Servers Go Front and Center

To a lesser extent, energy efficiency is also driving server purchasing decisions. "Our watts per square foot are four or five times what they were a few years back," and the cost of power has become "very significant" for engineering applications, says Hillman.

For data centers that can't bring in more power, virtualization is delivering power savings. An application running on an old 400-watt server can be consolidated onto a physical server that may consume half the power, and that application could use just 10% of the new machine's resources if it runs within a virtual machine on that server, says Staten.

"Whenever we do server bake-offs, [energy efficiency] is a question that comes up," says Smith. The bank plans to have a program for data center efficiency in place early this year. Often, however, power is a secondary consideration. "We don't buy something based on its power," but it makes sense to use virtualization to cut power consumption and carbon output, Hull says.

Some organizations are using server virtualization technology for more than just consolidation. Sean Wieland, technology officer at The Henry J. Kaiser Family Foundation, plans to use virtualization this year for business continuity. He says that his organization plans to replicate virtual machine instances of Exchange Server, SharePoint, SQL Server and other key applications in its Menlo Park, Calif., and Washington offices and mirror the data between sites in "almost real time."

The nonprofit expects to install new, redundant servers in both locations that will allow full recovery within minutes of a failure. "That's better than being a couple of days off," says Wieland, referring to the performance of his current tape backup systems.

Despite the advances, IT executives say there's one thing that's still missing: mature cross-platform management tools. "I would like the ability to manage multiple platforms via a single tool that allows me to see the whole environment versus islands of servers," says Hull. "That's pretty important if you have thousands of servers."

Smith sees consolidating server infrastructures as a precursor to full-blown utility computing. "You're starting to see capabilities that have existed in the mainframe world for years," he says. But those services - in areas such as priority queuing, resource management and security - still aren't mature, says Hull. His advice to server vendors in 2008: "Get more mainframelike."

Forecast 2008: IT Trends & Predictions for the New Year

How'd we do in '07?  See last year's Forecast 2007.