When it comes to the impact of storage on virtualization projects, IT administrators are more concerned about performance issues and less about cost than they were a year ago, according to a "2012 State of the Private Cloud Survey" by DataCore Software, the industry's premier provider of storage virtualization software.

DataCore's survey, which polled 289 IT administrators worldwide, revealed that 63 percent of respondents consider system downtime and slow application performance to be their primary storage-related virtualization concerns, up from 36 percent in 2011. IT admins still consider the rising cost of storage to be a problem with virtualization initiatives, but overall it is declining as a major concern, with just over half (51 percent) describing increasing storage costs as one of their biggest problems (down from 66 percent in 2011).

While increasing storage costs may be less of an issue than last year, storage-related costs continue to comprise a significant portion of virtualization budgets, with 44 percent of respondents saying that storage costs represent more than a quarter of their total budget for virtualization. Many companies are allocating more money for storage, with 37 percent saying their storage budgets have increased this year, while just 13 percent say they have been cut.

Additional findings from the DataCore survey of 289 IT organizations worldwide:

-- More than one in three respondents (34 percent) admit they underestimated the impact server/desktop virtualization would have on their storage costs. For those deploying a private cloud, more than one in four (28 percent) underestimated how storage costs would be affected.

-- Throwing more money at storage has not reduced performance concerns for companies that have embraced server and desktop virtualization. Even with an increase in the average storage budget, more companies reported significant problems with storage-related performance, bottlenecks, downtimes, and business continuity in 2012.

-- 32 percent reported that their storage infrastructure slowed application performance this year (up from 26 percent in 2011), 32 percent said they have experienced downtime due to storage-related problems (9 percent said virtualization decreased application availability last year), and 23 percent said that ensuring business continuity has become a more difficult challenge.

-- 80 percent of companies say they have virtualized more than 50 percent of their servers, up from 64 percent in 2011. Less than 5 percent say they haven't virtualized any servers at all, compared to 9 percent of companies in 2011.

-- Almost two-thirds (65 percent) of respondents report that they are not able to manage their storage resources in a single, logical storage pool (up from 61 percent from last year).

-- One in two respondents still uses virtualization software that cannot control different types of storage devices.

-- Among those with private clouds, less than one-third (32 percent) of respondents report that they haven't begun using storage virtualization technology in their private cloud environments.

"DataCore's 2012 State of the Private Cloud survey shows that as virtualization moves from theory to practice, storage-related performance and availability are becoming of greater concern to businesses, but cost concerns haven't gone away," said George Teixeira, president and CEO of DataCore Software.

"The use of a storage hypervisor ensures high performance and availability in the storage infrastructure through features such as auto-tiering, device interchangeability, thin provisioning, and continuous data protection," continued Teixeira. "A storage hypervisor solves the cost issue by enabling enterprises to make greater use of existing storage infrastructure, while dramatically reducing the need for large-scale storage hardware upgrades."

A Perfect Storm of Possibilities for Storage Virtualization

According to Mark Peters, senior analyst, Enterprise Strategy Group, "If the DataCore survey shows anything, it's that the time is ripe for storage virtualization, both to meet the business objectives associated with virtualization projects and to reduce the risks associated with those initiatives. More companies are virtualizing more servers than ever before, but a notable faction of users -- about a third -- are underestimating the storage costs associated with server and desktop virtualization projects as well as the storage costs associated with private clouds.

"Rather than simply continuing to expand traditional storage solutions, IT managers would be well advised to consider addressing performance and downtime issues with a storage virtualization solution that enables them to apply a simplified management approach to manage their storage resources in a single, logical storage pool. For the respondents in DataCore's survey -- and others -- who are not using storage virtualization, I would say that logic, availability, and need are all aligned to say it's time to take a serious look."

The online survey of 289 businesses worldwide was conducted in March 2012. The survey asked a series of questions about virtualization and its impact on storage.