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Defining Data Center Efficiency:
Simplifying Through Virtualization
Rapid changes in the business environment spend more money on IT. To achieve their
have put tremendous pressure on corpo- business goals and unlock the value of their
rations and their IT infrastructures. Tough infrastructures, companies needed a more
global competition required new levels of disciplined and structured way to eliminate
operational performance while keeping costs inefficiencies. A growing number have turned
low. Executives, customers, regulators, and to a three-step process: standardize, simplify,
investors became ever more demanding. And and automate.
then the economic roller coaster took every- This installment, the second in a three-
one on quite a ride. part series, explores how simplification
At first, enterprises turned to faster and extends the value of data center stand-
more powerful hardware. But buying a com- ardization efforts and forms a stable, efficient
2 pany’s way into better operations is expen- base that can be used to support automation.
sive and highly inefficient. Companies that By tackling each of the three steps, in
tried quickly ran out of room for new equip- order, enterprises can ensure that their infra-
ment and the power and cooling to run it. structures provide the flexibility to meet cur-
Some corporations experimented with rent and future demands, the cost-effective-
simplifying their infrastructure: some server ness to extract ROI from existing technology
consolidation here, a little virtualization investments, and a foundation for new tech
there. But that became just another way to investments to carry efficiency forward.
tems, tools, and applications for their sanctioned •Sprawl. A company that runs inefficiently
equivalents, it may still end up with a compli- needs more infrastructure as a result. All those
cated, convoluted, and expensive mess that fails servers, storage units, and networking equip-
to deliver sufficient value. ment must live somewhere, and the physical
For example, in its 2009 Q4 global ERP con- real estate needed costs money to lease and
solidation survey, Forrester Research found that maintain. Not only does the corporation tie up
12 percent of the companies interviewed had capital, but it increases facilities expenses.
from five to nine global instances of their ERP • Power and cooling. The more powerful the
packages. An additional 14 percent had 10 or equipment, the more energy it consumes.
more instances, and a fifth of respondents didn’t Power and cooling requirements have increased
know the number.1 over time, and existing data centers were never
Clearly, even standard software doesn’t designed with such needs in mind. As busi-
ensure efficient deployment. And standardiza- ness grows, demands on IT systems increase.
tion only helps if there is a standard to move to. Without greater capacity utilization, corpora-
More than 25 percent of the companies Forrester tions must expand the amount of equipment
interviewed ran 100 or more custom applications they run. Eventually, they may run out of space,
globally; 37 percent ran from five to 99. power, and cooling, requiring the company to
Problems facing a modern enterprise that build new data centers.
are beyond the power of standardization include: • Redundant administration. Even with stan-
3 • Excess capital investment. Having too many dardized equipment, there is only so much
servers, storage systems, and network seg- work each administrator can do. As the
ments means low utilization of existing capac- amount of equipment grows, enterprise IT
ity. A company runs more systems, often to departments must hire additional people to
accommodate rare peak workloads, than is adequately cover administration needs, unnec-
necessary to do its everyday work. That means essarily inflating head count.
significant capital is tied up for no reason; it’s • Inflexible resource deployment. In theory,
the equivalent of building a four-lane highway standardized equipment and software can
for a one-stoplight town. move easily from one part of a company to
1
Hamerman, Paul D. The State Of ERP 2009: Market Forces Drive Specialization, Consolidation, And Innovation, November, 2009.
UBM TECHWEB WHITE PAPER | Data Center Efficiency in the Virtual Era: Three Key Steps
4 By addressing all five aspects, simplification creates a dynamic and agile infra-
structure that allows a company to more directly match technical resources to
business needs at any given time and can free up to half of a company’s IT
budget.
another. In reality, the cost of redeployment, consume resources to “keep the lights on,”
usually involving an upgrade of capability, less money, time, people, and attention are left
is high enough that IT departments typi- for strategic investment and growth.
cally choose to buy more equipment instead, • Migration complications. As old hardware
increasing the amount of excess capacity. comes to the end of its life, unit-for-unit
• Management complexity. A byproduct of replacement requires additional investment in
equipment bloat is more complicated infra- underutilized systems and results in disrup-
structure management, because more copies tive transfer of data and applications. To keep
of management tools are needed. Greater things as they are, even with standardization,
complexity requires more effort to locate sys- means inevitable periodic interference with the
tems, provision services for new business appli- very business processes and activities that the IT
cations, and perform basic administrative tasks. infrastructure is supposed to enable.
