Virtualization Offers Opportunities, Challenges for SMBs, Report Says

By Nathan Eddy  |  Print this article Print

While virtualization offers VARs and small businesses in general great opportunities, understaffed IT departments in many midmarket businesses will need to move quickly to address the migration to virtualization, says a report from AMI-Partners.

IT business and market analytics company AMI-Partners announced the findings of a report July 22 suggesting small and midsize businesses are increasingly turning to virtualization to solve their business challenges, which AMI said posed "serious implications" for the midmarket ecosystem, with effects such as "limiting the growth in shipments of physical IT equipment, especially servers."

The report also noted the migration to virtualization is "changing the channel partner skills [SMBs] require. IT vendors, distributors and SMB channel partners need to understand this shift and upgrade the entire ecosystem to meet the changing needs of SMBs," AMI said, "based on new research."

The company statement continued, "While first-time server adopters will continue to drive overall server shipments, they will purchase low-priced, low-margin equipment. Most revenues and profits will come from SMBs that already own a few servers each and are ready to use virtualization."

"Driven by their need to optimize IT infrastructure—especially in the current economic environment and enabled by increasing availability of SMB-focused products from virtualization vendors—there has been a significant increase in SMB virtualization adoption (servers, clients, storage, applications) over the last year," said Anil Miglani, SVP of IT infrastructure and managed services research at AMI.

The AMI statement concluded, "In response to this interest, many SMB channel partners have already started to offer virtualization solutions. However, most SMB channel partners themselves are SMBs with limited skills and resources and find themselves overwhelmed with the rapidly changing landscape. Channel partners who do not quickly acquire the required skills will find their clients looking for others to help them.

"As these SMBs successfully implement virtualization, and simultaneously increase their use of cloud-based applications and services, they will require fewer (although more powerful) servers, limiting the revenue potential for SMB channel partners from the resale activities and making the revenues from services even more important. While the initial adopters of virtualization have been the more sophisticated SMBs, this is changing rapidly. IT vendors need to understand the characteristics and needs of SMBs that are already using virtualization as well as those who plan to use it in the near future in order to focus their sales and marketing efforts."