Data center consolidation restructures your IT costs for ... · 2. Data center consolidation restructures your IT costs for continued growth. Executive summary. Cost reduction. It’s

IBM Global Technology Services

Thought Leadership White Paper

November 2010

Data center consolidationrestructures your IT costsfor continued growthNew discovery tools determine logical and physical movedependencies to help limit risk

2 Data center consolidation restructures your IT costs for continued growth

Executive summaryCost reduction. It’s in our blood. It helps us get through thetough years, and it helps us increase profits during the goodyears. Reducing costs is always a smart strategy because amore operationally efficient data center can provide the foun-dation for the future growth of the enterprise.

Many CIOs and IT managers may be reexamining their datacenter portfolios and restructuring them for growth. Some arelikely focused on contraction of the portfolio to reduce costs;others may view efficient expansion or new data centers askeys to success.

So it comes as no surprise that many CIOs view consolidationto a central technology organization as the future model fordata center operations. Centralized infrastructures andprocesses enable shared services optimization that, in turn,provides economies of scale to cut costs and increase thereturn on IT investment. When considering how to derivegreater ROI from IT, a significant majority of the 2,500 CIOswe surveyed—75 percent—anticipates having a strongly cen-tralized infrastructure in five years.1

This paper describes the challenges infrastructure managersface when relocating data centers, the tools available fromIBM research to help lessen the business risk of the move, and

the services that IBM provides to plan and execute the moveof applications, data and IT equipment from one data centerto another data center, locally or across geographies.

Consolidation can drive down bothstrategic and tactical costsIn our work with some of the largest business enterprises inthe world, IBM has found that between 10 percent and15 percent operational savings are possible for each data cen-ter consolidated, depending on how many sites we consolidateand certain other factors.1

Data center consolidation helps providestrategic and tactical cost savings.

The data center portfolios of many companies have grown significantly through mergers, acquisitions and geographicexpansion—external forces that will continue to affect the ITinfrastructure. In this environment, data center consolidationis designed to provide strategic cost savings, reducing highinfrastructure costs by relocating away from expensive datacenter leases or ineffective locations. Tactically, consolidationcan improve operational efficiencies, reduce the assets man-aged and improve resource utilization.

3IBM Global Technology Services

IBM’s own consolidation experience bears this out. In the10 years from 1997 to 2007, IBM consolidated the total num-ber of data centers used to manage our own business from 235 to 12 in all geographies, consolidated from 31 differentnetworks to one globally managed network, and reduced the number of deployed applications from more than 15,000 to just 4,700. The operational cost savings has totaledUS$1.5 billion over the past five years.1

Restructure to growThe cost savings provided by data center consolidation areattractive by themselves. This is especially true when you con-sider IBM research that indicates that as much as 70 percentof IT budgets is spent on maintaining existing environments.2

But consolidation is more than just a cost-saving measure; it isa strategic initiative that allows IT managers to achieve opera-tional efficiencies while reducing the amount of time theyspend managing the ongoing technology environment so theycan focus more on applications development and other strate-gic projects.

This is an important shift in where time is spent because oursurvey found that today’s CIOs spend an impressive 55 per-cent of their time on value-enhancing activities, such as creat-ing and generating buy in for innovative plans, implementingnew technologies and business initiatives, and managing non-technology business issues.1

It’s a good time to move—but not byyourselfCompetitive companies know that now is the time to restruc-ture their data center portfolios to support business growth.Yet application availability must also be maintained in a cost-effective manner during the migration.

You also have to consider whether your IT staff has any significant experience in application and data migration andwhether your staff is current on the latest planning and imple-mentation techniques. Tasks such as provisioning new serversor managing tape drives are part of the day-to-day operationsof a data center. Data center consolidations or relocations,however, are major events that require specialized knowledgeto make them go smoothly, provide desired benefits and mini-mize the impact to your business.

