Many CPA firms install several years of tax preparation software on their desktop computers, in addition to perhaps a few different versions of QuickBooks. This often prevents firms from easily upgrading to new hardware because the prior year programs may not run well on new operating systems and it’s a hassle to find all of the old installation CDs and then reinstall the applications.
But there is help. Virtualization technology can solve this dilemma by providing a way to move an existing computer environment to new computer hardware. Since the new virtual machine is a copy of the old, the applications don’t need to be reinstalled and can continue to run on their intended operating systems.
Virtualization technology is used by IT professionals working in companies of all sizes worldwide to transform IT infrastructure, consolidate servers, migrate systems, and enable on-demand, cloud-based services.
This article will outline some of the ways CPA firms can use virtualization technology.
In short, virtualization technology turns one physical computer into many virtual computers, each with its own environment that consists of an operating system, applications and data. Several virtual machines can run concurrently on a single, physical machine.
Enabling this technology is a sophisticated program that is installed just like other programs and enables the user to subdivide the physical computer into several virtual computers. Typically, the return on investment on virtualization technology is favorable due to the cost difference between computer hardware and virtualization software, which can be obtained for free or for at a fraction of the cost of hardware.
Ways that virtualization technology can help CPA firms solve common problems include:
- When upgrading to a new computer, the user frequently fears losing the data and programs from the former computer. Using virtualization technology, the user can buy new hardware with a current operating system and Microsoft Office suite, and then install only the current year versions of tax and other key programs. The user can then run a copy of the former computer as a virtual machine inside the new computer, and use it on an as needed basis. For example, to access a prior year program. In addition, it brings peace of mind knowing that everything from the old computer was moved forward as a virtual machine to the new computer.
- Some virtual machine applications support various operating systems (Windows on a Mac or Linux on a Windows machine). Since virtual machines can run concurrently, there is no need to reboot the hardware to change between operating systems. If you’ve wanted to buy a Mac, but can’t live without your Windows software, this is one way to run Windows applications on a Mac.
- Sometimes users want a way to evaluate a new operating system without having to reformat or reload a system. This can easily be accomplished by installing the new operating system into a virtual machine.
- Virtual machines support “snapshots,” which are copies of the current system state. A user can take a snapshot before installing new software, so that if the new software doesn’t work out or otherwise creates conflicts, the user can revert to the snapshot. This provides a safe way to evaluate new software and test beta versions of applications.
Some of the ways virtualization technology can help when installed on a server include:
- When existing server resources are underutilized, installing an additional virtual machine into the existing server (rather than buying new server hardware) maximizes the server’s resources and saves the expense of new computer hardware.
- Some CPA firms have several servers, so consolidating those servers into a single piece of hardware can reduce energy and support costs.
- Virtual machine files can be backed up to enable a full restore (including operating system, applications and data) to any new hardware that is running the same virtualization application.
- Remote workers often need a dedicated Windows machine in the office to enable the use of Windows Remote Desktop. Virtual machine technology can subdivide a single computer into multiple independent machines.
Bear in Mind
Along with certain benefits, utilizing virtualization technology may impose new system requirements or limitations.
- Be sure to be in compliance with application and operating system licensing. Installing a program in two virtual machines that are running on the same physical piece of hardware may require two licenses.
- Since consolidating several computers onto one physical machine increases a firm’s reliance on that one physical machine, disaster recovery plans and backup strategies need to be strictly enforced.
- Hardware performance may be an issue, and a virtual machine may not fully utilize the capability of a given device. For example, if a display adapter has 3-D capabilities, those capabilities may not be available when running through a virtual machine.
- Device compatibility may be an issue with certain peripherals and hardware devices. Using virtualization software requires increased technical competency and training to be able to boot a virtual machine and switch between virtual machines.
- Multiple monitors may or may not be fully supported depending on the virtualization software selected.
- Performance may feel slower due to the fact that each virtual machine has to operate through a layer of virtualization software and that the physical hardware resources are subdivided between all running virtual machines.
The following set-up guide provides an installation overview. For detailed assistance refer to the help files and installation guides for the selected virtualization application.
There are a few ways to create a virtual machine: from scratch, convert an existing computer into a virtual machine or download and run virtual machine images.
We’ll focus on creating one from scratch. First, install a virtualization application (see sidebar for specific product ideas.) Next, launch the virtualization program and use the wizard to create a new virtual machine. Insert an operating system CD (or iso image) and boot the new virtual machine to install the operating system. After the operating system is installed, install any user programs by downloading them or by using their installation CDs.
I have three virtual computers installed on my system: “OldComputer,” which is a copy of my old computer that was running on old hardware; “Backup,” which is a backup Windows XP machine and is not my official system backup; and “Windows 7,” which is a copy of Windows 7 that I installed as a virtual machine.
Each virtual machine has been assigned a portion of the physical computer’s resources (an allocation of memory and hard drive space). As a note, the hard drive that is recognized by the virtual machine is actually a single file sitting on the physical machine. This fact makes it easy to copy an entire virtual machine to another physical machine, and also facilitates backup.
There is a tab representing each virtual machine, and as the user selects a tab, the user is presented with the desktop of the selected virtual machine. The user can elect to run a virtual computer in full screen mode, too.
When a virtual machine is powered on, it boots up just as a normal computer does. Once booted up, the normal desktop is presented and all installed applications are available to the user.
The virtual machine has access to the network, shared drives, the internet and to other computer resources such as printers and scanners. In addition, while the virtual machine is running, its shared network resources are available to the network—a critical point for those setting up virtual servers.
The following case studies illustrate some real-world uses of virtualization technology.
- We have a client that likes to evaluate lots of accounting applications. Rather than download and install all of the different accounting and tax programs onto her main computer, she downloads them into a virtual machine. Since the virtual machine is isolated, the evaluation software can’t create conflicts with her main computer applications and, in case any hidden spyware or viruses are installed with the evaluation programs, the virtual machine can be restored to a previous state using the “snapshot” feature.
- Another client really loves her Mac laptop. Sometimes she needs to run her Windows business applications and, by using virtualization technology, she can run both Mac applications and Windows applications simultaneously on her Mac.
- In another case, we converted a physical machine to a virtual machine to upgrade the hardware. Now, all mission-critical, current-year programs are installed on the physical machine, but all legacy applications are available through the virtual machine. Since CPAs often have prior versions of applications that need to be available on an occasional basis, such as prior year tax prep software, keeping them available through the virtual machine means they don’t all need to be reinstalled.
Your Virtualization Application
There are many virtualization applications and technologies. Some are commercial and some are open source. Some are software only, while others utilize hardware virtualization technology. Some work with only certain operating systems. Two popular virtualization programs are Microsoft’s Virtual PC and VMWare. In addition to commercial offerings, open-source virtualization technologies are available, including VirtualBox from Sun. VMWare and Microsoft, while commercial, offer both free and licensed products.
VMWare Workstation is a polished, stable and easy-to-use application, and would be a good fit for experimenting with virtualization technology on a desktop computer. Additionally, VMWare provides—at no cost—its Converter product, which converts a physical machine into a virtual machine, and their Player product that runs (but does not create) virtual machines.
Where to go From Here
If virtualization technology sounds interesting, start by obtaining, installing and evaluating a copy of a virtualization application (see sidebar). If virtualization has the potential to provide value, expand its use throughout the firm—it may be able to help you solve a variety of IT issues in your firm.