Virtualization is a popular buzzword around enterprise circles these days. Many enterprise and SMB entities are embracing virtualization in an effort to reduce costs and streamline their operations.

Now, according to Veeam Software, the penetration rate for virtualization in enterprise environments is 39.4 percent, meaning that nearly 40 percent of all physical servers within an organization are virtualized. However, Veeam Software found that nearly 92 percent of all enterprises use at least some form of virtualization. 

Also noteworthy is the fact that average consolidation ratio for enterprise customers is six virtual servers per host.

Not surprisingly, when it comes to the actual hypervisors used by enterprises, VMware is the leader with 84 percent adoption. Microsoft Hyper-V and Citrix Xen are used in 61 percent and 53 percent respectively of enterprises.

“While the results show that virtualization has become a standard technology in most enterprises, it is clear that there is still room for increased penetration. We would expect to see consolidation ratios increase over time as organizations look to magnify the ROI they get from virtualization,” said Ratmir Timashev, President and CEO of Veeam. “As the significant cost, power and efficiency benefits of virtualization accelerate its position within the enterprise, so the potential of all IT infrastructures to be based on virtual estates increases."

The increased use of virtualization across the board led to a huge Q2 for VMware. The company yesterday reported year-over-year revenue growth of 37 percent while EPS growth came in at 183 percent. Overall revenue and net income came in at $921 million ($465 million in license revenue, $456 million in services revenues) and $220 million respectively for Q2.

Microsoft's earnings report is due to come out tomorrow, so we'll have to wait until then to see how Hyper-V is doing for the software giant. However, all signs point to it making significant gains in the marketplace. VMware’s new licensing model for vSphere 5 could also drive more customers to Hyper-V in the future. 

Microsoft is also looking to pack in a next generation version of Hyper-V into Windows 8 Server reports Paul Thurrott.

But as virtualization adoption increases, so does this need for more robust security procedures for enterprise customers. The New Mexico Human Services Department is nearly 100 percent virtualized according to PC World, and has taken a multi-tiered approach to virtualization security following a recent security breach. The department added two-factor authentication, installed HyTrust, and now uses the Juniper vGW Series firewall to fight off unwanted intrusions into its network.