Virtualisation has yet to become a significant issue for Irish companies despite the massive valuations being attracted by virtualisation software companies, writes John Collins.

Last month, application delivery specialists Citrix announced it would pay $500 million (€366 million) to acquire another virtualisation player, Xensource. The news came in the same week that VMware's IPO broke records in New York.

Representatives of those two companies believes the situation here is set to change rapidly.

"Virtualisation projects are now on the desks of people with budgets," says Colm O'Neill, country manager for EMC, VMware's parent company. "People have realised this has the capability to take significant costs out of their business."

Virtualisation enables computers to be used much more efficiently by several programmes or users at the same time.

Francis O'Haire, technical director of Data Solutions which distributes both Citrix and Xensource products in Ireland, says the deal is likely to see Xensource technology much more widely deployed in Ireland.

Although he credits VMware with educating the market to the potential of virtualisation, he points out that because it grew out of an open source project in Cambridge University, Xensource can provide the same functionality for less than half the price.

"I'm not sure that a lot of companies think virtualisation is suitable for themselves," says Mr O'Haire. "Due to the cost they think it is just geared towards large companies and data centres, but that's changing."

According to Mr O'Neill a large telco which he met earlier this year said it costs them €3,500 annually to power and cool each of their servers. "On that basis the cost case for virtualisation is compelling," he says.