Key Cost Optimization Strategy - Consolidate and Co-locate

Article by Nilesh Rane



‘Do more with less’ is down on a beaten track. No more are CIOs singing this as a good-to-have. It has truly become a business challenge – and small and mid -sized organizations are already sweating in the heat.

It is all about finding ways to reallocate resources and budget from routine operating expenses to strategic investments for growth and innovation. Point in case is the amount of money spent on keeping the infrastructure up and running.

Are you also facing a situation where your IT environment is one-workload-per-server, involving human-intensive tasks and disparate IT management patterns that are spread over multiple locations or IT systems?

Are you looking for ways to improve resource utilization and performance, lower complexity and cost, and free IT resources to focus on business priorities?

In a situation where large budgets were available for investments in IT, building bigger and better data centers were not a problem at all. But in today’s economic fragility, investing CapEx into data centers is not viable and CIOs are burdened dealing with uncomfortable truths such as low Return on Investments (RoI) and increasing Total Cost of Ownership (TCO), before IT investments can be made.

CIOs are looking at solutions to address their over-utilized data centers, or to put it positively, while looking at data center expansion or growth projects, CIOs need to look and evaluate options carefully. There are many paths that can be right for the business, the trick lies in choosing the right path that fits the organization’s long and short term goals – besides keeping parameters such as performance, reliability, cost optimization and reduction, and ease of management at the top of their priority list.

Optimizing IT environment within the data center should be the first step to bridge the gap between disparate, inflexible and complex, not to forget cost-intensive, infrastructures of the past and the present need, for IT to facilitate business growth.

Start with Consolidation

One of the fist things that CIOs should embark on is to consolidate their existing IT Infrastructure footprints. Some of the key considerations or questions that need to be answered are:

  • Can the server, networking and storage technologies be upgraded – for example, replace existing servers by blades?
  • Can the existing infrastructure be virtualized to optimize utilization and avoid wasted compute, storage?
  • Can services be consolidated, to be used in a shared model?

The exercise of consolidation is to simplify the IT infrastructure, and virtualization plays a major role here. The objectives should be very clear and straightforward:

  • Reduce IT operating costs
  • Reduce complexity of IT environment
  • Maximize performance and utilization of IT resources
  • Bring ease and effectiveness into management of IT

By consolidating servers and storage within the data center, and then looking at the most effective ways of automation, one can achieve some major goals of the consolidation exercise – thereby helping lower costs dramatically. Typical benefits associated with consolidation and automation exercise are:

  • Energy cost savings and reduced energy consumption
  • Improved efficiency and effectiveness
  • Managed capacity and shared resources
  • Reduced complexity of IT environment
  • Lower costs of hardware, management and people
  • Easy management and administration of IT
  • Fast response rate and faster time-to-market

Next, Co-locate Your IT

Growth and scale are key concerns of most businesses today – at least for most growing businesses. Once the consolidation exercise is done the next step is to enable the IT environment to be able to scale quickly without having to invest huge, in terms of capital expenditure or CapEx. Here colocation can fit the bill well. Colocation offers several advantages that can help businesses looking at expanding or replacing their data centers.

Some of the benefits of colocation can be categorized into the following, but not limited to them.

CapEx Savings: Colocation can help save the huge start up cost that is needed to expand or replace data centers.

Dramatic Cost Savings: Colocation certainly brings the benefit of cost savings at multiple levels. From reducing people costs to cost associated with depreciation and obsolescence, colocation services helps organizations on a fast path to reaching their business goals.

Uptime Guarantees: Most colocation service providers or OSPs (Outsourcing service providers) offer better protection and guarantee against outages. Most OSPs offer 99.99% uptime. These providers have multiple redundancies at power, bandwidth, and compute layers.

Ease of Management: Colo service providers offer both software and hardware management services leaving businesses to focus on their core areas of competency rather than addressing the need for hiring and managing skilled resources to do the same.

It is important to understand though that over a longer period of time, the benefit of cost to value is only beneficial if there is a strong partnership between the two organizations – continuously analyzing the usage vs. cost vs. value metrics, evaluated regularly.

Depending on the size of the organization and specific business of it, various iterations of the above mentioned can be adopted. Most provide better cost to performance to value advantage for the business.

Future of enterprise computing is dramatically changing and the day is near for paradigm shift in most organizations choosing third party service providers and experts to handle IT and keeping the core strategic functions in-house.