Data Center Consolidation

Data Center Consolidation With computers spread across the enterprise, and the number of networked databases and applications growing at an exponential rate, the challenges of efficient networking, data sharing and systems management become increasingly complex. Consolidation provides an often-used approach to bring together such dispersed applications, databases and information technology (IT) services into a smaller number of data centers. The potential benefits of consolidating multiple data centers include: Improved and more effective management. Lower total cost of ownership (TCO). More efficient utilization of hardware, software and personnel. Improved service levels and systems availability. Reduced floor space requirements and costs. Consolidation involves several steps, ranging from high-level consideration of business goals to detailed tactical planning of specific tasks. Consolidation processes can be, and often are, quite challenging and complex for any enterprise. The larger or more aggressive the consolidation effort, the more risk associated with the effort. This article addresses tips and techniques to help organizations grasp some of the issues, risks, controls and processes surrounding data center consolidation. Preliminary analysis and strategy While some organizations are able to achieve data center consolidation as a single event, most organizations approach consolidation in stages. The larger and more complex the environments involved, the greater the likelihood that multiple or interim consolidations may be required to achieve the desired ultimate goal. Some common consolidation stages are: 1. Consolidation of the physical IT components that support business processes at many locations into a fewer number of components at their existing respective locations. 2. Consolidation of IT components at multiple locations into a single or fewer number of physical locations. 3. Increased sharing of IT infrastructure and peripheral components (e.g., networks, storage, etc.) among independent processing platforms at the single location, eliminating redundant infrastructure and peripheral components. 4. Consolidation/integration of hardware, software and infrastructure at a single location to reduce the number of individual components, optimize performance of the remaining components, improve management processes, and take advantage of economies of scale to reduce TCO. However, before starting the above processes, organizations should develop a preliminary consolidation analysis and strategy, which provides a starting point, a road-map, consensus on the direction and timing for this effort, and some milestones to monitor progress. The need for careful and detailed planning may sound both obvious and simplistic, but it is much easier said than done and if it's not done thoroughly the resulting adverse impacts can sink a consolidation project. When a major transportation and logistics company attempted to consolidate three data centers, they simply moved physical IT assets to a single location, and then spent years unsuccessfully trying to

consolidate and integrate their diverse systems in order to achieve economies of scale. The entire process was painful and expensive. Many problems could have been avoided had they begun with a well-thought-out strategy, which included interim consolidations and a better understanding of the environment, including the initial constraints, which should have been addressed before the consolidation. By contrast, a major regional bank consolidated twelve regional data centers, each having some unique operations practices, into two facilities with minimal disruption and cost. The new facilities were selected and designed with the idea of business continuity in mind, with each site having the ability to serve as the backup for the other. In this case, the organization developed the physical and logical architecture with immediate and clear objectives. Additionally, the planners understood from the outset the need and benefit of merging a dozen different versions of the same software products into a core set of common products. The physical consolidation was followed rapidly by an effort to merge multiple versions of the same banking applications into common systems for enterprise-wide use. This was a very successful project, improving efficiency and reducing cost in a number of areas. Detailed and disciplined project management A large data center consolidation is similar to launching the space shuttle and requires meticulous planning to manage hundreds of interrelated tasks performed by internal as well as external resources. This requires disciplined project management with sophisticated techniques (e.g., Critical Path Method) due to the number of interdependent complex tasks, many of which must take place in a specific sequence. There also needs to be a management oversight function corresponding in magnitude to the size of the organization and complexity of the consolidation. The project also needs to receive sufficient attention, funding and resources to support the project manager. Unless the project process is properly resourced, the project manager will end up with the unpleasant task of playing "catch-up" (often at the last minute), placing the entire effort at risk. A separate fully funded, empowered and qualified project management office for consolidation is highly recommended. Managing impact on service level Regardless of how well the consolidation is planned, it may still impact the level and quality of IT services provided to internal and external users and customers. Some examples of specific areas at risk during a consolidation include: Online response time. Batch turnaround time. Transaction throughput/success. System availability and performance. Network availability and performance. Responsiveness to trouble tickets. Web page-related performance. Output delivery. Responsiveness to change orders. Quality of the customer experience interacting with IT. Organizations need to have good processes, procedures and automated tools to measure and manage these risks before, during and after the consolidation. If these management processes and their associated target service levels, and service management reporting are not already in place, they should be incorporated into the

