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Virtualisation to help businesses in Singapore save S$4.38B by 2020

Nurdianah Md Nur | Aug. 15, 2013
With server virtualisation, businesses can expect to spend less on additional physical servers, power and cooling, floor space and server admin.

Cost savings is always highlighted as a benefit of server virtualisation but how much savings are we talking about? Based on IDC's Server Economies Index, S$4.38 billion (US$3.65 billion) worth of spending is expected to be avoided in Singapore from 2003 to 2020 due to the impact of server virtualisation.

The IDC Server Economies Index is part of IDC's Vision 2020: Virtualization's Potential US$98 Billion Impact whitepaper which was commissioned by VMware. The whitepaper demonstrates the impact of server virtualisation in monetary savings (based on a hypothetical modeled data in Asia) across four key cost areas over the past decade and looks forward through 2020.

Savings from key cost areas
Matt Hardman, product and solutions marketing manager, ASEAN & India at VMware, said server virtualisation can help businesses in Singapore to save costs from four key areas: server spending, power and cooling, floor space rental and server administration costs.

With virtualisation, fewer physical servers will be purchased in 2020 as compared to a situation where virtualisation does not exist. Companies in Singapore can avoid spending S$2.38 billion (US$1.98 billion) on physical servers, according to the Server Economies Index. This amount is equivalent to four and half years of S$100 GST vouchers that could be handed out to all Singaporeans, said Hardman.

Less power consumption and cooling technology is also needed with less physical servers[1]. Thus, IDC expects S$624 million (US$520 million) in power and cooling costs to be avoided with virtualisation. As an illustration, Hardman said this savings could be used to power the Punggol area for about 16 months.

Punggol power savings
Savings from power and cooling costs due to virtualisation could power the entire Punggol area (shown above) for 1.4 years. Photo courtesy of VMware.

As virtualisation reduces the space needed for physical servers, S$60 million (US$50 million) in floor space costs can be saved. Based on an average office rental in a grade A suburban area, the space saved is equivalent to about 58 Flower Domes at Gardens By the Bay, said Hardman.

Flower Dome at Gardens by the Bay
Without server virtualisation, the space occupied by aboout 58 flower domes (shown above) will be needed to house physical servers to accomodate the needs of businesses in Singapore. Photo courtesy of VMware.

Server virtualisation also impacts administration costs. IDC predicts that S$1.32 billion (US$1.1 billion) in server admin costs can be avoided with virtualisation. The admin costs include server admin costs as well as the cost of people and overheads needed to manage each physical server.

Nicholas Tan, country manager at VMware Singapore, said: "Every dollar in cost saving allows for companies to re-invest in another key area for them to innovate and increase their productivity and competitiveness in the local landscape to realise the synthesis of technology and IT infrastructure."


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