Cost cutter

An increasing number of organisations in the Middle East are consolidating their server environments as they look to cut operational costs and reduce management headaches.

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By  Matthew Southwell Published  October 29, 2002

I|~||~||~|Server consolidation is on the rise both globally and within the Middle East. Data from Gartner Group indicates that while only 45% of organisations were evaluating some form of consolidation in 1998, this figure had grown to 69% by the end of last year. Locally, the recent ACN Unix survey revealed that 19% of the region’s businesses were already consolidating their computing environments, while a further 39% had definite plans to do so.

The common consensus among server vendors is that it is the region’s larger enterprises that are committing to consolidation. “The bigger a company is and the more locations it has, the more important it is for them to consolidate their server environments and centralise data. At the same time, they are looking to reduce costs and ease management headaches,” says Ghassan Bendali, product department manager, Arab Business Machines (ABM).

However, the trend now appears to be working its way down the food chain. Bendali, for example, reports that an increasing number of small-to-medium sized businesses are beginning to consolidate their e-mail, file/print and database servers onto one machine.

“In the past, server consolidation was not particularly popular as you moved down the market. It was seen as something for people running data centres. However, I have seen a shift and people from smaller sized companies are starting to look at it,” adds Johann Muller, product sales & marketing manager, Sun Microsystems Middle East.

Companies that consolidate their server environment can reduce management headaches, cut costs, decrease network bandwidth usage and reduce the physical space needed to house an organisation’s server hardware. As a result of these savings, IT departments are able to add value to the business by improving service and data access levels. They can also start directing their efforts to other projects that help drive the organisation forward.

“There are a number of reasons for looking at server consolidation. Reducing operational costs is important, as is high availability, and both are much easier if you have a consolidated environment. The speed of application deployment also increases in a consolidated environment,” says Michael Paier, manager of system sales, IBM Middle East & Pakistan.

“Most enterprises see the benefits of server consolidation in terms of better management of systems and lower costs. However, consolidation can provide other benefits, such as better security and higher service levels,” adds Gartner Group’s John Phelps.

Mashreq Bank, for example, has just consolidated its server environment to reduce costs and management headaches. “Consolidating the servers helps us save money in terms of licensing and administrative costs… Our administrators also have less servers to manage as they are now only working on six servers rather than 12,” says Murli Nambiar, assistant vice president of the bank’s IT software and services spin off, Mindscape.

||**||II|~||~||~|“Also, because we have consolidated the server environment, the bank can put new e-mail users on the existing server rather than having to buy new hardware,” he adds.

How quickly a company benefits from the savings server consolidation generates and gains a return on investment (ROI) differs from company to company. However, those with a larger server environment appear to be the ones that reap the benefits quickest.

“The savings are different depending on a number of factors. The bigger the company the more savings it will achieve. For example, it will need less software licences and less people to manage it. If it can also scrap separate server locations then the savings will be even greater,” says Bendali.

The rise in server consolidation is also being driven by the growth of partitioning, as it allows a single server to run a number of applications or operating systems from one box. “Partitioning is the key to whether or not your consolidated server set is efficient,” says Charles Ashman, director of product & solution sales, HP. “If you can only partition in very large granular chunks you can’t micro-tune your partitions to suit individual application needs,” he explains.

However, organisations have to select the correct type of partitioning for server consolidation. While software partitioning is a boon for consolidation, hardware partitioning brings fewer benefits because it does not allow the resource sharing the process needs.

“A major benefit of consolidation comes from the ability of multiple systems or applications to share systems resources… However, hardware partitioning does not offer resources sharing because it is implemented on hard physical boundaries,” explains Gartner’s Phelps.

In addition to the growth of partitioning, the development of rack-mounted servers has helped organisations reduce the physical footprint of their server environments and reduce costs. “The introduction of rack servers and blades enables physical consolidation to be undertaken much more easily in terms of space,” says Alastair McFadzean, enterprise business manager, Dell.

“By consolidating desk side and office systems into rack-mounted or blade servers, IT departments can scale up racks rather than have servers scattered around the place. This saves both space and money,” adds Ashman.

Despite the obvious benefits of server consolidation, beginning such a project is often fraught with difficulties. The basis for these problems lies in the different attitudes of the IT department and an organisation’s business units. “Server consolidation can often appear as a threat to jobs in the IT department, and especially the administrators, which is why not all IT departments like to talk about it,” explains McFadzean.

||**||III|~||~||~|However, the likelihood of an organisation sacking IT staff after a consolidation project is small, particularly in the Middle East where IT skills are less than abundant. “It is not about sacking people, but making human resources more efficient and focusing them more effectively,” says Haider Salloum, server marketing manager, Microsoft Gulf.

This has been the case at Mashreq Bank. Now that its IT team no longer spends all of its time managing the bank’s server environment, it is able to embark on other projects. “[The team] are now managing six e-mail servers rather than 12, so the administration time has been reduced. This [time] is now being used to do other things, such as manage other applications and do more desktop support,” explains Nambiar.

Once an organisation has decided to consolidate its server environment, it has to decide how exactly it is going to do it. There are a number of different approaches and each vendor has several variations of its own. However, consolidation can be boiled down to three processes — logical, physical and rationalisation.

