Cost Savings and IT Space Constraints Top Reasons Why Retailers Adopting Virtualization, Reports Microsoft Survey

REDMOND, Wash. — April 29, 2008 — Close to three-quarters (71 percent) of U.S. retailers are turning to a broad set of virtualization solutions as a means to save costs, maximize space and generally gain better control of their IT infrastructures, reports a new survey released today by Microsoft Corp.

Microsoft’s “Virtualization in Retail Survey 2008,” conducted by independent Washington, D.C.-based research firm KRC Research, found that nearly half of the participating retailers (49 percent) are employing one form of virtualization within their store locations based on cost savings, while 46 percent are seeking to better respond to issues and failures of applications and systems, and 43 percent chose virtualization solutions to help them save space.

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 retail company’s IT infrastructure, including presentation, application, operating system, storage and network.

“Decades of installing servers, operating systems, applications, middleware and databases have taken their toll, as retailers are nearing their limits for physical space, power usage and cooling,” said Geoff Thomas, general manager of Microsoft’s U.S. Retail and Hospitality Group. “For a chain with 1,000 stores or more, adding just one more server or application per store is a significant investment. That is why virtualization is an attractive alternative, as more than 50 percent of retailers surveyed had between three and 10 servers in each of their stores already.”

Microsoft’s “Virtualization in Retail Survey 2008” was conducted in February and March 2008 and includes responses from 205 technology decision-makers at U.S. retail companies with annual revenues of $250 million or more who have IT management responsibilities for store locations or regional or national headquarters. Key findings included the following:

  • Seventy-one percent of the retail companies surveyed are using virtualization technologies to isolate applications, data, operating system instances or transaction services in their stores or headquarters.

  • Thirty-five percent of survey respondents cited using virtualization technology to make it easier to centralize deployment and ongoing management of applications. This ease of deployment is critical in today’s complex and competitive environments as retailers are striving to quickly use real-time information in such emerging store technologies as kiosks, self-service checkouts, mobile handheld devices, electronic signage and even computerized shopping carts.

  • Thirty-one percent pointed to energy savings as driving their purchase of virtualization technology. The rising awareness of “green” energy initiatives, as well as the increasing power required to run and cool data centers, likely factored into this response.

  • Thirty-eight percent of survey respondents cited the need to provide centralized security as a driver toward implementing virtualization within its stores or remote locations.

  • Among the 29 percent of retail respondents who are not using virtualization to isolate operating system instances, applications, data or transaction services, one-quarter (25 percent) say their company is considering it. Among those not considering implementing virtualization technologies, more than half say the main reason is cost (51 percent).

“Retailers are interested in new store technologies that support a differentiated customer experience to drive sales and competitive advantage,” Thomas said. “This is ultimately driven by better integration and optimization of their back-office infrastructures. This survey shows that the same drive retailers have for maximizing every square foot of store selling space is carrying over into their IT centers as they increasingly look to virtualization to gain greater economic and infrastructure advantages.”

About Microsoft’s Virtualization in Retail Survey 2008

Microsoft’s “Virtualization in Retail Survey 2008” was conducted via telephone by Washington, D.C.-based KRC Research from Feb. 21 to March 10, 2008, and included responses from 205 interviews in the United States with technology decision-makers who have IT management responsibilities for store locations or regional or national headquarters for retail companies with annual revenues of $250 million or more. Full survey results are available at http://www.microsoft.com/presspass/events/msretail.

About Microsoft Virtualization Solutions

Microsoft provides a broad set of virtualization solutions for small, midmarket and large customers to virtualize desktops, consolidate servers in the datacenter and establish more cost-effective business continuity plans via virtualization. Customers can optimize their desktop infrastructure with Microsoft software, allowing them to unbind different computing resources, virtualize desktops or applications, streamline deployments, centralize management, and ease application compatibility issues. Microsoft offers infrastructure virtualization software as part of the Windows platform, such as Microsoft Hyper-V and Terminal Services available within Windows Server 2008, along with a comprehensive management platform, Microsoft System Center, to manage both virtual and physical infrastructure and applications. More information is available at http://www.microsoft.com/virtualization.

About Microsoft in Retail

Microsoft’s U.S. Retail Industry Group provides software that helps empower retail’s biggest assets — its people — to make better decisions at every stage of the value chain. Microsoft software helps enable retail employees to strengthen customer relationships, build high-value business connections and improve operations by addressing key areas such as store systems, real-time analytics and supply chain management. Through a combination of Microsoft- and partner-provided solutions, retail customers enable their employees to deliver an outstanding customer experience across various channels by turning data into insight, transforming ideas into action and turning change into opportunity. More information about Microsoft’s work in the Retail industry can be found at http://www.microsoft.com/retail.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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