VIRTUALIZATION ESTIMATED TO HELP COMPANIES AVOID $98 BILLION IN IT COSTS ACROSS ASIA PACIFIC
Estimated $25.6 billion in costs avoided to date; expected to increase an additional US$72.7 billion by 2020
SINGAPORE, 15 August 2013 — VMware, Inc. (NYSE: VMW), the global leader in virtualization and cloud infrastructure, launched the Virtualization 2020 campaign in an effort to help businesses move from the client server era to mobile cloud era of computing. As a first step, VMware sponsored the IDC Server Economies Index to demonstrate the potential of virtualization in Asia Pacific, and demonstrate the impact of server virtualization in Asia-Pacific.
Titled Vision 2020: Virtualization's Potential US$98 Billion Impact (August 2013, IDC#AP77008W), the study showed that US$98 billion worth of spending is expected to be avoided in the region from 2003-2020 in the areas of server spending, power and cooling, floor space and cost of manpower and overheads. The report provides an analysis over the past 10 years and looks forward through 2020.
“This new study is evidence of the dollar value impact of virtualization on businesses. Virtualization is the foundation of the datacenter’s transformation and cloud computing’s evolution, so this is the tip of the iceberg,” said Andrew Dutton, senior vice president and general manager, VMware Asia-Pacific and Japan.
Virtualization has disrupted the industry
Evidently, virtualization has introduced significant benefits to enterprises and environmental sustainability. Organizations have been able to reduce capital and operational expenses, while reducing potential lost revenue associated with downtime, outages and failures, thus allowing their manpower to shift from routine tasks to strategic projects and adding value to the business.
Virtualization has also been a positive contributor to any datacenter sustainability model. For every watt of electricity spent on powering and cooling the server farm and datacenter, the energy generation and distribution have had to create at least five watts, through loss, leakage, step up or step down transformation.
“The IDC Server Economies Index validates the perspective that virtualization is one of the technology disruptors in Asia Pacific and likely to appear prominently on our IDC Predictions agenda for years to come,” said Avneesh Saxena, Group Vice President, Domain Research Group, IDC.
Virtualization impact across Asia Pacific
When comparing results across the countries studied, the findings showed that the mature markets of Australia, Japan and Singapore derived US$8 billion more spending in historical costs due to virtualization than the emerging markets. For these mature markets, the critical costs avoided was servers, which contributed to nearly half (47%) of overall costs in the four areas.
In contrast, the emerging markets of China (PRC), India, Indonesia, Malaysia and Thailand saw greater forecast of the costs avoided by US$15 billion in future, than the mature markets. Given that it has one of the lowest current levels of server virtualization, China saw the most significant difference between historical and forecast savings – US$39 billion – resulting in the PRC being able to increase cost avoidance by more than five times.
Virtualization avoids nearly US$100 billion in costs
Overall, results showed that the key area where costs are avoided was in the server spending category, accounting for around half (US$48.7 billion) of the overall costs across the region from 2003-2020. The next significant area of savings was in the avoidance of the power costs (US$17.6 billion) associated with these servers. Forecasts showed, however, that both physical land and power cost savings erode over time as a percentage of the overall cost avoided.
“Forecast figures point to an exciting time where more companies will embark on their journey to the software-defined datacenter – the next generation infrastructure for cloud computing, where control of the datacenter is entirely automated by software,” said Dutton. “Each new era requires a new generation of infrastructure for the enterprise, and we will continue to see virtualization power people and organizations to move from the client server era to the mobile cloud era of computing.”
About the VMware-IDC Server Economies Index
VMware commissioned IDC to create a hypothetical view of a world where x86 server virtualization never existed, and then to forecast the impact that server virtualization is likely to have made by the year 2020. IDC put together a select team of IDC worldwide, Japan and Asia Pacific analysts to build a server-centric model that shows the impact of virtualization, which models data for eight countries across APJ (Australia, India, Indonesia, Malaysia, PRC, Singapore, Thailand & Japan). The IDC Server Economies Index indicates server virtualization’s positive economic impact across two time periods, 2003-2012 (historical) and 2013-2020 (forecast), in four areas: Server Spending, Power & Cooling, Server Admin Costs, and Floor Space.
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This press release contains forward-looking statements including, among other things, statements regarding expected cost savings and additional benefits to customers in the Asia Pacific region from the use of virtualization and other products offered by VMware. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in consumer, government and information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization market, and new product and marketing initiatives by our competitors; (iv) our customers’ ability to develop, and to transition to, new products and computing strategies such as cloud computing, desktop virtualization and the software defined data center; (v) the uncertainty of customer acceptance of emerging technology; (vii) rapid technological and market changes in virtualization software and platforms for cloud, end user and mobile computing; (viii) changes to product development timelines; (x) VMware’s relationship with EMC Corporation and EMC’s ability to control matters requiring stockholder approval, including the election of VMware’s board members; (ix) our ability to protect our proprietary technology; and (x) our ability to attract and retain highly qualified employees. These forward-looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that we may file from time to time, which could cause actual results to vary from expectations. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.
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