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The Citrix Virtualisation Index

January 2010

www.citrix.com

WHITEPAPER Virtualisation Index


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Foreword

Virtualisation is one of the fastest moving technologies in corporate IT. It offers

tremendous opportunities for improved computing performance, and end-userexperience, while simultaneously cutting costs and centralising control andmanagement.

Virtualisation will revolutionise the way we work. Again. And in manydifferent ways. At a base level, for example, there is virtualisation within thedatacentre (server virtualisation) and at the desktop (desktop virtualisation,which includes laptops and mobile devices). Although virtualisation can beapplied to both, the aim, approach, technology and benefits differ considerablybetween the two.

In both areas, virtualisation is still regarded as a new technology. Virtualisationwithin the datacentre is more established, yet according to Gartner, Inc

virtual machines for x86 architecture servers were first introduced in 2001,and, today, are used for less than 20% of all x86 architecture workloads. 1

Desktop virtualisation is newer still. There is still a lot of confusion aroundthe term, with some still seeing it as synonymous with Virtual DesktopInfrastructure (VDI) in which Windows client operating systems are runas virtual machines in the datacentre, but in fact it encompasses a broadrange of use cases, from native execution of streamed desktops, applicationvirtualisation, local virtualisation of desktops, bare metal hypervisors ondevices and user-profile management.

This report aims to give a snapshot of how large enterprises view virtualisation;an end-user perspective on the adoption of virtualisation to date and future

intentions. It is those within large enterprises that will lead the virtualisationrevolution as they seek to deliver their company the best competitive advantagepossible through the shrewd use of technology.

The findings of the report are based on a survey of 700 chief informationofficers across four countries, working for organisations with more than500 employees. It gives a statistically valid view of virtualisation withinlarge organisations in each country. This report focuses on findings at aninternational level, but highlights any particular variance between countries.

I hope you find the report of use, and I encourage your feedback.

Yours sincerely,

Mark Templeton, CEO, Citrix

Definitions for this survey

Server virtualisation: Partitioning a physical server computer into multiple servers such that each has theappearance and capabilities of running on its own virtual dedicated machine.

Desktop virtualisation: Virtualisation technologies that affect the end-user computing environment, acrossany device, including VDI, streaming desktop, application virtualisation (through hosting or streaming), localvirtualisation of desktops and user-profile management.

Sample size

1 Gartner Inc, Hype Cycle for Real-Time Infrastructure, 2009 (29 July 2009)

The primary research findings are based on 700 chief information officers across four territories. 400 were polledin North America, with a further 100 surveyed in each of the other three countries: Germany, Japan and the UK.

The research was conducted independently by Vanson Bourne in November 2009.


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Current usage of virtualisation

and plans

Server virtualisation has been adopted at some level by around two-thirdof organisations with over 500 employees, with North America and the UKsurging ahead with about 70 per cent deploying the technology.

FIGURE 1a (Source: Citrix Virtualisation Index)

Desktop virtualisation has also been adopted in some form by around two-thirds of the organisations surveyed worldwide, but the contrast betweencountries is starker. In our sample, North America and Germany are leadingdeployments, while just under half of Japanese companies have taken a lookat desktop virtualisation and the UK is a little further ahead at 52 per cent.

For those yet to implement the technology, there is clearly a greater intentionto deploy server virtualisation (47 per cent during 2010) while 29 per cent areeither not sure when they are implementing the technology or have no plansor intention to rollout desktop virtualisation, reflecting the greater maturityof server virtualisation.

FIGURE 1b (Source: Citrix Virtualisation Index)



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However it is the extent of usage that is perhaps more enlightening, as figure 2shows.

Perhaps the first thing to note is that the adoption of virtualisation, while certainlyunderway, is still very much a work in progress. Less than a quarter of companies

across the four countries surveyed have put server virtualisation to use acrossthe organisation, and less than a fifth in the desktop space. For both sidesof virtualisation, half of companies are yet to get further than trials or pilotprojects.

The second key takeaway, and an encouraging one, is that the vast majorityof those who have got far enough to implement a limited rollout have already,or intend within the next 12 months, to make greater use of virtualisation.Only around 10 per cent of those surveyed have a limited implementation ofvirtualisation and have no plans to extend its usage within the next 12 months.Given the pressure on IT budgets as a result of the economic climate, this seemsa remarkably low figure.

