In the face of organisational budgetary cuts, there are seven effective ways organisations can reduce costs in the data centre during a 12- to 18-month period, according to Gartner, Inc.
"While responding to contracting budgets, IT managers are expected to deliver an ever-increasing level of service to users, and many are charged with showing tangible financial savings as part of cost-cutting measures," said Rakesh Kumar, research vice president at Gartner. "Significant savings can be made in the data centre. For example, removing a single x86 server will result in savings of more than $400 a year in energy costs alone."
Gartner has identified seven important ways to cut data centre costs:
1. Rationalise the Hardware
Hardware rationalisation will result in savings in several areas. First, it will help with asset and inventory management and provide a clear picture of the boxes that are being used effectively and those that are not. Second, server rationalisation should lower maintenance and support charges. Third, server rationalisation will lower energy costs, typically more than $400 per server, per year. Finally, hardware rationalisation projects usually yield savings of 5 per cent to 10 per cent of the overall hardware costs, when measured post project.
2. Consolidate Data Centre Sites
Most organisations still have multiple data centres for their IT operations, ranging from large complex installations to small machine rooms. Consolidating these multiple sites into a smaller number of larger sites will often result in financial savings. Such economies go beyond real estate savings and include getting rid of redundant IT assets, software, maintenance and support, and disaster recovery contracts. While these projects often result in reducing the number of data centre operational staff needed, Gartner advises users not just to get rid of people but to retrain them to fill skill gaps in other parts of the data centre or wider IT organisation. Site consolation can typically result in savings of between 5 per cent and 15 per cent of the overall data centre budget.
3. Manage Energy and Facilities Costs
Energy costs are rising for most data centres because the energy consumption of the underlying hardware continues to increase as new technologies, such as blade servers, are more widely used. As floor space runs out, more hardware is crammed into the space, thus requiring higher levels of cooling. Gartner recommends employing the following tools and techniques to manage the energy cost curve: raise the temperature of the data centre to 24 degrees Celsius to reduce the level of cooling required; use outside/free air as an alternative to expensive air conditioning; use hot aisle/cold aisle configurations, blanking panels and economisers; and use server-based energy management software to run workloads in the most energy efficient way, such as taking advantage of lower energy tariffs.
4. Renegotiate Contracts
Data centre managers must work with finance and procurement teams to revisit all hardware, lease, software, maintenance and support contracts. In some cases, it may be appropriate to terminate a contract because it's too expensive, while in others, new terms and conditions may secure a lower payment schedule. Vendors are used to reviewing contracts during downturns.
5. Manage the People Costs
People costs still form the largest single cost element for most data centres, sometimes running as high as 40 per cent of the overall costs. Gartner advises users to review staffing levels and the types of skills needed for the next 24 months and to make maximum use of labour arbitrage benefits by using skills in regions with cheaper labour rates, such as India, Brazil, Poland and Romania.
6. Sweat the Assets
Delaying the procurement of new assets should be considered a necessary step for all data centre managers. Upgrading based purely on the book value could incur unnecessary costs earlier in the life cycle. This may result in a performance disadvantage and possibly an energy use increase but will defer the capital expense of a new acquisition. Users should negotiate on maintenance and support costs in such instances, as well as ensuring that software is still supported on servers whose working life is being extended.
7. Virtualisation
Virtualisation of hardware should be encouraged to improve operational efficiency, as well as to support consolidation, decommissioning and cost management programmes. For most users, the net benefits will include a smaller hardware estate, which, in turn, will mean lower operating depreciation costs and less-expensive maintenance and support. Virtualisation is also a good way to control energy costs. Although virtualisation requires license and project costs, users can expect to see net savings within 24 months, and the effective use of virtualisation can reduce server energy consumption by as much as 82 per cent and floor space by as much as 86 per cent.
Additional information is available in the Gartner report "How to Cut Your Data Center Costs." The report is available on Gartner's website at http://www.gartner.com/....
Gartner analysts will discuss the key issues for the data center during the Gartner Data Center Conferences taking place October 5-6 at the Royal Lancaster Hotel in London, and December 1-4 at Caesars Palace in Las Vegas. The event provides data center professionals with real-world perspectives and strategies to transform their data centers. Additional information for the event in London is available at http://www.gartner.com/..., and more details for the Las Vegas event are at http://www.gartner.com/.... Members of the media can register for the London Summit by contacting Laurence Goasduff at laurence.goasduff@gartner.com. For the Conference in Las Vegas, reporters can register by contacting Christy Pettey at christy.pettey@gartner.com.
