The pace of server and storage consolidation and virtualization in the Australian small and medium-sized business (SMB) market is progressing at a considerable rate, according to a new IDC report. Australian SMBs must continually add new servers and storage in order to deploy, maintain and grow a broad array of services and applications. However, the higher number of servers creates challenges such as rising costs, poor ROI, and decreasing manageability.

"A main priority for SMBs is to increase server utilization. IT managers do not want to have dozens of servers lying around, running at 15% utilization, consuming valuable real estate and increasingly expensive power. They want all the workload consolidated on a few powerful servers, with a much better level of systems management and service level," said Jean-Marc Annonier, IDC's research manager for small and medium business markets.

"Cost considerations continue to be the strongest driver to the adoption of consolidation and virtualization in Australian SMBs. This is due to operation costs decreasing as the ratio of personnel to number of servers/amount of storage increases," adds Annonier.

The IDC study has also revealed that:

SMBs find adding more servers and storage challenging. Although 60% of SMBs could accommodate more servers and storage in their server room, they are not inclined to do so because of the challenges implied. As a result, around half of SMBs are investing in consolidation, virtualization and better management tools to deal with the situation.

Consolidation is well and truly adopted by SMBs. Many SMBs consolidate as part of the natural refresh cycle of their technology infrastructures. These efforts are habitual processes that focus on reducing the number of data centers as the technology infrastructure is updated and augmented. By consolidating, SMBs are able to boost efficiency and improve their service capabilities whilst maintaining an infrastructure that is both robust, highly available and adaptive to changing business requirements.

Server virtualization is slowly taking off in SMBs. Virtualization is still a new concept for the majority of SMBs and will take some time for vendors to educate the market about the increased systems administration efficiency and the hardware cost savings that virtualization technologies can bring.

Data storage capacity continues to grow. Data storage capacity needed by SMBs continues to grow at double-digit rate and sophisticated storage strategies based on SAN are increasingly being adopted to cater for high scalability and flexibility. The vendor community is helping considerably by offering well-priced solutions and services that allow SMBs to make appropriate investment decisions.

About this study

The IDC report, "Australia Small and Medium-Sized Business Outsourcing Adoption 2007: A Little Less Conversation, a Little More Action Please" (Jan 2008, Doc #AU381104P), examines the adoption and usage of business process and technological outsourcing in the Australia small and medium-sized businesses (SMBs) market. Based on the results from IDC's 2007 SMB survey, the study discusses Australia SMB outsourcing adoption by function, spending on outsourcing, cost-savings expectations and negative outcomes.

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