Controlling Costs Through Virtualization, Consolidation and Modernization

Today, we discuss combining some major efforts in IT administration and deployment in order to both cut costs in the near term and also to put in place greater efficiencies, agility, enterprise business benefits, and long-term cost benefits.

We’re going to be talking about how consolidation, modernization, and virtualization play self-supporting roles alone and in combination for enterprises looking to improve how they deliver services to their businesses. Yet they also play a role in reducing labor and maintenance cost and can have much larger benefits — including producing far better server utilization rates — that ultimately cut IT costs in total.

Here to help us dig into the relationship between a modern and consolidated approach to IT data centers and total cost, we welcome John Bennett. He’s the worldwide solution manager for data center transformation solutions at HP.

Listen to the podcast (24:28 minutes).

Dana Gardner: As I mentioned, cost is always an issue with organizations, and IT departments are among those facing a lot of pressure nowadays to justify their expenses, show improvements in cost cutting, and, at the same time, improve productivity. John, I wonder if you could help us understand this. We know well enough the cost pressures and economic environment that we’re in, but what has changed in terms of what can be brought to this problem set from the perspective of technology and process?

John Bennett: Cost, itself, is easy and complex to deal with. It’s easy to say, “reduce costs.” It’s very difficult to understand what types of costs I can reduce and what kind of savings I get from them.

When we look at reducing cost, one of the keys is to get a handle around what costs you’re really looking to address and how you can address them. It turns out that many of the cost dimensions can be addressed through a common and integrated approach, building on recent advances in both technology and management and automation tools, on virtualization, and on the investments that companies like HP have been making in focusing on enhancing the energy efficiency and the manageability of the servers and infrastructure that we provide to customers.

This is why, in my mind, the themes of consolidation, which people have been doing forever; modernization, very consciously making decisions to replace existing infrastructure with newer infrastructure for gains other than performance; and virtualization, which has a lot of promise in terms of driving cost out of the organization can increase aspects like flexibility and agility that you mentioned earlier on. It’s the ability to respond to grow quickly, to respond the competitive opportunity or threat very quickly, and the ability for IT to enable the business to be more aggressive, rather than becoming a limiting factor in the roll-out of new products or services.

Gardner: We’re certainly well aware of what’s changed in the macroeconomic climate over the last year or so, but what’s different from two or three years ago, in terms of what we can bring to the table to address these general issues about cost. In particular, how we can modernize, consolidate, and get those energy benefits?

Bennett: Besides the macro factors around economics that have come into play, we’ve seen some other issues pop up in the last several years as well. One of them is an increasing focus on green, which means a business perspective on being green as an organization. For many IT organizations, it means really looking to reduce energy consumption and energy-related costs.

We’ve also seen in many organizations, as they move to a bladed infrastructure and move to denser environments, that data center capacity and energy constraint, the amount of energy available to a data center, is also an inhibiting factor. It’s one of the reasons that we really advise customers to take a look at doing consolidation, modernization and virtualization together.

As I briefly touched on earlier, this has been enhanced by a lot of the improvements in the products themselves. They are now instrumented for increasing manageability and automation. The products are integrated to provide management support not just for availability and for performance, but also for energy. They’re instrumented to support the automation of the environment, including the ability to turn off servers that you don’t know or care about. They’re further enhanced by the enhancements in virtualization. A lot of people are doing virtualization.

What we’re doing as a company is focusing on the management and the automation of that environment, because we see virtualization really stressing data center and infrastructure management environments pretty substantively. In many cases, it’s impacting governance of the data center.

This is why we look at them together. By combining them and taking an integrated approach to them, you not only don’t raise for yourself the issues that some other people may be experiencing, but you can use them to address a broad set of issues, and realize aspects of a data center transformation by approaching these things in an orderly and planned way.

Gardner: We’ve talked about how energy issues are now coming to be much more prominent, cost being a critical issue. Is there anything different about the load, about the characteristic of what we’re asking data centers to do now, than perhaps five, 10 or 15 years ago that plays into why I would want to modernize and not just look to cut cost?

Bennett: The increasing density of devices in the data-center environment — racks and racks of servers, for example — have both increased the demand for power to run them, but, in many cases, have created issues related to cooling from heat in the environment. That has been a trend that has exposed people to risk factors related to energy that they hadn’t experienced before when they had standalone servers or mainframes in the environment.

With virtualization, we also see increasing density and concentration of devices, because you’re really separating the assets — servers, storage and the networking environment — from the implications in the business services they are providing. It becomes a shared environment and your shared environment is just more productive and more flexible if it’s one shared environment instead of three, four, five or 10 shared environments. That increases the density, and it goes back to these other factors that we talked about. That’s clearly one of the more recent trends of the last few years in many data centers.

Gardner: I see. So, it’s where we may have had standalone hardware, software applications, siloed or mainframe. When you virtualize, you’re able to distribute the load and therefore look to have much greater ability to increase your utilization generally rather than just at a hit-or-miss basis.

Bennett: Absolutely. I don’t think I could have said it better myself.

Dana Gardner is president and principal analyst at Interarbor Solutions, which tracks trends, delivers forecasts and interprets the competitive landscape of enterprise applications and software infrastructure markets for clients. He also produces BriefingsDirect sponsored podcasts. Follow Dana Gardner on Twitter. Disclosure: HP sponsored this podcast.

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