overall consolidation plan. If the management processes already exist for the environments to be consolidated, the processes may need to be reviewed and updated to meet the demands of the consolidated data center. Failure to meet target service levels and customer expectations poses significant risks (i.e., loss of customer confidence, business and revenue) to the consolidated enterprise. Automated tools to monitor and manage performance, as well as improve service, facilitate the ability to manage the above risks. In large, complex environments, such tools are indispensable to optimize systems and business process performance. Given the large number of tools and techniques available, organizations need to carefully assess their requirements before deploying any automated tools. These deployments of automated tools can be complex efforts in themselves, and need to be coordinated with the overall consolidation effort. Effective IT management processes Consolidations provide a unique opportunity to examine the IT management processes and ask important fundamental questions about IT performance and quality of service. Are IT management functions clearly defined and properly staffed? Are management processes in place for the major IT functions? Are these processes working at optimal levels for the existing environment? Will they continue to work at this level for the consolidated environment? Are the necessary management processes and tools available to manage the consolidated environment in an effective and efficient manner? If current IT management processes are substandard, then creating a larger and more complex consolidated environment will simply leave the enterprise with a bigger problem in a single location. Some examples of specific IT functions and associated management processes that the enterprise needs to have in good working order prior to the consolidation include: Platform management. Application and database management. Capacity planning. Back-up and recovery. Change management. Computer operations. If infrastructure management is not sufficiently mature, the enterprise could fail to achieve the anticipated benefits of the consolidation. Therefore, as a starting point, the organization should assess the current status of infrastructure management at the consolidated facility and determine what enhancements are necessary to support consolidated operations at an acceptable level for IT services. Ideally, any necessary enhancements to fill the gaps should be in place before the consolidation takes place. Additionally, these enhanced processes should look beyond meeting minimum acceptable service levels and seek to improve IT process management and services over time, thereby better enabling the business processes supported by IT. Finally, while assessing the IT management processes the organization should consider whether it makes operational or financial sense to outsource certain functions, and if so, how outsourcing should be coordinated with the consolidation. Comprehensive asset management

Most consolidations are undertaken to obtain the benefits of economies of scale (e.g., better leveraging of human and technical resources) to lower TCO. However, many organizations never achieve the cost-savings projected as a result of consolidating IT assets. Managing IT assets can be extremely complex and unless the organization has asset management processes and appropriate automated tools, they are doomed to fail. Some examples may help clarify this. The enterprise will need to know what hardware they own or lease and the financial arrangements for the hardware so they can make cost-effective decisions about configuration (e.g., Retain existing, merge or upgrade hardware? What are options for load balancing for more economical utilization?, etc.). The same holds true for software (e.g., Are software products licensed to specific CPU's? Is software transferable to a different release of the operating system or a larger server without a re-licensing fee? Can duplicate copies of software be eliminated? Are more advantageous licensing arrangements available for the system's configurations associated with the consolidated facility?, etc.). The project team will face hundreds of asset-related choices. Therefore, from the outset, they must know exactly what they have today and what will constitute the "consolidated" environment so they can make intelligent business decisions related to the acquisition or disposal of IT assets. Without proper asset management, resources can easily be misguided or unfertilized and economies of scale not realized. As part of asset management, the organization also should examine their various vendor service contracts and identify opportunities to renegotiate these to obtain better pricing for services based on the increased volume of service to be provided at the consolidated site. Manage internal and external expectations The enterprise should develop a communications plan for the consolidation. This may require letters to customers and suppliers at various stages of the consolidation project, and press releases to address any concerns and reassure the investment community. The project team needs to inform all parties in order to manage service level expectations and reputation risk associated with the consolidation. Communications should give all potentially affected groups a "heads-up" about the project, and also send the positive message that consolidation is taking place to better serve customers in the future, as well as improve the strategic position of the organization. The consolidating organization also should inform all parties of any and all specific consolidations impacts. This will allow everyone to prepare for various scenarios, including a "worst case" scenario. Customers and suppliers can plan for change, but no one appreciates surprises. Intellectual capital risk: impact of potentially displaced workers Consolidation has a significant human impact and the enterprise will need to manage this dimension. It is important to make sure that personnel who are necessary for sustaining current operations and supporting the consolidation do not leave. At the same time, the team may need to be vigilant to make sure that remaining employees do not take out consolidation-related frustrations through sabotage. To address these issues the organization should create a focal point to manage organizational change and organizational readiness as part of the consolidation

