Read a transcript of the podcast.
Broadly dispersed datacenters are a huge and growing expense to enterprises -- yet the demands for more applications delivered fast and reliably is mounting. Can enterprises have it both ways: Fewer datacenters and better performance? Can they cut operating costs in doing so, and protect their resources from disasters?
Two executives from Hewlett-Packard's Consulting and Integration Group unequivocally say, "Yes!" My most recent sponsored BriefingsDirect podcast is with Ewald Comhaire, director of the global practice for Infrastructure Services at HP, along with Peg Ofstead, worldwide solution lead for HP IT Shared Services and IT Consolidation Services.
The IT Consolidation topic is no small item. With some 70% of IT budgets being consumed by operating costs -- including real estate, electricity and labor -- the need to rationalize the location and capabilities of strategic datacenters is a top concern. Yet the decision to consolidate sets off a breathtaking domino-effect of considerations, from business continuity to data and applications modernization to planning for mergers and acquisitions.
Join us as we delve into the process, pitfalls and promises of strategic IT Consolidation.
Here are some excerpts:
Obviously the payoff is going to depend on how diverse your IT environment is to start with. If you had multiple acquisitions, as HP has, there are more payoffs because there is more to clean up. Large companies that have not yet consolidated their servers can probably get a 25 percent to 40 percent TCO savings around those server farms and their storage.
You get real savings in the applications phase. Far beyond TCO savings, you get business benefits. For example, HP is going to a single data warehouse, consolidating over 700 data marts. The business benefit of having a single source of data and consistent information about our customers and our orders is that we have huge ramifications that go way beyond just IT savings for a corporation.
We’re not just talking about consolidation in terms of physical consolidation, a location, and numbers of servers -- we’re talking about a consolidated datacenter approach that functionally consolidates IT. That’s how we’ve evolved the thinking on consolidation, and it is also why today we call it "IT" consolidation, not just "server" consolidation. We have evolved over time to a more holistic approach of people, process, and technology.
We’re looking at the processes that are being executed to see if they can be simplified, streamlined, and organized according to industry standards or best practices. Finally, we do the technology part of consolidation exercise, we look at standardization and virtualization of the infrastructure components, and make those work together with less things like configurations of applications. All of these are standardized and provide the value back to the business.
When we look back 10 years ago, most of this was driven by the capabilities of the infrastructure. As you consolidate you need better processes, you need to manage consolidated infrastructure, and that adds complexity. Do your tools, your systems, your software, your operating system have the capability to really consolidate on a technological level?
Fewer customers are worried about whether the technology can do it. Other factors are now driving the need for consolidation. Customers are looking at a functional level, consolidating not around the technology, but around functions being offered to the business, using that as a central element, with the technology following the service.We have seen an evolution of what customers take as a primary centerpiece for consolidation. It has moved off technology and more to a functional type of consolidation.
The cost model that we use is a simple one. It can be well understood by the customers as well as HP. We use four primary dimensions. One is cost and what we can do on cost saving and cost avoidance. Avoidance is an increasingly important element. The second is the quality of service. Did we improve the quality of the services that were delivered to the business? That has some business value as well. The third, are we able to do things faster, turn around the request of the business in a faster way, deploy things faster, put changes into place faster.
The final one is have we reduced, in general, the risk position of the customer, whether it’s against security, or intrusion at the level of compliancy, or at the level of continuous operation and disaster recoverability. We’re putting value on whether we reduced the risk with the customer.
Certainly consolidation is the opportunity for folks to move to a real strategic platform view. While they’re cutting costs, they have the opportunity to really move to new technologies and virtualization. For example, we’re seeing a lot of people using Linux. One of the great things about that is not only are you able to clean up your environment, but you are actually able to move it forward to new strategies.
The simplification of the environment is one of our key objectives, and typically we do that by standardizing on less different types of equipment. We also do that by bringing virtualization, which allows us to better share the same equipment between multiple workloads so we don’t need as many assets, which again is a simplification element -- but also significant to cost reduction.
We also simplify things like the IT management processes and tools, and we have a significant set of services around IT optimization and IT service management that can help simplify the environment. All these technologies like virtualization, automation, and optimized service deployment are significant enablers for consolidation.