Finally, to give an impression of the difference in adoption between individualcountries, figures 3a and 3b combine evaluating and trialling to representearly adoption and limited rollout, extending in 2010 and across theorganisation to indicate mature adoption (limited rollout and not usinghave been left out).

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FIGURE 2 (Source: Citrix Virtualisation Index)


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Based on this extrapolation it is clear that, within this sample size, the UK isthe furthest progressed in server use of virtualisation while North America,

Japan and Germany are earlier in the cycle.

Extensibility

All countries are in an earlier phase of adoption for desktop virtualisationthan for server. North America appears to be marginally further along theadoption curve but there is no major difference between any of the countries.

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FIGURE 3a (Source: Citrix Virtualisation Index)

FIGURE 3b (Source: Citrix Virtualisation Index)


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The drivers and inhibitors of

virtualisation

Given the level of adoption, and that few of those who introduce virtualisationabandon it, clearly the benefits of virtualisation outweighs the challenges.However, there is a marked distinction between the benefits of server anddesktop virtualisation. Firstly, as figure 4 shows, the advantages of virtualisationwithin the datacentre are straight forward.

The perennial concern of security hangs over server virtualisation (see figure 5),although it is difficult to understand why if the servers being virtualised remainon premises. That is not to say virtualised servers in a third party datacentre via the cloud or otherwise are insecure (far from it), but security worries arenormally eased if the company retains indirect control, rather than allowing athird party to fully control and manage their data.

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Licensing concerns are completely understandable, although virtualisationlicences are generally better structured and understood than ever before.Complexity is a genuine pain point for many companies. This is indicatedby the finding that, according to Gartner Inc only a minority (about 15%

to 20%) of the overall x86 installed server base has been virtualised, but thisfigure is expected to increase significantly in next two to three years2.

Concerns over the initial cost of server virtualisation are often over-blown too.There are now many return-on-investment studies available that can help winbudgetary approval, and within the public sector the associated environmentalbenefits can also help sway decision-making. Introducing virtualisation intandem with the server refresh cycle can prove a zero-cost option for manyorganisations while open source hypervisors are another very low cost option,along with free software from commercial vendors. For many firms undercapital-spending pressure, turning to a managed services provider is anotheralternative.

Moving onto desktop virtualisation, figure 6 shows that organisations believethere is a wider range of benefits than on the server side, some of which willbe more applicable to certain types of organisations than others. The top threebenefits appear to be roughly of equal importance.

That the ability to give staff access from any device or location is listed as atop three benefit is surprising given the economic environment, although thismay reflect cost saving intentions as more staff are given the facilities to workat home or on the move. Alternatively it could be in recognition that the warfor young talent, as the global economy warms up in 2010, is expected torevolve around attracting and retaining high quality staff by providing flexibleworking environments.

Faster deployment, ease of migration and reduced total cost of ownership(TCO) all point to a ripe frustration within organisations to improve the PCrefresh cycles, operating system upgrades and patch management.



2 Gartner Inc, Hype Cycle for Real-Time Infrastructure, 2009 (29 July 2009)


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Opinion around the security of desktop virtualisation is divided. It ranks as oneof the main benefits, yet is also listed as the number one concern (see figure 7).The polarisation most likely reflects the level of understanding around desktopvirtualisation. Given the range of technologies available under the desktop

virtualisation umbrella, and the number of different types of workers (fromdesk-based data entry to highly mobile senior executives), the confusion is easyto see. However a comprehensive desktop virtualisation strategy, especially withhypervisors embedded into laptop chips coming to the market in 2010, ensuresthere are appropriately secure ways to virtualise any device. Clearly there is anopportunity for virtualisation vendors to better articulate the security benefitsof desktop virtualisation.

As for server virtualisation, licensing raises concerns but again, it is far lessof an issue than it used to be. Indeed, given that desktop virtualisation is thenewer technology it benefits significantly from the licensing models alreadydeveloped for virtualisation of the datacentre.

Complexity is an understandable irritation. On the one hand desktop virtuali-sation is still often mistaken as a synonym for virtual desktop infrastructure(VDI) and therefore seems ill-equipped for enterprise-wide use. At the otherextreme, there are definitions of desktop virtualisation that list over 20 sub-

technologies. The definition in this report (see page 2) is how Citrix views theterm, and is broadly adopted.