effort. This should be done very early in the planning process since as soon as anyone even breathes the word consolidation, uncertainty about employment starts to impact personnel, including employees who may be critical to executing the consolidation and managing the new environment. There is a real risk that resources are going to be walking out the door when they are needed the most, placing the consolidation and the merged facility at risk. Management may consider incentives to make sure the skills necessary for success are not lost. Successful organizations are the ones that address this issue head-on and inform their personnel about the consolidated staffing plan as soon as possible, resulting in a basis for trust to effectively manage personnel transition. Some of the documentation necessary for the consolidation may exist only as "collective knowledge" in the heads of key personnel. The organization needs to perform an assessment to make sure that all documentation describing how the various components in the data centers are actually put together is current and complete. The objective should be to avoid nasty unexpected surprises because documentation did not address the full impact of a change and the person with the necessary information had already left the organization. In one instance, an organization had to track down an employee who had left on good terms several years prior to the consolidation to help fix systems problems since there had been no previous documentation or knowledge transfer. Security considerations Security and privacy risks also may arise during the consolidation. The enterprise will need to make sure that security objectives and requirements are not diminished or set aside during or following the consolidation. This will require a good handle on logical access controls to ensure that access is consistent with users' business needs. For example, employees who are to be displaced or redeployed as a result of the consolidation should have their access promptly removed. Additionally, the consolidation team should be aware of local legal constraints on privacy and security. For example, there may be some regulatory issues if the client plans to move data from the European Community to the United States as part of the consolidation. Business continuity The logistics of the consolidation will require the movement or cut-over of processing from one location and possibly from one set of supporting hardware, software and network components to another. This presents a significant business continuity risk. The enterprise must have a back-up and back-out plan to address a scenario where the cut-over is not successful and production processing cannot be performed at the new location. Similarly, they should have a post-consolidation review to verify the integrity of processing in the new environment. The overall disaster recovery and business continuity plans also will need to be updated to reflect the requirements of processing at a new consolidated site. If the organization now has one site, this creates the "all-eggs-in-one basket" situation, which is high risk and also needs to be addressed. Network-related risks One of the consolidation areas that requires the greatest amount of lead time involves networks. The organization needs to make sure that its network architecture supports their consolidated hardware/software environment as well as business needs as articulated in the performance- and capacity-related service level agreements. This architecture needs to be developed and validated before the

consolidation takes place. Other tactical changes that involve complex technical issues and need special attention are: equipment relocation, provisioning of new or expanded services and lines, routing changes, connectivity compatibility issues and network infrastructure management. This includes networks security, since a new network security architecture will need to be developed for the consolidated environment. If an organization has international operations, network security will need to take into account relevant local laws. For example, some countries have laws restricting the use of encryption and the transmission of personal data. The intricate nature of networks warrants significant analysis and sufficient lead time. Some other considerations Specific business and technology considerations, unique to each organization, raise other challenges that must be identified and addressed since these may detract from the operational and financial benefits of consolidation: Regulatory issues may preclude total integration. For example, consolidations due to the business acquisitions may require an organization to maintain separate application environments due to some antitrust issues. Organizations that, for valid business reasons, need to run different versions of the same software may not be able to undergo complete consolidation. For example, a company running two slightly different versions of an ERP package may not be able consolidate servers if one version is not certified to run on the operating system used by the other version. Consolidation of a global organization may present challenging cultural considerations. Language issues are just one example. Even in technical disciplines there can be problems. In one instance, the U.S. technical team referred to systems components using what they thought were commonly recognized acronyms. Their non-u.s. counterparts were embarrassed to admit that they were not familiar with the term and did not ask for clarification. The net result was a substantial amount of lost time and effort on consolidation activities. Cultural issues may also exist at the corporate level among data centers located in the same country due to differences in organizational and management style, which impact consolidation activities. Bottom line, there are many cultural dimensions that can impact both cross-border and corporate consolidations and the enterprise needs to be sensitive to these. Conclusion Despite the complexity and challenges of data center consolidation, these efforts provide businesses with significant opportunities to both reduce cost and improve performance. The key critical success factors revolve around planning and coordination of the consolidation event, and the implementation of management processes to optimize the consolidated environment. Truly successful consolidations are able to translate the cost and operational benefits to enable business process and improve the quality of both internal and external customers' interaction with the enterprise. This provides a win-win solution for the business and its customers. The Ivy Consulting Group, Inc. 16311 Magellan Lane Huntington Beach, CA 92647 www.ivyconsult.com 714-847-2915