Wall Street Expanding Virtual Horizons
April 7, 2008
Virtualization, in one form or another, has been around almost as long as computers. When the term arose in the 1960s, it referred to the partitioning of mainframe computers. But virtualization soon became a way to let people stop worrying about the inner workings of their hardware.
In the earliest days, to put something in a computer's memory you needed to know the physical location of every byte of storage. Then virtualization tools came along. Instead of deciding to store data in location #84AF, a user could enter a command--LET NAME$= "John Smith"--and allow the compiler to decide where NAME$ would be stored. Shortly after, disk operating systems were invented: Users could assign file names to programs and data; the operating system figured out where to put them.
Without an OS, you would have to manually track files' locations, not to mention be sure to leave plenty of room between them--if you add data a file takes up more space, and without sufficient headroom other files would have to be rearranged. Today, information technology departments face a similar challenge, only on a much larger scale.
IT teams have to decide which servers will run which applications, and which devices will store which data. And they have to keep track of what goes where and be ready to shift things around if a server goes down or a hard drive breaks, or a database or application gets too large.
Ideally, virtualization eliminates the distinctions between all the hardware a company owns and keeps track of what goes where. Human operators simply make sure the total amount of available space is adequate.
Storage virtualization effectively turns multiple storage units into a single device, with the software placing files and ensuring effective use of space. A hardware virtualization platform does the same for servers, deciding which application goes where, usually by creating virtual machines for each individual piece of software to run on, then moving them between servers as needed.
Even networks can be virtualized, building virtual private channels on top of the existing infrastructure--to isolate different kinds of traffic, for example.
Various types of virtualization technology are in use on Wall Street, says Daniel Kusnetzky, president of Osprey, Fla.-based research firm Kusnetzky Group. "And examples of this type of technology have been in use for well over 30 years."
Today's virtualization technology is increasingly sophisticated. "Virtual processing software makes it possible to achieve one of several goals for all processing on a system, including higher levels of performance, higher levels of scalability, higher levels of reliability, consolidation, improved levels of agility of applications and even isolating applications from one another, giving the organization better control," says Kusnetzky. "There are also ways to improve network and storage performance that are equally important."
And these options, relatively new for Wall Street firms, are becoming more and more important.
According to research firm Gartner, virtualization will be the most important tool in technology infrastructure and operations through 2010 and will dramatically change the way IT departments work. At year-end 2006 there were over half a million virtual machines running in corporate back offices; by 2009 there will be more than 4 million, estimates Gartner.
At a conference in Sydney last year, Gartner VP Thomas Bittman predicted that virtual machine hypervisor technology will be nearly free by the end of 2008, embedded into hardware by manufacturers, and into operating systems by software vendors. "It is now less about the technology and more about process change and cultural change within organizations," said Bittman.
