Successful server consolidation: it is all in the preparation

Successful server consolidation: it's all in the preparation
Consolidation
economics
As stated in the introduction of this paper, IT departments are often unable to implement
a server consolidation effort without showing economic justification first. While a server
consolidation effort provides IT departments many operational and strategic avantages,
often the most important aspect of a successful consolidation is the financial value.
Server consolidation discussions usually include Total Cost of Ownership (TCO),
payback (in terms of months), and Return On Investment (ROI). Later in this section,
TCO, payback, and ROI will be discussed in greater detail.
Cost savings
It is important to first review some of the very basic cost savings that can be realized
through a server consolidation initiative.
Power consumption
A very basic cost reduction can be realized from savings in power costs. Having a
smaller number of servers of the same technology will use less power. Deploying power-
efficient servers into your environment can lead to even less power usage and lower
power costs.
Increased server to
engineer ratio
Staffing costs are another area where cost reduction and cost avoidance can be
realized. A streamlined infrastructure leads to a reduction in the amount of time it takes
to manage the IT environment. Therefore, it would allow the same amount of people
more time to manage the larger infrastructure. By decreasing the administrative time for
your IT environment, you also avoid having to hire more IT staff to manage the
infrastructure. The number of servers per engineer can vary, leading to staff resource
savings.
Service level
agreements and
server licenses
Service Level Agreements (SLA) and server licenses are other areas where significant cost
savings can be realized. If your IT department pays another company to maintain a
certain amount of servers and you reduce the number of servers needed, your costs are
immediately reduced. In terms of server licenses, if you reduce the number of servers
that software you purchase is licensed for, your expenditures will be lower due to the
reduction of the number of servers.
Real estate
For some companies, data center space is not an issue. However, the majority of
corporations have a limited amount of physical real estate for their IT environment. If
your data center footprint is reduced through consolidation, real estate may be freed up
for other business purposes or cost avoidance for data center space.
Idle resources
Low utilization numbers are common place in IT environments, but there is cost of
underutilized resources. Typically, you can double utilization numbers using half the
compute resources.
Total cost of
ownership
Total Cost of Ownership (TCO) is calculated using all costs involved with an IT
department. The costs used to determine TCO are depreciation, maintenance, staff, real
estate used for the environment and planned renewals. Server consolidation initiatives
frequently result in a significant decrease in TCO in both hard and soft costs.
Payback
Payback is the amount of time it takes organizations to recover their initial investment. It
is widely recognized that 12 to 24 months is the average payback in terms of server
consolidation initiatives. In other words, if your organization spent USD $2 million
dollars on a server consolidation initiative and realized a cost savings average of USD
$160,000/month your payback would be 12.5 months. Most customers are looking for
payback within 6 to 12 months.
15