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Dat

a ce

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exp

ense

s

Network costs

Labor costs

Utility costs

IT infrastructure

Infrastructure upgradesGive back to business,

enable business expansionor improve service quality

Transformation costs

Real estate costs

Network costsLabor costsUtility costs

IT infrastructure

Infrastructure upgradesReal estate costs

Figure 1: Consolidation can yield both strategic and tactical cost savings.


IBM IT Facilities Consolidation and Relocation Services –data center consolidation and relocation migrates applications,data, and IT equipment between data centers while helping toreduce risk and provide a seamless transition for end users byfacilitating your ability to:

● Move dependent applications and equipment together● Meet critical application availability requirements by using

specialized data migration techniques● Reduce cost and improve operational efficiencies by helping

to centralize your IT environment● Limit risk by leveraging your organization, experienced

IBM relocation practitioners and third parties● Allow IT operations to focus efforts and resources on more

critical operational areas

This service provides the planning and execution of moves ofapplications; data and IT equipment, such as servers and stor-age arrays; and the data center infrastructure, such as racks,power systems and cooling systems. These moves can help youmove within a data center, from one data center to anotherdata center or across geographies.

Data center consolidation drives application growthA major global bank needed to reduce time to market fornew applications, optimize its existing workloads across36 data centers and reduce its overall costs while improv-ing resiliency and security. With the help of IBM, the bankconsolidated those data centers into one production andone business continuity and recovery services center. IBM also helped establish an enterprise command centerto manage and control all of the bank’s data center operations.

With consolidation, the bank achieved US$180 millionannual operational cost savings with a security-rich envi-ronment and 99.95 percent availability. Moreover, the com-pany improved its time to market for new banking servicesin core banking, commercial lending and Internet banking.Consolidation meant that the bank’s IT managers couldnow focus their staff and resources on developing newapplications to drive revenue growth. By restructuring itsdata center portfolio, the bank is now well positioned and among one of the 20 global banks based on marketcapitalization.


Help ensure a seamless, low-riskmigration for end usersIf you’ve made the decision to migrate a data center, you real-ize that a move is more complex than simply physically relo-cating a few servers from one location to the next. You have tothink about the risks to the availability of data and applicationsduring the move. Depending on the industry, the revenue costof a single application outage could run from the hundreds ofthousands of dollars to millions of dollars—per hour. You haveto be confident that your migration strategy can anticipate andavoid these crippling unplanned outages.

Consolidation and relocation help drivedown cost—but end users don’t want toknow they have been moved.

And your customers—internal or external—have decreasingtolerance for downtime in accessing their essential applica-tions, even for planned events such as migrations. Acceptableapplication outage windows—the amount of time and fre-quency an application may be unavailable—are getting shorterand shorter. Long outages to migrate data center equipmentare simply not an option.

A three-phase methodology for successfulmigrationsIBM has developed a three-phase approach to migrating appli-cations and equipment that helps ensure that all elements ofthe project are managed successfully.

Figure 2: A three-phased migration methodology helps ensure that detailsare covered.

Assessment discovery Transition plan Implementation

Document steps for a flawless execution

• Identify critical application availability requirements• Document inventory of data, applications and IT equipment• Identify physical and logical dependencies• Determine migration approaches to meet availability requirements• Assess skill and resource requirements

Determine how to execute to reduce risk

• Select migration approach optimizing for risk, cost and schedule to meet availability objectives• Develop risk mitigation strategies and plans• Develop plans to fix unsupported environments• Develop detailed migration and fall back plans

Rehearse and implement the move plans

• Remediate unsupported environments for the move• Rehearse move day and fall back plans• Migrate data on-line almost instantaneously to meet application availability requirements• Implement a move day command center• Execute migration plans• Document Lessons Learned

Assessment discoveryThis phase is intended to document steps for a successful exe-cution to identify critical application availability requirementsand inventory the data, applications and IT equipment.Physical and logical dependencies are determined to makesure that applications and their equipment come down andmove together.

