is still growing.”

The company’s Q3 2013 results, announced last month, certainly indicate a buoyant market, with year-on-year revenue growth of 14% to US$1.3 biliion and a net income of US$261 million.

“We’re a $5 billion business, growing at nearly 20% [with a 19% revenue growth excluding GoPivotal and divestures in 2013]. That shows that there’s still plenty of opportunity out there,” Bennet says.

According to Warrilow, VMware and Microsoft lead the server virtualisation pack. Citrix and VMware claim 90% of the desktop virtualisation market.

Hotting up...

For its part VMware has recently been doing some ‘incremental hiring’ in New Zealand, with two new roles created in areas the company believes are ‘hotting up’. Those two areas? End user computing/mobility and network virtualisation.

Neither are a huge surprise coming from VMware. The company recently purchased Desktone, a desktop-as-a-service company. “Desktop virtualisation is taking off now,” Grauman says. “But a virtual desktop alone does not make a solution.”

He says it’s crucial for resellers to also wrap the voice component into the solution. “The desktop can be available anytime, anyplace, but voice needs to follow.”

Warrilow is more circumspect about desktop virtualisation. In an October report, he noted that the ‘year of desktop virtualisation’ has been predicted numerous times over the past decade.

“Unfortunately, such predictions have concealed the underlying reality that desktop virtualisation contains multiple, conflicting drivers and challenges – just as is often the case generally for client computing.

“When positioning desktop virtualisation, sales and marketing teams need to ensure that broad, all-encompassing messaging is curtailed in favour of practical guidance that clearly positions desktop virtualisation offerings. There will never be a particular ‘year of desktop virtualisation’ — rather, there will be increased adoption based on enterprise use and business case.”

Warrilow notes that worldwide desktop virtualisation is put at around 3%-4%. “I think in New Zealand you might see around 4.5%, but it’s in niches – call centres and industries like education and government.”

That doesn’t deflate Grauman. “If you take the entire desktop fleet across New Zealand, 4.5% is nothing to be sneezed at!”

Both, however, agree that one hampering factor for desktop virtualisation is a Microsoft licensing issue. Users need to have a second license to allow virtual desktop access. It’s a license, opponents say, that has a hefty price tag.

“One of the biggest contstraints to further desktop virtualisation has been Microsoft’s licensing terms,” Warrilow says.

Adds Grauman: “It has made virtualising desktops unaffordable by licensing, not because of the technology.”

He notes that Microsoft has recently allowed all government departments to be viewed as a single customer ‘so you can multitenant all of the government departments on one piece of tin’, but adds that that is an exception to the rule.

For Part 2 - check back to The Channel on Wednesday morning.

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