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In 2002 and 2003 virtualization was so hot a concept that it was hard to imagine that, within two or three years, IT resources would be managed any other way.

The idea seemed to make sense: turn physical IT devices into logical resource pools that could be dynamically assigned to applications and users.

Well before the time it should have become ubiquitous, however, the market presence—if not the concept and technology—of virtualization dissipated.

The goal of virtualization was to boost utilization and simplify infrastructure by adding a layer of software that would be able to treat all the servers and storage space in a corporation as if it were one vast pool.

Administrators could then dole out chunks of processor power or storage appropriate to specific functions, no matter where the hardware supplying that resource lived.

Those laudable aims, however, were lost among vendor noise. With few exceptions, the solutions resulting from the rush to virtualization were often underwhelming. Apathy replaced the early swell of customer interest.

The situation has changed, however.

Vendors such as EMC Corp. and IBM are advancing virtualization strategies and technology that actually seem to work. And customers are buying in. EMC’s VMware, one of the few virtualization approaches that seemed to have substance beneath the hype, has helped convert virtualization from buzzword to household word among corporate customers.

The company claims that thousands of IT shops now use its server virtualization products to partition and consolidate computing resources. The company entered the server market in 2001.

On the storage virtualization side, in March IBM reported that it has surpassed 1,000 customers for its virtualization software. IBM’s SAN (storage area network) Volume Controller virtualization product now is in its sixth release.

Hewlett-Packard Co. contributed to the virtualization momentum late last month, announcing Virtualized Infrastructure Solutions for MySAP Business Suite. HP’s virtualization thrust dynamically allocates computing power, storage and bandwidth to accommodate shifting application workloads.

Jim Balderston, a senior industry analyst at market watcher The Sageza Group Inc., wrote in a research note that HP’s “aggressive virtualization offering is yet the latest indication—and should confirm to the market at large—that virtualization has moved out of the labs and into the mainstream.”

Interestingly, Balderston noted that some vendors have focused on “virtualization for the large enterprise without pointing out the similar benefits proffered to [small and midsize businesses], which are also seeking to consolidate server environments and reduce both physical and managerial complexity.”

Resellers could help bridge this gap. Product vendors tap the channel to help sell other products in the SMB space. Virtualization should be no exception.

VMware already cultivates resellers. EMC in October said it has recruited in excess of 1,000 partners worldwide.

On the open-source side, XenSource Inc., developer of the Xen hypervisor infrastructure virtualization technology, works with consultants and other partners. According to the company’s Web site, XenSource plans to roll out a formal partner program.

Overall, there’s a growing sense the virtualization has come of age. Those vendors with a number of years of experience in the market are well beyond the bleeding-edge stage. Customers report tangible benefits. And the vast SMB space looms as a mostly untapped market for virtualization.

For resellers who previously tested virtualization and found it lacking, this might be the time to jump back into a technology that has become convincingly real.