How Governments Are Stretching Budgets with Virtualization

Terry Buchanan, CIO of Robeson County, N.C., is used to dealing with tight budgets — after all, he's had practice. Though Robeson is the state's largest county in terms of area, it has the smallest IT department, with a team of just five people.

The shuttering of textile firms decades ago reduced economic opportunities in the area, and the situation has only worsened during the wider fiscal crisis that began in earnest in 2008. With the local unemployment rate hovering at 12 percent, in 2010 the county built a new building to handle increased requests for social services. This did nothing to improve the funding situation. "We have to run IT on a shoestring budget," says Buchanan.

To underfunded IT departments like Buchanan's, virtualization can provide a welcome lift. Whether used for back-end servers, storage or desktop computing, virtualization saves money by hosting many instances on the same box, eliminating the need for dedicated hardware. As such, the technology can be a real money-saver — particularly welcome in government these days. Given ongoing budgetary constraints almost across the board, "this is the way government is going," says Shawn McCarthy, research director of IDC Government Insights.

Cost savings vary. Most sites will see a 20 percent to 40 percent reduction in power consumption, and most can save 10 percent to 15 percent on software licensing, McCarthy says. Virtualization can also free up space, which saves money for those government entities that lease offices. To get a full picture, McCarthy recommends performing calculations to compare current expenses with estimated spending in a virtualized environment.

Benefits Beyond Cost Savings

Given the funding climate, it's not surprising that Buchanan had virtualization on his radar as far back as 2000. Still, a virtualization project requires an initial investment in hardware and software. For years, the county could not justify it.

By 2010, the cost of hardware had dropped enough that a virtualization investment made sense, even in a sorely restricted financial climate. And this year, Robeson County officials approved an investment of $134,000 to install a virtual environment for servers and storage in the new Department of Social Services building, with a projected payback period of about four years through the elimination of existing software licenses.

Though Robeson County pursued server virtualization because of the promised cost savings, the benefits go beyond dollars and cents. According to John Culbreth, social services IT director for the county, the benefits include everything from improved disaster recovery and redundancy to ease of management and superior reliability and flexibility. IT staffers are more productive and can avoid night work for the most part. In addition, server and storage virtualization allow the county to extend its technology refresh cycle to 10 years.

One wrinkle: The county's cost savings haven't yet reached the levels Buchanan and his team expected, for a simple reason. The county operates in a highly decentralized fashion, which does not mesh well with virtualization.

"If I could move all our servers to the virtual environment right now, the county would see instant savings of $50,000 to $100,000. But the way the county is organized, I can't do it," says Buchanan.

Departments are still carving off money here and there to buy additional nonvirtualized servers, further diluting the impact of virtualization. But Buchanan is optimistic that this will change in the next few years as the political winds change.

SOURCE: "Virtualization Vacuum: The 2012 Government Virtualization Study" (Meritalk)

Wholesale Server Replacement

For more centralized organizations, the cost savings can come quickly. In 2007, the city of Walnut Creek, Calif., needed to upgrade more than 90 percent of its 80-plus servers because of obsolete technology. Laura Peabody-Park, CIO for Walnut Creek, spent the next year or so supervising a proof-of-concept project for server virtualization. The team replaced 20 servers with three VMware servers.

When that went smoothly, over the next 12 months the IT team went on to replace 60 application servers using the same three VMware servers. "We netted about $100,000 in immediate savings," says Peabody-Park. "Virtualization has saved us money in hardware replacement cost and support and maintenance." The city was able to redeploy the money it saved on an upgraded police dispatch system, which also runs on virtual hardware.

Peabody-Park expects to save more money by virtualizing desktops and notebooks using Pano Logic thin clients. Many public-sector organizations like Walnut Creek are now turning their attention to the desktop. For example, the city of Jacksonville, N.C., expects to save about $1.5 million over four years by virtualizing clients, according to city CIO Earl Bunting.

Starting a few years ago, Jacksonville began virtualizing its desktops, first on Citrix XenDesktop, then on Cisco Virtual Experience Infrastructure. Jacksonville has virtualized 350 desktops so far and plans to expand the deployment to police squad cars. "Instead of having to load the image and all the things you would have to do with the PC, you just walk over there, plug it in and walk away," Bunting says. As a result, his team receives fewer support calls, which allows them to turn their attention to other projects.

Unlike many of his peers, Bunting's budget has been fairly steady — the city is home to Marine Corps Base Camp Lejeune and therefore is well funded. "But our city council didn't want to see the IT budget continue to grow. We had to find ways to slow down the cost increases in other areas, and virtualization has helped us do that," he says.

Meanwhile, Westmoreland County, Pa., projects a five-year savings of $500,000 in maintenance and capital costs, and another $530,000 in reduced energy costs over 10 years, according to Matthew Dye, manager of technical support. The county deployed 500 Pano Logic thin clients to its user base and plans to roll out an additional 300 during the next year. "They are much easier to administer than regular PCs. Everything is in one central location," he says. "We only have roughly five support people, so we have to use every tool we can to help us be more efficient."