The additional effort required ends up delaying Good economic times can mask the inefficiency
the underlying business processes and needs. of an IT infrastructure and data center. But
The corporation becomes slower to react and economic challenges bring the problems to
innovate, damaging its competitiveness. light. IT consultancy The Hackett Group recently
• Network strain. The more servers and tested the operational efficiency of large corpo-
storage pumping data over a network, the rations by examining whether companies could
more complex the architecture, routing, and proportionately scale their sales, general and
control of traffic. The more complex the data administrative (SG&A) costs as revenue varied
flow, the more difficult it is to run the network by 15 percent—a condition many businesses
efficiently, which can affect applications and, faced during the recent economic turndown.
by extension, corporate operations. “Three-quarters of the global 2000 companies
• Taxed strategic resources. As existing appli- [we tested] failed,” says the group’s IT advisory
cation portfolios and associated infrastructure practice leader Honorio Padron, in part because
UBM TECHWEB WHITE PAPER | Data Center Efficiency in the Virtual Era: Three Key Steps
IT expenses made up half the total SG&A cost. modate the rationalized design and eliminate
Padron notes that one measure of com- redundant hardware, software, and data centers.
plexity is the number of different applications Gartner estimates that data center consolidation
a company supports per thousand users. The will typically save from 5 percent to 15 percent of
greater the number of applications, the more the overall data center budget.
complex the infrastructure must be. “World class Virtualization involves separating physical
companies that have done…transformative strat- resources from virtual processes and treating
egies, including the redesign of the service deliv- servers, storage, and networks as pools of capac-
ery model, show 17 applications per thousand ity deployed as necessary. Virtualization can also
users,” Padron says. “A company that has not free additional hardware for further consolida-
done that will have 28 applications per thousand tion. According to Gartner, users see net savings
users. It’s almost two-to-one.” within two years, with server energy use down by
A Comprehensive, Phased Approach 82 percent and floor space savings of 86 percent.
Simplification is the hallmark of intelligent cor- When a company undertakes rationaliza-
porate infrastructure because it enables agility tion, consolidation, and virtualization, it makes its
and reduces unnecessary expenses. Technically, IT systems more effective in a number of ways,
simplification is a three-phase process: rational- answering the problems that standardization
ization, consolidation and virtualization. alone still leaves. The benefits enterprises derive
Rationalization involves determining what the from simplification efforts include:
5 company needs for its operations and designing • Efficient capacity. A company has the right
an architecture accordingly. According to a June number of servers, storage systems, and net-
2009 Gartner press release on data center costs, work segments and needs significantly less
rationalization and consolidation aid asset and hardware than before, which frees capital. By
inventory management, lower annual energy costs reducing the amount of equipment, IT also
(typically by $400 per server per year), and yield a constrains data traffic and demands on man-
5 to 10 percent saving in overall hardware costs.2 agement processes.
Consolidation involves reconfiguring servers, • Reduced facility requirements. Reducing the
networks, storage, and applications to accom- amount of equipment also decreases space,
2
Kumar, Rakesh. Gartner Outlines Seven Practical Ways to Save Costs in the Data Center, June, 2009.
UBM TECHWEB WHITE PAPER | Data Center Efficiency in the Virtual Era: Three Key Steps
and turn them into pools of corporate assets that vendor. If a company chooses the second option,
can be assigned to specific needs as necessary. it effectively locks itself in with a specific vendor
However, companies must take care when and limits itself to the third-party applications
specifying their rationalized platform. Vendors that are compatible with that vendor’s approach
that may claim to have open products might to virtualization.
effectively be proprietary. For example, two ven- Three problems result from vendor lock-in.
dors can base their servers on Intel x86 architec- One is the realization of the worst risk analysis
ture. One of the hardware lines could work with fear: If the company faces a problem in moving a
third-party products while the other requires that silo to the new technology, it may find it impos-
the corporation source everything from the one sible to return to the previous state.
Studies in Simplification
Here’s a look at three companies that have put simplification to work in their
environments:
Dell, a $53 billion company that’s one of the leading PC manufacturers in
the world, found itself with the same IT problems many giant corporations
face. New equipment deployment took as much as 45 days from order to
installation. The company was running out of space, power, and cooling for
servers. Out of tens of thousands of servers, three-quarters stayed under 20
percent utilization. Dell’s IT department worked with the company’s consult-
ing arm to develop a strategy to combat these inefficiencies. The company
first standardized on Intel Xenon-powered Dell PowerEdge R900 servers and
EqualLogic PS5000XV storage area networks, then simplified by virtualizing
thousands of servers, all controlled by VMware. The company’s efforts paid
off in consolidation ratios of up to 20 to 1 and a 30 percent jump in utiliza-
tion. Dell saved an estimated $29 million in hardware purchases, reduced
space, cooling, and power costs, and shrank the time for new deployments
8 from 45 days to 4.
