Banks Adopting a Wide Variety of Virtualization Technologies to Centralize Deployment and Save Energy, Reports Microsoft Survey

Application, presentation, network and machine virtualization used at banks in U.S. and U.K.


REDMOND, Wash. — April 2008 — Banking institutions in the United States and United Kingdom are using a number of virtualization technologies as a means to help centralize deployment and management of applications, simplify IT infrastructure, and improve overall business continuity of IT systems, reports a new survey released today by Microsoft Corp.

Microsoft’s “Virtualization in Banking Survey 2008,” conducted by independent, Washington, D.C.-based research firm KRC Research, shows that the majority (58 percent) of large, tier-one banks are already implementing virtualization across multiple aspects of their IT infrastructures, including application (61 percent), networking (54 percent), machine operating systems (48 percent) and presentation (27 percent).

A form of technology around since the 1960s, virtualization is the act of isolating or unbinding one computing resource from another. Although virtualization is commonly thought of as occurring within datacenters and servers, virtualization technologies are being applied across multiple aspects of a bank’s IT infrastructure, including presentation, application, operating system, storage and network.

“Banks realize the impact virtualization can have on operations, from the data center to the desktop, and how it should be embraced as part of an enterprisewide infrastructure strategy,” said Rich Feldmann, managing director of the U.S. Financial Services Group at Microsoft. “Virtualization helps create the foundation for innovative banking applications and channels by producing an agile infrastructure. While banks are known as early adopters of technology, this survey indicates that more than one-third are still on the sidelines waiting for greater value and ease of use before adopting.”

The survey was conducted in February 2008 and includes responses from 100 technology decision-makers in the United States and United Kingdom with IT management responsibilities over a region or at the enterprise level for retail banks with assets of more than $25 billion. Key findings included these:
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Fifty-three percent of those implementing virtualization reported that it makes it easier to centralize deployment and manage applications, and an equal number reported that it produces cost savings — while 51 percent reported that virtualization makes it easier to respond to issues such as failures of applications or systems.
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Saving space (46 percent), making it easier to provide security (46 percent) and saving energy (34 percent) also ranked as significant drivers for the technology.
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Among those who are currently using virtualization, 95 percent use it in regional or national headquarters, such as in data centers, while 53 percent use it within branch offices; nearly one-third (32 percent) of those who are planning to use virtualization say they will definitely or probably use it in branches.
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The most frequently mentioned type of branch where virtualization has been deployed is community branches (82 percent), followed by premium or showcase branches (31 percent), co-located branches such as those within stores (28 percent), and branches-in-a-box (13 percent), such as mobile branches used on college campuses and for events.

The wide variety of virtualization reported in the survey may be a direct result of increasing market pressure on banks to reduce costs, innovate and manage IT resources more centrally. For today’s major retail bank, machine operating system virtualization is becoming a foundation for a dynamic and responsive data center; application virtualization is changing how banks manage line-of-business software applications; desktop virtualization is empowering workers by enabling them to run multiple operating systems on a single desktop; and presentation virtualization allows bank employees to seamlessly execute an application from a remote computer.

“Virtualization helps make more effective use of existing hardware investments and significantly improve IT agility,” said Kathleen Khirallah, managing director and practice leader, Global Banking, TowerGroup. “These emerging technologies are helping today’s bank compete more effectively in an ever-changing market by helping people anticipate and respond to business challenges and opportunities rapidly and effectively.”