Virtualization and hardware sales

January 23, 2007

I noticed this blog entry on ZDNet, Virtualization begins to haunt hardware makers, that guesses what you might expect: the current wave of companies consolidating via virtualization is what’s been eating into hardware sales.

Yet Jonathan Schwartz (CEO of Sun) recently took the position that:

if you can double server utilization via Solaris Containers or VMWare [sic], people don’t buy fewer computers – they buy more. The value of innovation, at least to our core customers, is growing so fast that if the price declines, the overall return (value/price) goes through the roof – encouraging a feedback loop.

Could it be that Schwartz is still right but we’ll just first see a noticeable dip (”correction”) this year as most people merely consolidate instead of buying more hardware?

Open source VMs (and their accompanying management infrastructure) are eventually going to be just another standard part of the datacenter toolbox. It seems that value/price would stabilize and people would get used to it; this “feedback loop” can’t feed off itself forever.

Another major shift looks possible: the datacenter could see big power savings in the next decade. The this 80 core processor that Ian Foster pointed out “uses less energy than a quad-core processor and has teraflop performance capabilities.” The ability to sleep and awake cores as demand changes (and the ability to migrate computations away from cores that are getting too hot) results in huge power savings. Sounds like a mini virtual cluster on a chip.