Can the SMB Afford Virtualization?

There has been quite a bit of debate about SMB virtualization and what vendors think they need. However, no one has really looked into whether or not the SMB market can afford virtualization. There is quite a bit of noise that states that the SMB wants everything for free, or that they will receive immediate benefits from virtualization, but can they actually afford it?

From an affordability perspective there are several costs involved:

  • Training
  • Consultation
  • Storage Hardware
  • Host Hardware
  • Virtualization Software (Hyper-V, VMware, XenServer, KVM, etc.)
  • Process Changes
  • Backup Software and possibly hardware

The list is pretty endless actually, and each one of these needs to be considered before an SMB will adopt virtualization. The key however, is can a SMB even afford the hardware on top of which they will want to run virtual machines? Virtualization hosts often require lots of memory (16-32GBs usually), multi-core processors (for example 2 Quad Core processors), Fast and Numerous Gigabit Network adapters, and maybe even dedicated Storage Adapters, etc. These servers can range in price from $5,000 to $15,000 depending on vendor, options, etc. Even if an SMB attempts to build a whitebox (Self Build from components) it will generally end up costing around $3,000-$5,000 but you then lose the supportability benefit of utilizing Hardware from the vendors HCL. Further, for redundancy at least 2 servers are required, so now we are talking from $6,000 to $30,000.

The Cost of hardware is often quoted as a reason why people move towards virtualization as a way to perform a Technology refresh. For an SMB this is even more crucial as the budgets are not as high as for Enterprise customers. This is an area where every penny counts.

An SMB has some tough choices to make and whether they are made depends entirely on the system administrators within the organization.  Some feel quite comfortable using a white box setup, which may be less expensive. But in this case support is often an issue and support for your virtualization layer is very important. If you cannot get support from the hypervisor vendor you may be looking at consultants to fill the gap.

If the SMB wants redundancy, and this depends on the SMB, then storage costs could figure quite high as well. An inexpensive storage device that gives appropriate performance could cost anywhere from $3,000 to $15,000 depending on the features desired. The cheapest solution is once more a Whitebox with TBs of storage running one of the free storage server softwares such as OpenFiler, FreeNAS, or utilizing local storage with one of the free VSAs (Virtual Storage Appliance) like the XVS (Xtravirt Virtual Storage), etc.

After hardware the next cost to consider is virtualization software licensing costs. These costs will depend on the features required which for the SMB translates roughly into uptime requirements. If the SMB requires 24/7 uptime then some form of Live Migration would be required to alleviate downtime during maintenance periods. But if the SMB requires 9-5/5, then there is time to do maintenance after hours as is traditional. Use of Live Migration could actually alleviate overtime costs with after hours maintenance. So that is one more consideration.

Many SMBs we have spoken to desire high availability while they are in the office and for any systems that have 24/7 uptime requirements. But for most  cases it is unimportant to them after business hours. Regardless of timing, the need for high availability will add to the licensing costs. High Availability can be achieved using clustered virtual machines on multiple physical hosts (if the hypervisor supports this), or directly within the hypervisor (such as VMware High Availability). In either case, HA will add to storage costs as you now require some sort of shared storage device moving forward.

Process Changes

The only real process change that should be seen when using virtualization is how the VMs are actually created and not in how your servers have tradditionally been used. There is no need to change how the SMB undertakes their business processes. In essence, the users should not know they have been virtualized.

The sole exception to this is if you are virtualizing a users desktop, then there will need to be some in house training to alleviate any concerns and fears.

Backup Options

With Virtualization there are now several new backup options that can improve business continuity and disaster recovery, yet these new methods do not override or obsolete the existing traditional backup methods currently employed within an SMB. The traditional method generally implies placing a tape drive into one of the physical hosts or attaching a tape library to a physical host. The physical host would be used as a backup server. Backup servers can be virtualized but in general it is currently not recommended as the throughput is not as high as one would desire. However, for a low volume of VMs this is definitely an option. A low volume would be a set of VMs that could be backed up before work begins the next morning.


There are many consultants who say they can help you virtualize. Picking a good one is often an issue. Finding one is often difficult and could be an expensive mistake, so be sure to do your due diligence, remember in the land of the blind a one eyed man reigns supreme.  Recomendations on LinkedIN, Namyz, and other such sites are a boon.


There is one immediate gain that many an SMB will recur over the subsequent months after virtualization and that is power savings associated with running many servers within the virtualizaiton hosts. However, this is a cost that is more long term than immediate, as there are initial expenses associated with virtualizing within the SMB.


When picking a hypervisor there are several choices going forward and each have their benefits and weaknesses. If for example, you are uninterested in High Availability then you can use some of the free versions: VMware Server, VMware ESXi, Citrix XenServer, Free Xen, or KVM. If you already own Windows Server 2008, then you also have Hyper-V to try out and use. However, if you want more advanced functionality then you will have to start looking into spending more monies to make it happen, as there are now license costs associated with functionality and management tools for the hypervisors.


Is the savings over time worth virtualizing? We believe it is, but this needs to be considered as a part to your analysis.

Is it just too expensive? If you consider virtualization as part of your server refresh, your costs will be easier to handle.

Is one solution less expensive than another? That depends entirely on the number of hosts you want to virtualize and the expertise of your technical people.

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