Technology: A Virtual(ization) Resurgence
Demand for slicker server software could prove big boost for local tech firms
Two thousand eight will probably be the year that even tech outsiders start using the term "virtualization."
The technology - which allows companies to re-order and better harness the unused and underused computing power of their servers - gained a big buzz early this summer when Palo Alto, Calif.-based VMware raised $1.1 billion in an IPO: good news for Hopkinton-based EMC Corp., which became the majority owner of the company a year earlier.
In one way, VMware, the world's largest provider of virtualization software, is already the company that pulled EMC out of the doldrums. Now, the tech surprise of the year could represent the leading edge of a technology boom that could give a big jolt to the Central Massachusetts tech sector.
It couldn't come at a better time; the first quarter of 2007 was tough on tech. Forrester Research said the sector took a 2.6 percent dip, marking what was then the first decline in a year. Growth since then has been lackluster, and the promise of virtualization is one that carries big bucks.
Research firm IDC predicts that spending on virtualization technology will surpass $15 billion worldwide in three years. More than double what it was in 2006.
And competitors and colleagues scattered throughout the region have big expectation for the technology in 2008. That's because the area is home to a number of other smaller companies that also specialize in virtualization technology.
"If you look at 2007, virtualization really started to get on people's radar screens, and some of that has to do with VMware," said Susan Davis, vice president of Marlborough-based virtualization firm Egenera. "But what has really been driving it is the recognition by everything from developers to large corporations that computing has become incredibly inefficient and this is a way to change that."
A number of other companies are already integrating virtualization technology into their products. Framingham-based server firm Netezza, for example, uses the technology in some of its products. Scali Inc. in Marlborough specializes in a form of virtualization known as clustering.
"Certainly from the vendor landscape there are more and more companies using it for a myriad of issues," Davis said. "And from a customer's perspective it represents a lot of opportunity where the technology can address a lot of problems they face."
The virtualization movement - and the growth enjoyed by companies specializing in it, builds on the recent successes of other MetroWest-area companies with products specialized in re-tasking the ways large organizations use data.
The other bright star on the map: eClinicalWorks, the Westborough-based maker of electronic health record systems used by hospitals and doctors offices all over the country. That company is also expecting another bellwether year; it recently opened its New York City office, solidifying its expansion in the state where it signed a $19.8 million deal with the city's health department, setting the stage for an even bigger expansion of one the nation's fastest growing technology companies.
Mixed Disciplines
Pat Larkin, director of the John Adams Innovation Institute, part of the Westborough-based Massachusetts Technology Collaborative, said the potential for virtualization is part of a larger boom in software and other technology that he expects to grow in Massachusetts in 2008.
Fueling that growth, Larkin said, is the unique skill set of the Massachusetts workforce and the mix of industries they employ.
"This will be a big year when you're going to see relationships build between sectors and institution where they are really converging on breakthroughs that have traditionally been reserved for research work," he said.
Major awards programs that are designed to move technology out of the lab and into the market are already drawing the interest of Massachusetts companies with interests in both life sciences and computers.
Another effort, based partially at Woods Hole Oceanographic Institute, would develop new technologies to explore the oceans, relying on new computer-based and other technologies that will open new markets for Massachusetts tech firms.
Even more traditionally fringe technologies, like fuel cells and renewable energy, could make big strides in 2008. The clean energy industry, for instance, is on pace to replace textiles as the 10th-largest sector of the Bay State's economy ranked by employees.
And collaboration on research with biotechnology firms will also be a big draw for the Central Massachusetts tech sector in 2008, Larkin predicted.
"We are actually involved in a project with the X-PRIZE foundation - which is offering a $10 million prize to the first group that can map the genome of 100 individuals in 10 days. The first map of a human took 10 years. That would be a huge breakthrough," he said.
Kenneth J. St. Onge is a freelance writer based in Connecticut and Worcester native.
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