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The Second Wave of Virtualization

Bill Kenealy February 1, 2008

Like a painting, the topic of virtualization is subject to interpretation and can mean different things to different people. To some, virtualization is synonymous with the consolidation of hardware and the product offerings of Palo Alto, Calif.-based VMware Inc. Others see virtualization used best at the operating system and, increasingly, the application level. Still others see the true value of virtualization coming outside the data center, and regard it as a business strategy unto itself.

Despite its recent ascendancy in data centers, virtualization technology has been around for quite some time, and its roots trace back all the way to the mainframe. However one defines virtualization, it’s impact on the way carriers run their businesses is likely to grow in the coming years.

Keith Lippiatt, managing director, technology consulting, financial services, for Bermuda-based Accenture LLC, says that insurance carriers that have adopted virtualization are already reaping tangible benefits in simplicity and cost savings. Yet, “insurance companies are running at a higher cost basis than their peer groups in other industries,” he notes.

FEWER SERVERS

As head of Global Technology for G-ITO (global IT operations) for Zurich North America Commercial, John Laferriere says the company initially went through a phase of virtualization to consolidate servers and boost utilization. “We used virtualization to homogenize our hardware and software environment,” he says.


John Laferriere

Laferriere says the Schaumburg, Ill.-based company then used virtualization in non-production and, subsequently, production environments. “We are currently using virtualized and non-virtualized environments for production,” he says, adding that the company also used virtualization to improve application efficiencies. “We’ll run an application family within a virtual environment.”

More recently, virtualization complements the company’s move toward a service-oriented architecture (SOA). “We should be able to increase utilization of a particular piece of hardware through virtualization, and also use that virtualization to spit out more of the SOA components we’re going to require to handle the request.”

Likewise, Jack Wilson, enterprise architect—AVP for Farmington Hills, Mich.-based Amerisure Mutual Insurance Co., says the company employs virtualization solutions on its application, database and file servers. However, Wilson wasn’t content to just introduce virtualization into his data center, Wilson virtualized his entire data center.


Jack Wilson

SIMPLICITY THROUGH UNITY

Wilson says the increasingly complex and layered modern IT environment prodded him to look for a way to streamline operations. Thus, his philosophy was to use virtualization strategically—not just tactically as in the past. “My experience in the past was that virtualization was always used tactically, for a small portion of a company infrastructure. So, it ended up being just another layer of technology in the mix of technologies,” he says.

Wilson’s most radical step was to jettison the company’s menagerie of laptop and desktops PCs in favor of thin-client models running application virtualization software provided by Fort Lauderdale, Fla.-based Citrix Systems Inc. He initially met with resistance and worried about the psychological impact of taking away an employee’s PC and replacing it with the smaller, thin-client devices provided by San Jose, Calif.-based Wyse Technology Inc.

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