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Jun 30 2026
Security

The Hidden Cost of Federal Virtualization — And What Agencies Can Do About It

As licensing fees climb and budgets tighten, HPE offers a STIG-compliant alternative at a fraction of the typical price.

Among federal IT leaders, there’s growing concern about virtualization: not the product, but the price.

Simulated virtual environments empower IT to run multiple isolated operating systems and applications simultaneously, maximizing the capacity of physical hardware. That is valuable in the federal space, but license costs have been going up, and many organizations are paying for features they never turn on.

“As a federal agency, when you’re being forced to pay for something that you’re not using, you’re probably going to look at other options,” says Sam Ceccola, senior distinguished technologist and Department of Defense CTO at HPE.

DISCOVER: HPE technology solutions can help you connect, protect and analyze your data.

Virtualization: There Are Other Options

For almost two decades, the virtualization market has been dominated by a single player. Now licensing changes, evolving mission needs and a desire for greater flexibility are pushing federal agencies to reassess their strategies.

“Other virtualization solutions exist out there, solutions that provide the capabilities that government agencies need, along with the security they require,” Ceccola says.

Basic virtualization simply means access to a hypervisor — a sort of digital landlord that divides up a machine’s CPU, memory and storage to multiple independent operating systems all living on the same hardware.

“Once I have that virtualization, then there are core features: Things like autoscaling, the ability to grow and shrink that virtual machine based on what performance capabilities it needs, along with the ability to move that virtual machine from one server to another,” Ceccola says.

When we look at the core capabilities, “there are a number of vendors out there that provide alternatives” suitable for federal agencies, he says, and it’s worth exploring the options as agencies seek greater flexibility.

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How HPE Helps

HPE brings to the table two fundamental technologies in support of federal virtualization: Morpheus Enterprise and the Linux-based hypervisor VME, or Virtual Machine Essentials.

“VME is based on Ubuntu Canonical Pro, and that’s important in federal, because it is the only Ubuntu edition that has a published Security Technical Implementation Guide (STIG) from the Defense Information Systems Agency,” he says. “That means DISA has determined this solution is hardened to provide security in the government environment.”

With VME as the hypervisor, Morpheus Enterprise can then provide added capabilities as needed, including automation, self-service provisioning, and auto-scaling. VME can be licensed on its own, while a Morpheus Enterprise license includes VME. Packaged together, they provide all of the basic virtualization features common in government at nearly 90% less cost than the market leader, Ceccola says.

“HPE ultimately is looking to solve the virtualization problem for the federal customer with the right price and performance for the mission at hand,” he says.

“Agencies’ budgets are being scrutinized every day by leadership in this administration, and they have to ensure that they’re getting the best value out of their solution,” he says. “With HPE, they’re not having to pay for something that they don’t need. We’re actually freeing up dollars that they can put toward the mission.”

HPE’s approach to virtualization already is being validated in high-security government use cases: DISA recently awarded HPE a 10-year, $931 million contract to support data center modernization.

LEARN MORE: Why virtualization is the foundation of modern hybrid infrastructure.

Next Steps Agencies Can Take

As agencies begin to re-evaluate their strategies and move toward more cost-effective virtualization, it’s worth taking time to consider not just the products but the vendors themselves. “Look at their reputation in the market and the trust that you have in your current OEM vendor,” Ceccola says. If trust is low, it may be time think about making a change.

From there, a proof of concept can help organizations demonstrate the effectiveness of a new approach. “Whatever product you think might meet your needs, bring it into your walls. Load it on a set of servers, migrate some of your environments over to it in a nonproduction environment and test it out,” he says.

HPE will help federal agencies to do that. “We can support them in our lab in Reston, Va., or, if they want to do it within their walls — which they might, for security reasons — we strongly support that as well. And those proofs of concept are no-obligation,” Ceccola says.

If a new solution meets 90% of the need, and an agency wants to keep running its current solution for the rest, “Morpheus Enterprise can manage those too, so you get a unified management across HPE VME and your current solution,” he says.

Overall, a new approach to virtualization can drive new operational efficiencies while also freeing up funds and personnel in support of mission-critical needs.

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