Affinity groups that are applications, data and equipment withsimilar characteristics and business requirements are identi-fied. Multiple affinity groups are then moved together, reduc-ing project cost, time and business impact.

With the application dependencies revealed, the IBM teamwill develop possible migration approaches that satisfy budgetrequirements and time constraints outlined by the client. TheIBM team will also develop a top-level expense estimate aswell as skill and resource requirements.


The output of the assessment discovery phase is a projectreview and recommended decision to progress with the migration.

Transition planDuring the transition planning phase, IBM determines thebest path to execute migration with minimal risk. IBM makesrecommendations on migration approaches to select a finalapproach to reduce risk and optimize cost and the projectschedule.

Ensuring that applications move successfully within predefinedoutage windows is more complex than you might expect.IBM will build an experienced team with the right platformarchitecture and relocation project management skills toreduce business and technical risk.

After you decide on the approach, IBM finalizes detailedmigration plans and updates expense estimates, if necessary.The output of the transition plan is a detailed planning,budget and timeline document that is ready for implementation.

ImplementationIn the implementation phase, IBM rehearses and then implements the move plans. This can take anywhere from afew weeks to several months, depending on the nature of theproject. Before the move, we develop plans to remediateunsupported environments and rehearse move and fallbackplans in order to identify and resolve potential issues. Weestablish a move day command center to address unforeseenissues. All are key elements of a comprehensive plan.

IBM provides project management teams with the skills andresources necessary to meet your project objectives while atthe same time managing expenditures to initial financial estimates.

After the implementation is complete, a post-project reviewdocuments the lessons learned to help plan future data centerprojects and support daily operations.

Safely migrate to a new data center in only four monthsA waste disposal company that serves more than 600,000 residential and 60,000 commercial customers inmore than 50 communities needed to implement a newdata center and then safely migrate IT equipment quicklyand safely. IBM Global Technology Services helped thecompany build an energy-efficient, scalable and resilientdata center and relocated its equipment from the old location in only four months. As part of the project,IBM helped define requirements, scout locations, designand implement the new data center, and then safelymigrate data and applications without any unplannedservice interruptions.

At completion, the company had a future-ready data cen-ter scoped, designed and delivered by IBM. It gives theclient improved availability through enhanced redundancy.The expanded data center capacity supports a doublingof the client’s business. And it reduces operating costs upto 20 percent through improved efficiency. The clientreported that “after the move, a number of users cameback and said this project seemed like it was flawless andwent just like we told the users it would go.”


Leverage IBM research innovation toidentify critical dependenciesOur experience has shown that client inventories are generally70 - 90 percent accurate based on performing manual inter-views, but to plan a major relocation requires a more accurateinventory. Performing manual inventories is time consumingand expensive, and the information obtained has a limited use-ful life. To combat these challenges, IBM uses a discovery toolto improve the equipment and application discovery process tohelp ensure a seamless relocation with reduced risk.

Applied mathematics can help ensure aseamless migration

Working with IBM Research, we created the analytics for alogical dependency mapping tool, which applies advancedmathematical modeling to map application and server depend-encies. This can help us to identify up to 100 percent of theserver, storage and application assets which need to be moved.The example shown in figure 3 illustrates the associations withan IT environment as small as 27 servers—you can imaginethe complexity in a larger enterprise environment.

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Host: wcchp01

Host: ws390a2.pgh.ibm.com

Host: xas001.rchland.ibm.com



Figure 3: Analytics for logical dependency mapping tool for 27 servers


Leverage IBM’s discover tools to better understand theIT infrastructure before relocationA large financial services institution was planning a moveand needed to better understand the environment—especially the 700 Wintel servers and over 400 criticalapplications deployed on all the platforms.

