At Credit Suisse, Sanzone will remove more than 2,500 of the company’s servers (which total more than 20,000) by year’s end. In the development environment, he’s been able to realize a 20-to-1 ratio for consolidating servers, meaning he consolidated 20 physical servers onto one new server. He’s also upped utilization rates on those servers from some as low as 7 percent up to 40 percent.

In turn, he expects to save millions on reductions in maintenance, hardware capital, networking, migration, real estate, and data center power and cooling costs. Credit Suisse is on track to reduce its data center power consumption by 1 megawatt by year’s end—all courtesy of virtualization. (Recent virtualization research from Aberdeen Group shows that 83 percent of “best in class” companies have increased their server utilization rates, 57 percent have decreased capital costs, and 52 percent have reduced staffing overhead.

David Siles, who is CTO of the Kane County government in Illinois, has realized massive savings since he started virtualizing in 2005. Those savings have come from a 30-to-1 utilization ratio, the elimination of 110 servers and licensing fees (more than $100,000); server renewal costs that he avoided ($370,000); and power and HVAC savings (nearly $300,000). Siles says that virtualization has not only become a strategic piece of Kane County’s infrastructure but, thanks to annual budget cuts, it is how he’s been able to provide “the same level of services to the county with less money.”

In fact, if CIOs haven’t virtualized at least a part of their server populations by now, they are woefully behind the curve. When Arch Coal CIO Michael Abbene began investigating virtualization products in 2006, “I tried to get a sense of who else was doing it,” he recalls. “It turned out to be everybody.”

According to IDC, 75 percent of companies with 1,000 or more employees are employing virtualization today. And more than half of the respondents to the Aberdeen Group survey on virtualization were using it in their production environments (meaning, everyday user applications), “a clear sign that end users trust that the technology is mature enough for mission-critical systems.”

Data center consolidation is a critical first step toward unlocking virtualization’s potential because it demonstrates to the business that IT can run more cost-effectively—slashing server costs plus tackling expensive power, cooling and real estate expenses. IDC says enterprises spend 50 cents to power and cool servers for every one dollar in server spending today (that number will increase to 70 cents by 2010), and new data center costs run $1,000 per square foot. Abbene says that consolidation has enabled him to defer a major data center upgrade that would have cost him around $400,000.