As vendors are able to offer a complete suite of technologies to cover all typesof desktops (including laptops and mobile devices) and all types of workerroles, which is very close to where Citrix believes it is, the whole area shouldbecome better defined.

Vendor lock-in concerns are genuine in most areas of technology, but goodquality virtualisation software exists in the open source community (forexample Amazon and Google have both made good use of the open sourceXen hypervisor) and most major vendors guarantee open standards.

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That user experience doesnt come higher up on the list of concerns is perhapsa surprise, and is possibly a complaint that will increase as some solutions proveunsuitable for more knowledge-based workers and senior staff, especiallythose that need to remain mobile. Alongside security (which is naturally well

addressed by virtualisation) user experience is the most important factor inthe successful use of desktop virtualisation. An extremely high quality end-user experience across the entire enterprise should be expected, but this doesrequire a wide-ranging and flexible portfolio of complementary technologies.

Planned investment and estimated

returns

To account accurately for an investment in virtualisation the calculation

needs to cover a broad range of spending including virtualisation software,additional licensing for applications run across virtualised environments,services, device refresh and infrastructure.

Likewise savings have to be recognised across a number of areas includingimproved deployment of new applications, centralised management of updatesand other maintenance, reduced helpdesk requirements and innovations suchas bring your own computer schemes (employees purchasing their owncomputer using a grant from the company).

As a result, both the investment and return figures represent a large proportionof an organisations IT budget. Virtualisation investment plans will rise fromaround 15 per cent of the IT revenue in 2010 to 20 per cent in 2014. Over

that same time period, savings derived from virtualisation will rise from 25per cent of the overall IT budget to 36 per cent in 2014.

In short, done properly, the more a company invests in virtualisation, themore returns it will enjoy.




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Virtualisation and the cloud

Cloud computing is perhaps the only area of technology that is suffering from

a similar level of hype as virtualisation. Having been around a little longer, andwith more proof points already established, virtualisation is probably drawingless cynicism and yet the two are closely combined. Virtualisation is the enablingtechnology of cloud computing, both for end-user organisations and cloudproviders.

While around two-thirds of companies are utilising some level of server ordesktop virtualisation, only a third cited having deployed virtualisation aspart of a broader cloud computing initiative. There are significantly differentadoption levels between countries. In North America for example, 45 percent of organisations are using virtualisation to aid cloud computing whilein Germany and the UK that figure is 17 and 18 per cent respectively.

As might be expected, organisations use of cloud (and virtualisation to supportit) is in its infancy as figure 9 demonstrates. Although results dont vary muchbetween countries in this study, it appears that North America and Japan havethe most deployments while the UK lags behind.

Of those not already utilising virtualisation to aid cloud computing, close tohalf intend to implement it during 2010 (again the UK is a notable laggard).Perhaps the most telling statistic is that seven per cent have no plans to usevirtualisation to support cloud computing initiatives.

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With interest in cloud computing evidently high within organisations, it isnatural to ask what the drivers behind cloud are from an end-user perspective.The overwhelming response is that it provides greater flexibility, for example,to support new projects or running test environments. The elasticity thatcloud offers is also highlighted, to support peaks in demand, while the moresober benefits of improved cost efficiency and stronger disaster recovery alsofeatures heavily.





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Likewise, as cloud computing is still at an early stage in corporate ITenvironments, it is interesting to assess the perceived challenges it presents.Security is the main concern, by quite some margin.

Closing thoughts

Without a doubt, virtualisation is a major force for change in corporate IT.Server virtualisation alone has already delivered considerable efficiency gainswithin corporate IT as well as largely enabling the birth of cloud computing.

Yet even this area of virtualisation is still young; barely adolescent in humanterms. Less than a quarter of companies feel they have deployed virtualisationacross the organisation (and this only reflects reach, not depth; deploymentwill be far from complete even in these companies). At the end of 2009, half ofcompanies had not gone beyond evaluation and trials, although it is clear that2010 will see an enthusiastic implementation of server virtualisation. Closeto half of the 700 companies surveyed state they will extend or begin servervirtualisation implementation in 2010.

The benefits of server virtualisation are clear; consolidation reduced totalcost of ownership (TCO) and improved disaster recovery while security andlicensing are the primary corporate IT concerns.

