Dell Exec: Straight Talk on Virtualization

According to Dell's Erik Dithmer, virtualization, or installing multiple virtual servers on a single computer, is not worth it for most small businesses

By Gene Marks

Poor Balloon Boy. At first we took pity on him when we heard that he might be trapped in a hot air balloon thousands of feet above the Colorado skies. Then we became curious when we learned little Balloon Boy wasn't in the balloon at all, but hiding in his own house. Later, we got angry as the evidence indicated that Balloon Dad may have been making up the story all along.

If the allegations are true, shame on you, Balloon Dad. You need to set a better example for your children. You need to be more like Erik Dithmer.

Dithmer is the general manager of Dell's (DELL) Small Medium Business (SMB) Americas Div. And, unlike the many equivocators I know in the technology business, Dithmer tells the truth, especially when it comes to virtualization.

Drooling Over Virtualization

For many small businesses like mine, Dithmer doesn't recommend it. Thanks, Erik. I completely agree. Virtualization refers to the process of installing multiple "virtual" servers on a single computer. The idea is that instead of having a bunch of machines operating at only a fraction of capacity, put a single machine more fully to use. IT guys and computer companies have been drooling over this stuff for years.

Why? Because many IT guys are just like Balloon Dad. They like to make claims about virtualization to suit their own personal aims. Balloon Dad seemed to be pitching a new reality TV show. For IT guys, the aim is to persuade clients, particularly small business clients, to panic and fly into action and adopt an unnecessary technology just to make a few more bucks for themselves.

Don't get me wrong. For many companies, virtualization is an excellent technology. There are huge benefits from getting rid of a bunch of computers and running all your business applications on one box. You can cut the cost of powering those machines, save on space, and protect yourself so that if one application crashes it affects only one virtual server, not the entire machine.

Forecasting Strong Demand

Gartner (IT), the research firm, is predicting strong demand for virtualization technologies for businesses over the next three years. "For years the entry point was simply too high for small enterprises, but increased competition by server vendors has enabled smaller firms to embrace virtualization," Gartner says. Industry leaders like VMware (VMW) continue to beef up their products aimed at SMBs. IT guys around the country are licking their chops.

You'd think that Dithmer, like these computer guys, would be telling business owners like me how great this stuff is. This way, he can sell us a lot of those big, beefy Dell servers, along with related services, to handle those virtual environments. Sounds like a great revenue generator in these revenue-challenged times, right?

Not to honest guys like Dithmer. In many cases he doesn't recommend virtualization at all. "If you've got five servers running at even 30%-45% capacity, but they're running smoothly, then you'll only wind up spending a bunch of money to save a little money, if any at all," he says.

Benefits Aren't Apparent

Hey, Balloon Dad, listen up. That's called honesty. Most of the 27 million small business owners in this country have little need for virtualization. Dithmer gets that most of us have fewer than five or six servers in our companies. He understands that most of us are not running high-growth, high-storage-type applications. But we are running more of our applications in the cloud. And the rest of our accounting, e-mail, and contact management software are working just fine on their own servers, too.

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