Gartner is estimating that one out of every four server workloads will be virtualized by the end of this year. However, the research firm argues that enterprises should invest more in the approach if they want to maximize the return they are getting on their IT dollars.

"More than 80 percent of enterprises now have a virtualization program or project, but only 25 percent of all server workloads will be in a virtual machine (VM) by year-end 2010," Gartner reports. Virtualization, the firm adds, is "the highest-impact issue challenging infrastructure and operations."

Virtualization was first introduced decades ago as a means of managing mainframe technology. More recently, it was adopted as a means of enhancing the usage of x86 servers, which comprise 90% of the server market overall.

Now, server virtualization is actively employed throughout the Fortune 500. IT executives consider it a huge win because they can drive server utilization rates from as low as 10% to as high as 70-80% — producing huge savings in the process.

However, some companies remain reluctant to plunge into server virtualization. They cite security concerns, performance issues and software licensing complications among the issues holding them back from embracing virtualization technology.

Despite these concerns, some research firms remain bullish on the technology's adoption. One firm, The InfoPro, reports that more than half of newly deployed servers are virtual machines and predicts this number will climb to 80% by 2012.

That said, the implication of Gartner's prediction — covering "only" one-quarter of server workloads — is that three-quarters of workloads on physical machines have not been virtualized.

This raises some questions about whether executives are investing their IT dollars as smartly as they might. In fact, Gartner argues that eight of every ten dollars that enterprises spend on IT can be considered "dead money" because it does not contribute directly to business value.

“We say ‘dead money’ because, while it is keeping the lights on, it isn’t directly contributing to your business growth or enhancing your competitive advantage,” says Daryl Plummer, managing vice president and Gartner Fellow. “In today’s environment, any corporate function that doesn’t contribute to growth or competitiveness is ultimately expendable. Your placement of resources is more critical than ever to your ability to deliver the growth and competitive advantage that your CEO is expecting.”

Gartner is estimating that one out of every four server workloads will be virtualized by the end of this year. However, the research firm argues that enterprises should invest more in the approach if they want to maximize the return they are getting on their IT dollars.

"More than 80 percent of enterprises now have a virtualization program or project, but only 25 percent of all server workloads will be in a virtual machine (VM) by year-end 2010," Gartner reports. Virtualization, the firm adds, is "the highest-impact issue challenging infrastructure and operations."

Virtualization was first introduced decades ago as a means of managing mainframe technology. More recently, it was adopted as a means of enhancing the usage of x86 servers, which comprise 90% of the server market overall.

Now, server virtualization is actively employed throughout the Fortune 500. IT executives consider it a huge win because they can drive server utilization rates from as low as 10% to as high as 70-80% — producing huge savings in the process.

However, some companies remain reluctant to plunge into server virtualization. They cite security concerns, performance issues and software licensing complications among the issues holding them back from embracing virtualization technology.

Despite these concerns, some research firms remain bullish on the technology's adoption. One firm, The InfoPro, reports that more than half of newly deployed servers are virtual machines and predicts this number will climb to 80% by 2012.

That said, the implication of Gartner's prediction — covering "only" one-quarter of server workloads — is that three-quarters of workloads on physical machines have not been virtualized.

This raises some questions about whether executives are investing their IT dollars as smartly as they might. In fact, Gartner argues that eight of every ten dollars that enterprises spend on IT can be considered "dead money" because it does not contribute directly to business value.

“We say ‘dead money’ because, while it is keeping the lights on, it isn’t directly contributing to your business growth or enhancing your competitive advantage,” says Daryl Plummer, managing vice president and Gartner Fellow. “In today’s environment, any corporate function that doesn’t contribute to growth or competitiveness is ultimately expendable. Your placement of resources is more critical than ever to your ability to deliver the growth and competitive advantage that your CEO is expecting.”