However, if the corporate deployment of server virtualisation is adolescent,the utilisation of desktop virtualisation is in its infancy. While, like servervirtualisation, two-third of companies have adopted desktop virtualisationin some way it is generally at a much lower level, with Japan and the UKparticularly reticent to embrace it. There is also less intention to deploydesktop virtualisation than server virtualisation in 2010.

Given the launch of Microsoft Windows 7 and the fact that many organisationsremain on Microsoft Windows XP, serious interest in desktop virtualisation

is likely to increase in 2010 as companies seek ways to ease deployment, and

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utilise their PC refresh cycle budget to bring in desktop virtualisation atzero additional cost. Companies in North America and Germany seem tobe particularly aware of the possibilities that desktop virtualisation offers.

The primary benefits of desktop virtualisation are seen as: faster desktopdeployment, the ability for staff to access from any location on any deviceand data security/access control. Reduced TCO is also a major incentive.

Ironically, and reflective of the general level of understanding around desktopvirtualisation, principal concerns revolve around security, licensing and initialcost all of which are actually very well addressed.

Given the range of technologies available under the desktop virtualisationumbrella, and the number of different types of workers (from desk-baseddata entry to highly mobile senior executives), the confusion is easy tounderstand. The significant time and resources dominated by traditionaldesktop management - combined with pressure to improve efficiencies, the

consumerisation of IT, and Intels vPro chip will encourage corporate ITto thoroughly investigate desktop virtualisation and take some fundamentaldecisions on how to provision and support desktop in the future.

As a whole, virtualisation represents a significant proportion of corporateITs spending and efficiencies. Virtualisation investment plans will rise fromaround 15 per cent of the IT revenue in 2010 to 20 per cent in 2014. Overthat same time period, savings derived from virtualisation will rise from 25per cent of the overall IT budget to 36 per cent in 2014.

While only a third of companies are deploying virtualisation directly inrelation to a broader cloud computing initiative, greater use of virtualisationinside organisations (for example, the creation of an internal cloud) will

encourage use of external cloud computing.

North American companies are notably ahead in terms of embracing cloudcomputing, while companies in Germany and the UK are far less enthusiastic.Of those utilising cloud, over half are still evaluating or trialling. The currentprimary driver for cloud is that it provides greater flexibility, such as supportingnew projects or running test environments. The ability to support peaks indemand, improved cost efficiency and stronger disaster recovery are also muchappreciated.



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Final thoughts from

Mark Templeton

I hope that the Citrix Virtualisation Index has given an insight into the use andadoption of virtualisation, as judged by those at the sharp end the people whomake the best use of technology to help their company succeed.

Server virtualisation is still in its early days and corporate IT has far more toreap from this area of technology. As for desktop virtualisation, were barelyseeing the tip of a much bigger phenomenon.

The vast majority of those who have got far enough to implement a limitedrollout have already, or intend within the next 12 months, to make greater useof virtualisation.

Though only a third of companies are currently deploying virtualisation indirect relation to a broader cloud computing initiative, just seven per cent haveno plans to use virtualisation to support cloud computing initiatives.

Intentions are clear.

Mark Templeton, CEO, Citrix

About CitrixCitrix Systems, Inc. (NASDAQ:CTXS) is the leading provider of virtualisation, networking and software as a service technologiesfor more than 230,000 organisations worldwide. Its Citrix Delivery Center, Citrix Cloud Center (C3) and Citrix Online Servicesproduct families radically simplify computing for millions of users, delivering applications as an on-demand service to any user,in any location on any device. Citrix customers include the worlds largest Internet companies, 99 percent of Fortune Global 500enterprises, and hundreds of thousands of small businesses and prosumers worldwide. Citrix partners with over 10,000 companiesworldwide in more than 100 countries. Founded in 1989, annual revenue in 2008 was $1.6 billion.

2010 Citrix Systems, Inc. All rights reserved. Citrix, Citrix Delivery Center, XenApp, XenServer, NetScaler, XenDesktop,Access Gateway, Branch Repeater, HDX and Citrix Receiver are trademarks of Citrix Systems, Inc. and/or one or more of itssubsidiaries, and may be registered in the United States Patent and Trademark Office and in other countries. All other trademarksand registered trademarks are property of their respective owners.

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