Dell leads by virtual example

Michael Dell took to the stage at Oracle OpenWorld

Dell founder and chief executive Michael Dell told delegates at the Oracle OpenWorld 2009 conference in San Francisco how to drive out inefficiency from their businesses by going virtual.

Around half of Dell's servers are virtual, he said, with the hardware supplied by a mixture of vendors including Oracle, VMware and Microsoft.

By the end of the year Dell expects to have saved more than $50m (£31m) from going virtual, and more savings are expected to be achieved by 2010 and then year after year.

Dell claims to hold the fifth largest virtual server farm in the world following the start of a two-year project called Virtual First. The project aims to convert all of Dell's servers into virtual machines in order cut the firm's storage costs.

After describing his own company's cost savings from going virtual, Dell advised customers to do the same.

He said that only 31 per cent of his company's x86 servers in the marketplace are running virtual applications, and pushed customers to move more systems into a virtual environment. He argued that running virtual applications on the x86 machines would allow customers to reduce their IT costs by up to 15 per cent.

Dell claimed that following his advice would cut $200bn (£125bn) worth of inefficiencies from the world's total IT spend of $1.2 trillion £750bn). IT needs to reduce the average 80 per cent of funding used just keeping the lights on, and allow companies to spend more on strategic initiatives, he added.

"Imagine being able to relocate 60 per cent of your budget to innovation," he said.

Dell's other advice to customers included reducing the number of applications their business runs. "It is not about new tools but about doing more with existing tools," he said.