Emerson, a 120-year-old $22 billion technology company, needed flexi-
ble and agile communications and computing to support a long-term growth
strategy. However, the legacy IT system consisted of implementation silos
that extended to 135 data centers. The company implemented a consolida-
tion strategy with Dell PowerEdge M610 and PowerEdge M710 blade servers
using Intel® Xenon processor 5500 and 5600 series architecture and Dell/EMC
CX4-960 storage area networks. The PowerEdge servers reduced footprint
by half. Emerson reduced all the data centers down to four and eliminated
about 3,600 servers in the process. Because of the new servers, the com-
pany’s new global production center in St. Louis lowered its energy use by
31 percent. In addition, the IT department expects to decrease the operating
costs of its Windows server environment by 15 percent a year.
PACCAR, a $7.6 billion transportation company that manufactures
premier truck brands, had nearly 1,000 servers split among several global
locations with 15 percent to 25 percent annual growth. The company had
to put considerable resources into maintenance, which diverted attention
and resources from innovation. PACCAR hired Dell Global Infrastructure
Consulting Services to help develop a simplification plan using Intel Xenon-
powered Dell PowerEdge 2950 and 6850 servers, with VMware running 15
to 20 virtual machines on each server, and Dell/EMC CX700 storage area
networks. Consolidation reduced the number of servers by half, and the cost
of each virtual server is about half that of a physical one, but the real advan-
tage to PACCAR came from improved IT efficiency. For example, the SAN
systems dropped application recovery time from five hours to 20 minutes.
The IT department can now create a virtual test and development environ-
ment in a few minutes. And virtualization now makes it possible to provision
resources for a new application in about 20 minutes.
UBM WHITE PAPER | Data Center Efficiency in the Virtual Era: Three Key Steps
The second is the potential of future incom- Server Utilization Before and
patibility with emerging standards. Unless the After Virtualization
proprietary vendor embraces the new tech- X86 Servers
nologies, companies may find themselves unable
to use them. New capabilities that could further 80
simplify IT operations or systems administration
would be incompatible with the proprietary 70 67%
infrastructure.
60 56%
The third problem is cost. Open systems
drive down cost because of competition. Closed
50
systems leave a company at the mercy of the
vendor as well as of employees with highly spe- 40 36%
cialized experience, consultants, and third party
software firms that provide scarce goods and can 30
charge accordingly. That increases budget rather
20
than reducing it and freeing money for other
uses. To truly simplify, corporations must pick
10
technology that preserves flexibility and options.
0
9 Incremental Virtualization Utilization Utilization Planned
Before Today in Two
Before virtualization, companies typically
Virtualization Years
achieved only 36 percent utilization, accord-
ing to information IDC’s Turner presented in N=258 Source: IDC Virtualization Multiclient Study
3
Johnston Turner, Mary. Automation and Integration Vital for Efficient Data Center Operations, IDC White Paper, April 2010.
UBM WHITE PAPER | Data Center Efficiency in the Virtual Era: Three Key Steps
80
70
68.6
65.1
59.4
60
51.3
50
42.1
(%)
40
33.0
30
22.4
20 13.9
8.7
10
0
2005 2006 2007 2008 2009 2010 2011 2012 2013
10
to repeat the process in another part of the expenses. Even more importantly, building on
infrastructure. Not only does this incremental open, standard technologies allows them to
approach allow a company to work within its preserve and even expand choices in how to run
budget and resource limits, but it also lets the their business.
company start with the most receptive operating The built-in scalability and flexibility offered
silos and, over time, bring pressure to bear on by a standardized, simplified data center infra-
less receptive ones. structure enables IT to respond quickly to business
needs and enables the enterprise to take advan-
Simply Efficient tage of changing opportunities. Furthermore,
Enterprises that approach simplification with the simplification prepares the business to make
rationalization, consolidation, and virtualization the most of automation. Read how in the final
approach in mind can free resources and reduce installment of this series.
Intel (NASDAQ: INTC), the world leader in silicon innovation, develops technologies, products and initiatives to con-
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