Retailers are notoriously good at maximizing space. From analyzing sales of every product to tracking the cost of each fixture in a location, retailers are driven to make every square foot profitable. It is not without irony, then, that many of these same retailers are facing a space crisis, as servers and computers threaten to overtake entire IT rooms. The answer to this looming problem is one of the hottest technology trends of 2008 – virtualization. Named one of the best new technologies by many CIOs, virtualization promises not only to save space by consolidating the number of PCs and servers, but to save energy and reduce overall costs for retailers. With virtualization becoming more mainstream, now may be the time for

discussions to move out of the IT center and into the boardroom.

Virtualization isolates — or “unbinds” — one computing resource from another, allowing retailers to better optimize those resources. For example, rather than paying for many under-utilized server machines, each dedicated to a specific application, server virtualization allows retailers to consolidate numerous applications on a smaller number of better-utilized machines at their stores, warehouses and headquarters.

In a 2008 Microsoft survey of retailers, 49 percent reported that cost savings was a major influencer for adopting virtualization. While this can be significant, saving money is just a part of the value that virtualization can deliver.

Data deluge
With competition and consumer expectations on the rise, retailers are striving to better access and utilize real-time information in next-generation store technologies. From kiosks, self-service checkouts, mobile hand-helds and electronic signage to computerized shopping carts that present everything from nutritional information to manufacturer promotions, these solutions all deliver information to support an exceptional and engaging customer experience.

What these solutions also have in common is digital information: In fact, 161 billion gigabytes of digital information was created, stored and replicated in 2006, according to a 2007 forecast by IDC. This equates to three million times the amount of information in all the books ever written. IDC further predicts that this figure will grow more than five-fold, to 988 billion gigabytes, by 2010. A majority of that data will eventually affect business networks — but are retail infrastructures ready for it?

There’s no doubt that these new technologies are creating a sky’s-the-limit opportunity for retail, but they also create issues related to IT sprawl and complexity.

Teams managing the rollout of applications, databases and other requirements are finding that their IT centers are operating at capacity — coming close to exceeding their physical space, power usage and cooling limits. Even more disheartening: many servers are running at only 10 to 15 percent utilization, and adding one more server to utilize new applications would require some retailers to enlarge the IT centers at every store in their chain. Yet these are all problems that virtualization (and its associated consolidation and simplification) can solve.

Virtualization and the environment
Beyond the ability to reduce costs and space, virtualization can also support retailers’ green initiatives by making the most efficient use of available system resources in their data centers, which the U.S. Department of Energy has labeled as the fastest-growing energy consumer in the United States. One company, for example, reported that power consumption on its virtualized machines decreased by 89 to 91 percent compared with physical servers, resulting in annual savings of $500,000 across 2,000 virtual machines.

With fewer people required to manage those computers, less space required to house them and fewer kilowatt hours of power to run them, retailers will save money both at the corporate and store levels and reduce their environmental footprint.

The benefits are compelling, but the question on many retailers’ minds is whether virtualization will be too cost-prohibitive and complex to fully adopt. We say, “Not with the right partner” — one capable of leading a comprehensive, economical approach that addresses virtualization at the hardware, application and management levels of the enterprise.

In the end, virtualization and a dynamic IT infrastructure are all about helping retailers provide the resources people need at a moment’s notice, and making organizations much more agile to achieve goals that simply weren’t possible before.

Because it is so vital, Microsoft is committed to driving the adoption of virtualization across your PCs and IT centers.