Data center, server consolidations remain top IT issue

PALM DESERT, CALIFORNIA (03/10/2004) - The drive to data center and server consolidation began in earnest after the dot-com bust as a remedy for the excesses of rapid IT growth in many enterprises. And consolidations remain a top IT issue for a lot of reasons, even if some of the cost savings aren't exactly what vendors predict.

Vendors "get all excited about how you can get all this benefit from server reduction," said Gary Shanker, director of IS enterprise infrastructure services at Arizona Public Services Corp. He cited claims that as many as seven or eight servers could be easily reduced to just one, but he said the best he has been able to do is consolidate three or four servers to one at the Phoenix-based utility. Limits on the ability of a server to support multiple applications without conflicts limits consolidation.

Even so, there are other drivers forcing Arizona Public to consolidate, including a decision to get rid of 150 Windows NT servers and move to a new Windows operating environment, he said. "I probably wouldn't do it for the sake of just doing it," said Shanker.

Many of the IT managers interviewed at Computerworld's Premier 100 IT Leaders Conference here in Palm Desert, California, this week said they're involved in extensive server or data center consolidation projects. And while their views vary about a consolidation's potential for savings, they said there are many reasons for undertaking one.

Compliance with the Sarbanes-Oxley Act wasn't a consideration when Michael Gaynor, senior vice president and CIO at Federal Mogul Corp., began his consolidation effort 18 months ago, but improving IT audit ability to meet compliance requests has since emerged as a key reason behind his effort.

The Southfield, Mich.-based global supplier of automotive components consolidated nine data centers last year, and plans to take out nine more this year. The goal is to reduce the number of data centers to two, one in the U.S. and one in Europe.

Gaynor said consolidation is also an essential step when considering outsourcing. Federal Mogul runs its IT systems in-house, but Gaynor said he is looking at strategic sourcing of his IT infrastructure -- something he can't do until he cuts his own costs.

"What you need to do as a business manager is first clean up your own house," said Gaynor, adding that if he doesn't reduce his costs, an outsourcer will take those savings. Once a company saves money through consolidation, "if you can get another 25 percent or 30 percent out of an outsourcer, it might make it worth something," he said.

Ken Hair, the IT director of the Detroit Medical Center, has been consolidating servers for five years to ease support and maintenance and to cut costs. The consolidations often come in response to new acquisitions by the 12,000-employee health care organization, which operates 10 hospitals, two nursing centers and other facilities in Michigan.

Application conflicts sometimes arise, and Hair is dealing with a unique application that he said he may leave on its own server. But many hospitals share common applications, so much of his work is focused on physical consolidation, such as using blades and racks and sharing a common network infrastructure and management capability.

Server consolidation isn't the answer for everyone. Mark Naylor, CIO at Humber College, a Toronto-based institution with more than 45,000 full- and part-time students, said server consolidations require costly testing to ensure that applications don't conflict. Centralizing also increases the possibility that a security breach on one server could lead to a larger problem.

"People costs are more important to me then the cost of a server," said Naylor. "My people resources are very limited, so it's easier for me to go buy another server," he said.

Server consolidation is also having an impact on data centers, particularly on the need for more space, said Wahib Nawabi, worldwide director of American Power Conversion Corp.'s enterprise business segment.

The No. 1 challenge facing data center managers is expanding capacity without "tremendous costs and downtime," said Nawabi. His West Kingston, R.I., firm has developed a standards-based modular approach to data center management that allows firms to increase capacity while minimizing space needs.

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