The panel, which included IBM and Microsoft, hashed out what needs to be done to grow the adoption of data center virtualization beyond the 1% per annum rate cited by Virtual Iron Software Inc.

We are at an open-source conference and I think we need to be open-sourcing some of our practices, and sharing some of our best practices, said panelist Jim Fister, a lead technology strategist at Intel. I think that’s going to be a much greater benefit than frankly anything we can do.

After all, most performance problems with virtualization occur between the chair and the console, he said.

To boost adoption, the industry must shift the user mindset away from thinking of virtualization for consolidation only toward other benefits, such as energy savings, service-oriented architecture and greater migration, Fister said. Also, by consolidating legacy servers onto a single server, virtualization frees up other servers for innovation, he added.

As soon as we can figure out how to move people that way, we will see more virtualization, he said.

IBM’s director of virtualization marketing Kevin Leahy said the automation of the set-up is really what frees up the resources for innovation. Consolidation is the starting point but the real value is improving business resilience … it provides a compelling reason for enterprises to move to virtualization, Leahy said.

Virtualization has stalled in the marketplace because many customers began with 100 physical machines and ended up with 400 virtual machines, which made their jobs more difficult, Leahy noted.

Typically, if companies have 10 or fewer virtual machines on a single server the performance is good, he said. Beyond that, performance issues kick in, often because of caching limitations, Leahy said.

Microsoft senior director of virtualization strategy Mike Neil agreed with an audience comment that ISV support in the virtualization industry is going to be a big issue for customers.

However, he said several factors that will spur greater adoption of the technology are just now making it to market. They include 64-bit hardware technology, the falling price of highly available servers and the commoditization of the virtualization layer, he said.

The panelists agreed hypervisors were rapidly becoming commodity and that management is the next frontier for virtualization.

Really, the next step is management technology, which will enable customers to virtualize their data centers, Neil said. We’re really at the cusp of it … most servers in the next five years will ship with virtualization technology.

He also noted that while having multiple operating systems images enables greater agility, because an administrator can set up a new virtual server image within two hours rather than wait two weeks for a new piece of hardware, it also demands more maintenance.

The double edge sword is you have this proliferation of images and you don’t have the management tools to handle that, Neil said. That layer of management is just evolving everyone here would agree with that.

Leahy said a management layer would also tie the technology to business processes and enabling the data center to respond to business needs.

Neil said a management layer also would enable companies to pool their resources and treat them somewhat agnostically.

However, the need for administrators’ complete control over their data center is more significant than this admin layer, he said. The summary from one administrator was, I want to wake up in the morning and know where my servers are, Neil said. But administrators need to let go of that control and trust the infrastructure to do the right thing, he said.

Neil and Leahy agreed standards were needed in the management tool layer.

The performance of data center virtualization has become more robust now that hardware vendors are shipping virtualization capabilities baked into their products and software has been designed to take advantage of such hardware, noted Virtual Iron CTO and founder Alex Vasilevsky.

And the advent of new hypervisor technologies is providing the next level of scalability in the data center, Neil said.

Also, 10-gig Ethernet, along with storage virtualization, makes it more practical to be able to move virtual machines around, he said.