They were able to reduce the time to understand thedependencies between applications and servers by 50 percent (as compared to manual methods) using IBM’s discovery tool, analytics for logical dependencymapping. The tool helped them to reduce risk and costsby identifying areas of the IT environment that needed tobe remediated before the move, such as unsupportedenvironments or operating systems. Through more insight-ful understanding of the logical dependencies, plannerswere able to move equipment and applications withoutdisruptions, as well as identify and fix a key single point offailure in a critical application.

This discovery tool is a set of server side scripts that automati-cally discovers equipment connections over networks, systemssoftware, middleware and applications. It is a simple and trans-parent shell/VBE script that you run on your servers withoutrequiring IBM-specific skills or IBM access to the systems.The script creates a data file for each server, which is thencombined with other server data files, creating a graphicdepiction of your entire IT environment that identifies logicaldependencies. This automated process using the tools helpsreduce the time required to inventory the equipment by up to10 - 15 percent, is less costly than manual efforts and avoidsthe risk of missing up to 10 percent of the physical assets.

Once the environment has been identified, IBM Researchdeveloped algorithms are used to identify the dependenciesand recommend affinities. This dependency mapping is shownin figure 4, where the algorithms look for relationshipsbetween what was discovered in the inventory. Minimum-cutgraph algorithms are then applied to recommend what has tomove together to meet application availability requirements—thereby helping to reduce the risk of not moving the rightservers and applications together. Having an electronic model of the inventory allows us to work with you to quicklyevaluate affinity grouping scenarios to provide a plan for acost-effective move based on your business operations.


Applications with high availability needs are identified and themove recommendation factors in time, distance and costtrade-off to accomplish the move within the availability win-dow. Noncritical data can be migrated online almost instanta-neously to the new data center.

Meet critical application availabilityrequirements to reduce project riskThe inherent risks of migration can be mitigated—if youunderstand the risks and all of the possible issues that mightarise and then use advanced risk mitigation techniques toavoid them. Using the right migration techniques can helpyou address your specific outage window requirements whileoptimizing for project cost and schedule. And the breadth oftechniques you select from will have to encompass all of theapplications and equipment from multiple vendors—goingback many years—that will need to be moved together. Youalso need to carefully plan migrations because moves that arenot performed by qualified vendors could potentially voidyour hardware warranties.

The right migration techniques help bal-ance cost, schedule and the allowable outagewindow.

We work with you to migrate data online almost instanta-neously to meet application availability requirements. Thisallows you to help reduce expenses by using the more costlymethod for only the most critical applications and protectsfrom outages due to physical data transportation.

Starts with unknown

InventoryRelationshipDiscovery

MaximisePacking

Results in three relocation groups

Minimum-Cut Graph Algorithm

Figure 4: Dependency group mapping


Helping avoid service interruptions while migrating to anew data center

A commodities and securities dealer needed to transitionto a new office location without service interruptions. IBM helped the organization implement and migrate to anew, state-of-the-art data center to support more than1,000 traders and 500 back-office users without incurringdowntime that would negatively affect businessprocesses.

Throughout, IBM provided expertise in data center construction and IT relocation processes. We broughttogether a diverse group of internal resources to deliverproject management services, consultancy services andphysical relocation of IT systems and network compo-nents. We helped the company quickly design and build anew large-scale data center and network infrastructure,relocate critical IT components and sensitive data, andmove the existing applications and IT systems. The appli-cations and systems were fully operational by the nextbusiness day with no downtime, and no businessprocesses were affected.

What to do when you’re ready to relocateIBM assembles an experienced relocation team by leveragingyour organization, IBM and key third parties to help reducethe risk of your relocation and ensure a smooth project execu-tion. We have the flexibility to assist you in only those areaswhere you most need help to minimize disruption to ongoingoperations by maintaining key staff on day-to-day support. Wecan also manage the consolidation and relocation activitiesfrom end to end to help ensure maximum accountability.

Professional project management helps youstay on schedule and can scale to addressyour needs.