Logical consolidation ignores the physical location of servers and instead aims to implement common processes and a standard systems management procedure across server applications. This simple process can bring immediate benefits and make further consolidation easier.

“Logical consolidation does not exist in many companies because they have multi-vendor servers that they have purchased over time. However, if they consolidate around a set of management tools and processes, then the systems become a lot easier to handle,” says McFadzean.

Physical consolidation takes into account the actual location of servers and is designed to reduce the geographical spread of an organisation’s kit. For example, many large organisations within the Middle East have a number of offices spread around the region. By physically consolidating their server environments, they can move their hardware and IT staff to a central location.

“Physical consolidation is all about locating servers in a single location, or in as few locations as possible,” comments McFadzean.

The third consolidation approach is rationalisation, which means implementing multiple applications on fewer, more powerful platforms through partitioning and workload management. In practice, this may be as simple as migrating file/print servers and database servers onto one box.

“What you’ll find is that each department has their own e-mail server and this just doesn’t make sense. At the same time, in many companies each department has its own file/print server and again, this doesn’t make sense. The best thing to do is consolidate them onto one server,” says McFadzean.

||**||IV|~||~||~|Saudi Arabia’s National Commercial Bank (NCB) took this route when it consolidated nine application servers down to one Superdome Unix server from HP. “By consolidating all nine applications on to one box, we save operations time, increase performance and reduce maintenance costs,” comments Taha Al Kuwaiz, support sector head, NCB.

Deciding which form of consolidation is most appropriate is something most companies do in conjunction with either a vendor or a consultant. Typically, they will have planning tools to help generate a consolidation path and possible alternatives.

“Dell has worked with people from Gartner to build two ROI tools. These tools allow us to capture a customer’s installed base and see how they are using their machines today. From that data you can pick out a way to get through the spaghetti of what they have got out there and develop a plan for server consolidation,” explains McFadzean.

IBM’s Global Services team has a similar tool, while Microsoft relies on its Operations Framework. “Operations Framework allows us to look at how an organisation manages its IT operations and how we can enhance its efficiency. By implementing Operational Framework as a methodology, we can see where companies need to consolidate,” says Salloum.

The need to identify an organisation’s assets before developing a consolidation plan is paramount, as this affects not only the roadmap the project will take but also the amount of hardware that will need to be purchased.

As Sun’s Muller says, “if you’ve got a server farm that is already working then the outlay for replacing servers is hard to justify. There is little point in throwing money at something that is already working.”

According to Muller, discovering the level of server optimisation is an essential part of server consolidation.

“The biggest thing about consolidation that people haven’t snapped onto yet is utilisation. Many people have systems running at 20-30% when they could be running the system at 90% and still be able to deal with the peaks and troughs. It is a mindset problem — people have to have the confidence in the technology and use it,” he says.

Organisations that purchase new hardware for consolidation are pursuing a ‘rip out and replace’ strategy, or as Sun calls it, ‘the complete switch over method.’ Although less common than consolidating on existing hardware, Muller says that there are projects in the region where this is happening.

“For example, some mainframe users have found that the application they are using is not suitable any more and they will change their whole environment at the same time. If you are going from an old legacy environment to a new one then this is typically where you get the complete switch over method,” he explains.

||**||V|~||~||~|Although this approach may appear prohibitively expensive for the region’s businesses, it is not necessarily the case as most companies work the purchases into their existing buying cycles. “It doesn’t really cost them anything extra to consolidate their servers because they would be doing it anyway,” comments Muller.

Consolidating on existing hardware is much more prevalent. Mashreq Bank, for example, used its existing servers rather than investing in new hardware. “The servers that we already had were not being used to their full extent, so they could take the load of the new mail boxes being loaded onto them,” says Nambiar.

McFadzean believes that this is simple common sense. “There are very few green field sites around now so people have to sit down and look at what they have got. There are lots of customers out there that do not know the configuration of the servers they have, but once they have worked this out they can consolidate more effectively,” he says.

Another alternative to replacing existing servers, or working out how to better utilise those already running, is outsourcing. HP’s Ashman says that this is worth considering because, essentially, it is the ultimate form of consolidation.

“Consolidation is all about saving money, simplifying operations and managing IT capacity better, which are the promises outsourcers make. If a company is consolidated on a big box, then they should consider just keeping their business critical data in house and outsourcing the rest,” he explains.

As such, the vendor is touting its partner data centre in Egypt, ECC, while others in the local market, notably IBM, Etisalat and Jordan Telecommunications Company (JTC) are talking up their own hosting centres. However, while it may make financial sense, there are a number of factors holding it back.

Foremost among these is the region’s reluctance to open up its information systems to third parties. As Muller says, “outsourcing is certainly an option… but it is not happening here because companies like to keep their data to themselves.”

Nambiar says that while outsourcing has its benefits, it is often more than privacy issues that dissuade some businesses. “For example, some companies like to have their own staff because they get other benefits [from them] and can train them to do the things that they want them to do,” he explains.

“You also have to think about the expertise — it is easier to train and motivate someone onsite than it is with an outsourcing company,” he adds.

However local organisations decide to approach server consolidation, the fact remains that more companies will have to tackle the subject soon as IT systems become more complex and the amount of data generated mushrooms. If they don’t, then maintenance headaches and operating costs will continue to soar.||**||

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