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When Five Minus Four Costs Three The Hidden Costs of Data Center Consolidation

David DeWitt, Senior Consultant, Galorath Inc.,

Michael J. Dunbar, Independent Technology Consultant

It sounds so simple.  Shut down two or three data centers and consolidate them into one virtualized, cost efficient facility, then watch the savings role in… if life was only that easy!

For most companies, the incentive for data center consolidation is the shear cost of maintaining multiple facilities.  Power, networking, and staffing for each center are often the first consolidation considerations. But migration also becomes a necessity when companies outgrow or over power existing facilities or has acquired another company.  Trying to streamline multiple compatible systems and reduce redundancy (equipment and processes) becomes a priority. And so should taking a moment to recognize some hidden cost of that consolidation.

Let’s start with the most common reason to consolidate, Scalability.   This is often a factor that is underestimated and underpriced.  The driving force is that equipment has become archaic and unable to support the growing demands.   But, can a simple networking and power upgrade be performed without major prohibitive costs? While the footprint is less a concern than previous years due to newer equipment designs, and the ability to collapse several machines into one with virtualization, it’s still essential to eliminate or consolidate duplicate processes and systems.  Failure to remove redundant process can vastly defeat the benefit of consolidated hardware. Bad practices are still bad practices – albeit more efficient – but bad – and costly.

Optimization of a datacenter is often the underlying goal in migration and consolidation, but it’s not always treated as such.  Too often IT departments have developed internal solutions to shortcomings of the tools they have at hand. These “workarounds” can often become standard procedure because no one has the time to address them.  This should be built into the project scope. Persistent workarounds are much more expensive than a proper solution.

It seems logical that if the capability of five servers or networks can be consolidated into one via Virtualization then the savings will roll in.  “This one was the low hanging fruit because of the real potential to save on capital expense,” says John Sloan, lead analyst at Info Tech. “but …managing a consolidated and virtualized infrastructure is more complex.”   With more complexity comes more cost. Additionally, the benefit of having several virtual machines on one piece of hardware generates a risk of a single point of failure – not to mention Security risks. “How difficult would it be to pick up and walk out of your shop with one box?” adds Sloan.

Housekeeping is often the toughest part of the consolidation and migration effort – especially to price.   The goal is to minimize cost by eliminating servers and/or storage that are no longer used or to collapse them into another server or storage array that can handle the extra weight.   This means there is stuff that’s no longer needed; try to sell that to disparate users. Often, the capabilities are the same or similar, but stakeholders will be resistant to move towards one or another.  If they don’t, you fail. Price that.

The latest buzzword around boardrooms is “The Cloud.”  Cloud providers pride themselves in high-availability and redundancy, the latter of which can be a real challenge for smaller companies that don’t have the means to maintain their own disaster recovery site.  Sounds great, yet aside from security, some others issues you may encounter include (as discovered in a quick web search): Assured access, browser compatibility, host financial and platform stability, and legal issues such as jurisdiction over data location; to name a few.   “The Cloud is just another implementation of architecture. Use it when it makes sense,” says Mike Kavis of the Social Computing Journal. He also defines Cloud Insanity as “To repeat the same behaviors that caused SOA to fail and expect a different result.” Are you?

Application hosting can be a real money and time saver for IT Departments.  Vital systems that previously required installation on a desktop machine can be easily and seamlessly delivered using Citrix or any other thin-client technology.   This can free up IT staff from troubleshooting problems on hundreds of machines to perform more critical tasks. From a migration and consolidation perspective this can make the move much easier; unless, of course, it’s an application with a particularly large graphical and memory footprint like a video editing application. These applications can be hosted remotely however performance can suffer and quickly become a negative for the end user community. Not all applications are equal.  It’s expensive to assume they can all be migrated equally.

Calling the experts is regrettably, for many organizations, a cost that must be considered.  Companies often underestimate the level of difficulty for configuring and using virtualization, application hosting, and data migration tools.  It only takes a couple of failed attempts before you seek out help anyway, why not get the experts involved at the beginning, it will most certainly save man hours.   Hiring consultants and contractors to fill labor gaps may also be necessary. If IT Staff is dedicated to the migration project, temporary staff can assist in handling daily maintenance and other duties during the migration.  Assuming it can all be done in house is not only costly, it’s frightfully foolish!

The list can go on.  But seven flares should be enough to warn any company venturing into a data center consolidation, especially smaller multi-location companies, that there are lots of hidden costs.  The best due diligence is to discover what costs are less obvious, but more critical, and ultimately more expensive. Just because it seems logical to go from five to three, or three to one data centers, it’s certainly not linear, nor that simple.

David DeWitt is a Senior Consultant at Galorath Inc. and a prolific contributor on Software Cost Estimation topics.  He can be reached at [email protected].

Michael J. Dunbar is a world traveled and seasoned IT consultant who has witnessed firsthand the perils of data center consolidation. He can be reached at [email protected].

References cited:

Should you Virtualize Your Data Center, Experts Weigh In, Pro & Con, Rod Scher, PC Today, January 2001 edition, Vol 9 Issue 1

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