Consolidation and relocation projects are typically collabora-tive efforts between customers and IBM teams. IBM willassess your internal team’s experience and availability to par-ticipate in the project to determine what IBM resources arerequired. IBM project managers will gain agreement fromstakeholders on project goals, timelines and communicationplans. Professional project management can help you stay onschedule and manage expenses to address your needs.


Next steps to begin a consolidation andrelocation projectConsolidation and relocation projects are significant undertak-ings that can span 6 to 18 months, yet have far-reaching influ-ence on the future of your business. Given this importance, itis essential that you also develop a strategy for initiating aproject and seeing it through to conclusion.

● Identify the executive who will be responsible for therelocation project. CIOs are often the best choice for achampion, but CFOs can be allies when you intend todemonstrate business value.

● Determine the scope of the project and the migrationobjectives. Understand the data center priorities—supporting growth, reducing costs, improving applicationavailability, increasing resiliency—and understand how amigration will affect those priorities. Assemble informationfrom your experts to document the inventory of assets to bemoved, to define critical application availability require-ments and dependencies and to develop risk mitigationstrategies for unsupported platforms.

● Identify skill and resource requirements. Decide whetherany of your existing data center staff can be reassigned tohelp plan and execute the project. Determine whether anyequipment will need to be acquired to execute the move.

● Identify business and technical requirements.Understand which applications are to be given priority.

● Begin developing the project plan. Plan the migrationafter objectives and requirements are clearly understood.

A site and facilities representative from IBM can help youdecide the best approach specific to your data center and yourbusiness environment.

Why IBM?In the recent IBM survey of CIOs, risk management and compliance was cited as the third most important factor insupporting visionary plans to increase competitiveness. Inshort, innovation must be achieved without increasing risk.The same survey indicated that “56 percent of high-growthCIOs use third-party business or IT services, versus 46 percent oflow-growth CIOs,” indicating that companies that make use ofexternal resources are more able to focus efforts on new tech-nologies and new business initiatives.1

Data center consolidation and relocation from IBM can helpyou migrate applications, data, IT and infrastructure withinyour data centers or from one data center to another whilemaintaining your application availability, reducing project riskand meeting project budgets and timelines.

In the past three years, IBM has successfully migrated hun-dreds of thousands of servers and thousands of applications.And remember, we’ve done this for our own systems.

All of this experience offers you the confidence that you canachieve growth while limiting your risk to support innovationsthat increase the competitiveness of your business.

Please Recycle

For more informationTo learn more about the IBM IT Facilities Consolidation and Relocation Services – data center consolidation and relo-cation, please contact your IBM marketing representative orIBM Business Partner, or visit the following website:ibm.com/services/siteandfacilities

Additionally, financing solutions from IBM Global Financingcan enable effective cash management, protection from tech-nology obsolescence, improved total cost of ownership andreturn on investment. Also, our Global Asset RecoveryServices help address environmental concerns with new, more energy-efficient solutions. For more information onIBM Global Financing, visit: ibm.com/financing

© Copyright IBM Corporation 2010

IBM Global ServicesRoute 100Somers, NY 10589U.S.A.

Produced in the United States of AmericaNovember 2010All Rights Reserved

IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation in the United States, other countries orboth. If these and other IBM trademarked terms are marked on their firstoccurrence in this information with a trademark symbol (® or ™), thesesymbols indicate U.S. registered or common law trademarks owned byIBM at the time this information was published. Such trademarks mayalso be registered or common law trademarks in other countries. Acurrent list of IBM trademarks is available on the web at “Copyright andtrademark information” at ibm.com/legal/copytrade.shtml

Other company, product or service names may be trademarks or servicemarks of others.

1 IBM, The New Voice of the CIO: Insights from the Global Chief InformationOfficer Study, September 2009.

2 IBM, Dynamic Infrastructure, Helping build a smarter planet, 2009

SFW03004-USEN-01

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Data center consolidation restructures your IT costs for ... · 2. Data center consolidation restructures your IT costs for continued growth. Executive summary. Cost reduction. It’s