Most enterprises accumulate IT assets over decades. As technology evolves, the enterprise purchases more hardware, gadgets, tools, and software. But very few enterprises “clean the house” or streamline their asset base. They end up with bad network architecture. The accumulated IT assets remain underutilised. As cost-cutting sets in, enterprises seek value through IT consolidation and a shared services model. These initiatives unlock spare capacity, reducing IT footprint and saving both CAPEX and OPEX costs.

What is Data Center Consolidation

Data Centers are a significant yet unavoidable cost centre for most enterprises. Yet most data centres have huge spare capacity. The average enterprise uses only 20% to 30% capacity, on average. Even organisations adopting best practices use only 70% to 80% of server capacity.

Consolidation of data centres may involve:

• Merging physical servers into fewer data centres, to reduce administrative hassles.
• Deploying high-density storage solutions, virtualization, and containers. These solutions reduce the volume of physical IT assets. Virtualization distributes server capacity among many environments, enabling its full use. Containers packs code and its dependencies, enabling a quick run of the application.
• Migrating the infrastructure to cloud-based platforms, for greater efficiency and scalability.
• Adopting edge computing, or moving processes locally, to the user’s computer or an IoT device. This reduces latency and reduces the demand for bandwidth.
• Collocation, or hosting servers in a third-party data centre, for efficiencies of shared overheads and scale.

Why Data Center Consolidation

Consolidation optimises resources and delivers considerable cost savings. Almost two out of every three enterprises have consolidated data centres, as the benefits become evident. 

Data Center consolidation delivers: 

• Lower energy usage
• Lesser maintenance costs. Fewer components make it easier to pinpoint problems and repair them faster, improving Mean Time to Repair.
• Improved security. A smaller physical infrastructure means fewer points of vulnerability.
• More consistency. Managing network and storage performance become easier.

How to Get Data Center Consolidation Right

Data centre consolidation is a double-edged sword. Without a clear-cut execution strategy, backed up by the right competence and tools, consolidation projects disrupt the business. Mismanaged consolidation results in lost data, loss of productivity, delayed delivery of services, and overall disaster.

To get consolidation right,

• Detail and map the existing physical infrastructure and assets. Detail the physical locations hosting data centre equipment. List out the servers at each location, the energy requirements at each site, and other details.
• Understand the requirements of different departments and teams. Analyse user needs, interviews, and other interventions.
• Develop strategic and tactical plans to put in place consolidation and shared services.
• Develop product and service catalogues. Create dependency maps. Trace the interaction among data centre applications, processes, and infrastructure components.
• Engage key stakeholders early in the process and enlist their support to drive the initiative. Take feedback from the rank-and-file and secure stakeholder agreement upfront. Educate end-users of the benefits and offer timely support as required.
• Look for “quick wins,” or issues with existing data centres for easy rectification. Start the initiative with such an easy fix. For instance, decommission dated servers.
• Prepare the “receiving” facility or the site of the consolidated data centre. Make sure the new site has enough floor space, power, cooling, and other resources.
• Modernise and upgrade data centre equipment, as per the laid down strategy. Modernisation improves data centre management and security. It allows enterprises to leverage virtualization and automation. In fact, if legacy systems do not run on the new equipment post-consolidation, modernisation no longer remains optional.
• Push standardized processes. Gather and disseminate best practices. Enable a central online knowledge repository of knowledge assets with accessibility across-the-board.
• Create a road map for implementation and pilot each opportunity. 

When and Where to Roll-Out Data Center Consolidation

IT consolidation and shared services make sense for any large enterprise. 

IT Consolidation and roll-out of shared services is a long-term project. The methodology, strategies and tactics change in a fluid business environment. Constraints such as contract limitations, real estate costs, and opportunity cost for investments limit the speed or nature of implementation. At times, enterprises retain a distributed model for disaster recovery or other considerations.

Best-in-class enterprises have solid plans in place, but keep it fluid. They remain flexible with their plans and execution tactics. The CIO keeps track of the external environment and coordinates with business managers to roll out changes in the least disruptive way. They prioritise consolidation initiatives, considering savings, ease-of-implementation, and other relevant factors.

Effective risk and change management plans mitigate the impact of disruption. Unplanned network downtime or loss of data assets is damaging to any business

Who Drives Data Center Consolidation: Shared Service of IT Staff

Shared staffing is a key dimension of consolidation.

Most enterprises staff IT teams to handle peak workloads. Many enterprises dedicate systems administrators to particular applications without considering the workload. Some administrators, dedicated to demanding systems, end up overworked and stressed-out. Other administrators with less demanding systems remain underutilized.

When the organisation grows through mergers and acquisitions, distinct branches and departments, formerly independent, keep their dedicated resources and staff.

Pooling the IT workforce through a shared model:

• Rationalizes the workload for everyone. Empirical evidence suggests pooling to free up 30% to 40% of workforce capacity.
• Makes available a diverse set of skills across-the-board. The entire organisation gets access to skills until now in a specific department or function.
• Delivers advantage of scale, to reduce dependency on unpredictable contract labour.
• Enable the sharing of knowledge and best practices across the organization. For instance, different agents in call centres use different tools and scripts, causing variations in productivity levels. Pooling brings about standardization, with the best practice replacing inefficient practices.

The success of pooling depends on:

• Well-thought-out plans and a mechanism for seamless collaboration. A collaborative platform enables clear communications to prevent misunderstandings and ambiguity.
• Recognition of the unique skill sets of pooled employees, to prevent under-utilization of the employee.
• Managing demand for IT resources through a central governance set-up. Without a unified IT network and an empowered CIO, efficient allocation of resources becomes a non-starter.

IT consolidation and shared services enable an agile organisation. When done right, it enables the enterprise to become leaner, smarter, and more competitive.