James Bourke

Virtualization Primer

Learn the high-level concepts of this technology process and why your firm should consider it.

November 22, 2010
by James Bourke, CPA.CITP


Virtualization is not a new concept. The original term can be traced back to the early 1960's where it originated from the term "virtual machine" and the experimental IBM M44/44X system.

Simply put, virtualization allows us to do more with less.

There are two primary areas of virtualization that impact a CPA firm:

  • server virtualization
  • desktop virtualization

Server Virtualization

The virtualization of servers within a CPA firm allows a firm to replace or consolidate multiple older servers with one or fewer more powerful servers. Although the physical server is virtualized, the operating system is not. The operating system, running on the server, simply sits embedded deep within the new server. The new physical sever now becomes a "box" that allows for the deployment of virtualization technology.

Once virtualization technology has been deployed, the server or "box" can now "host" multiple "guest" virtual machines.

There are countless benefits that can be derived by the CPA firm that makes the jump to server virtualization. Some of the benefits include:

  • Cash Flow — With multiple servers being consolidated into one or fewer servers, the result is usually a reduction in server spending. Since many firms have deferred spending on replacement servers over the past few years, as a result of the economic downturn, now may be a good time to replace for less.
  • Disaster Recovery — Server virtualization allows a firm to easily migrate or copy a virtual machine, from machine to machine. If planned correctly, this ease of portability allows a firm to easily become 100 percent functional in the event of a disaster or major disruption in service.
  • Flexibility — A virtualized server is more easily configured than one that is not. In addition, repairs to a virtualized server are also easily accomplished without causing any material amount of downtime.
  • Ease of Portability — A virtual machine can easily be replicated and migrated to a mobile device, such as a laptop. This ease of portability allows the end user to take the virtual machine with them, without the need for dependency on internet or vpn (virtual private network) connectivity.

When investing in a virtual server, don't go "light". A server that is expected to house and run multiple virtual servers, with varying operating systems, should have sufficient memory and system resources available to handle the increased load. Although one server may be a replacement for multiple, that one should be powerful.

From a CPA firm perspective, the historical rule-of-thumb was to utilize dedicated servers for applications that strained system resources. In a typical CPA firm, the dedication of specific servers for tax preparation, practice management, engagement management and client data was not uncommon. Today virtualization allows many of these applications to sit on the same machine, even if they are running on different operating systems or different versions of the same operating system. Saving the typical CPA firm thousands in hardware costs.

With the push to cloud-based or the SaaS model for many of the applications that we use, many firms are discovering that for the few applications and data that may still be housed within the firm, one virtualized server is more than sufficient to meet their needs.

Desktop Virtualization

Desktop virtualization follows the same theory as server virtualization, allowing for significantly more flexibility than can be achieved from one or more stand-alone desktop machines.

Desktop virtualization is sometimes referred to as "client virtualization." This platform takes an end-user's desktop platform and places it in a remote location. Once placed virtually at the remote location, the "virtual desktop" can now be accessed by other users or mobile devices such as laptops, smartphones and other mobile computing units. Virtualization of the desktop does not necessarily have to be dedicated to one user. In fact, an entire office of users could virtualize their desktops on a single machine, providing access, anywhere/anytime to the applications and data that in the past, was only accessible via physical access to the desktop.

From a CPA firm perspective, many staff still maintain customized desktops and have applications and data that reside on those desktops. In the past, one of the few ways to access such information was via a direct connection, assuming the desktop unit was physically powered on. Utilizing a virtualized desktop platform allows access to this information anywhere/anytime, so long as the machine upon which the virtual desktop or multiple desktops sits, has internet connectivity.

As with server virtualization, the benefits of desktop virtualization include a lower cost of deployment of new applications, reduced end-user downtime and controlled and secure access to desktop applications and data.

If you are about to spend dollars on the replacement of servers or desktops, virtualization is a model that should definitely be considered.

With Microsoft's presence and support for virtualization technologies, they have dedicated a website to help those interested to get a better understanding of this technology. Check out http://www.microsoft.com/virtualization/en/us/resources.aspx for additional information, including white papers and case studies on the many benefits of virtualization.

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James C. Bourke, CPA.CITP.CFF, is a partner at WithumSmith+Brown where he is director of Firm Technology. He is a past president of the New Jersey Society of CPAs and currently serves on AICPA Council and the Chair of the AICPA CITP Credential Committee. He has been named by Accounting Today as one of the Top 100 Most Influential People in the Profession.