"While responding to contracting budgets, IT managers are expected to deliver an ever-increasing level of service to users, and many are charged with showing tangible financial savings as part of cost-cutting measures," said Rakesh Kumar, research vice president at Gartner. "Significant savings can be made in the data centre. For example, removing a single x86 server will result in savings of more than $400 a year in energy costs alone."
Gartner has identified seven important ways to cut data centre costs:
1. Rationalise the Hardware
Hardware rationalisation will result in savings in several areas. First, it will help with asset and inventory management and provide a clear picture of the boxes that are being used effectively and those that are not. Second, server rationalisation should lower maintenance and support charges. Third, server rationalisation will lower energy costs, typically more than $400 per server, per year. Finally, hardware rationalisation projects usually yield savings of 5 per cent to 10 per cent of the overall hardware costs, when measured post project.
2. Consolidate Data Centre Sites
Most organisations still have multiple data centres for their IT operations, ranging from large complex installations to small machine rooms. Consolidating these multiple sites into a smaller number of larger sites will often result in financial savings. Such economies go beyond real estate savings and include getting rid of redundant IT assets, software, maintenance and support, and disaster recovery contracts. While these projects often result in reducing the number of data centre operational staff needed, Gartner advises users not just to get rid of people but to retrain them to fill skill gaps in other parts of the data centre or wider IT organisation. Site consolation can typically result in savings of between 5 per cent and 15 per cent of the overall data centre budget.
3. Manage Energy and Facilities Costs
Energy costs are rising for most data centres because the energy consumption of the underlying hardware continues to increase as new technologies, such as blade servers, are more widely used. As floor space runs out, more hardware is crammed into the space, thus requiring higher levels of cooling. Gartner recommends employing the following tools and techniques to manage the energy cost curve: raise the temperature of the data centre to 24 degrees Celsius to reduce the level of cooling required; use outside/free air as an alternative to expensive air conditioning; use hot aisle/cold aisle configurations, blanking panels and economisers; and use server-based energy management software to run workloads in the most energy efficient way, such as taking advantage of lower energy tariffs.
4. Renegotiate Contracts
Data centre managers must work with finance and procurement teams to revisit all hardware, lease, software, maintenance and support contracts. In some cases, it may be appropriate to terminate a contract because it's too expensive, while in others, new terms and conditions may secure a lower payment schedule. Vendors are used to reviewing contracts during downturns.
5. Manage the People Costs
People costs still form the largest single cost element for most data centres, sometimes running as high as 40 per cent of the overall costs. Gartner advises users to review staffing levels and the types of skills needed for the next 24 months and to make maximum use of labour arbitrage benefits by using skills in regions with cheaper labour rates, such as India, Brazil, Poland and Romania.
6. Sweat the Assets
Delaying the procurement of new assets should be considered a necessary step for all data centre managers. Upgrading based purely on the book value could incur unnecessary costs earlier in the life cycle. This may result in a performance disadvantage and possibly an energy use increase but will defer the capital expense of a new acquisition. Users should negotiate on maintenance and support costs in such instances, as well as ensuring that software is still supported on servers whose working life is being extended.
7. Virtualisation
Virtualisation of hardware should be encouraged to improve operational efficiency, as well as to support consolidation, decommissioning and cost management programmes. For most users, the net benefits will include a smaller hardware estate, which, in turn, will mean lower operating depreciation costs and less-expensive maintenance and support. Virtualisation is also a good way to control energy costs. Although virtualisation requires license and project costs, users can expect to see net savings within 24 months, and the effective use of virtualisation can reduce server energy consumption by as much as 82 per cent and floor space by as much as 86 per cent.
Additional information is available in the Gartner report "How to Cut Your Data Center Costs." The report is available on Gartner's website at http://www.gartner.com/....
Gartner analysts will discuss the key issues for the data center during the Gartner Data Center Conferences taking place October 5-6 at the Royal Lancaster Hotel in London, and December 1-4 at Caesars Palace in Las Vegas. The event provides data center professionals with real-world perspectives and strategies to transform their data centers. Additional information for the event in London is available at http://www.gartner.com/..., and more details for the Las Vegas event are at http://www.gartner.com/.... Members of the media can register for the London Summit by contacting Laurence Goasduff at laurence.goasduff@gartner.com. For the Conference in Las Vegas, reporters can register by contacting Christy Pettey at christy.pettey@gartner.com.
