Less is more

Businesses that have bought dedicated servers for specific tasks in the past are starting to realise that the work involved in managing a heterogeneous and scattered server environment can be both time consuming and costly. Despite server consolidation being a worthwhile solution to these issues, few end users in the Middle East have yet to take the plunge.

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By  Maddy Reddy Published  January 3, 2005

|~|PatelFerhad1.jpg|~|Ferhad Patel, Intel’s market development manager, Middle East & North Africa.|~|According to IDC, shipments of servers in the Gulf States are expected to grow on an average of 16.3% annually in volume through 2008.

The research firm also says market value will rise a modest 7.8% through 2008, as prices continue to fall. Midrange servers, typically priced US$25,000 to US$250,000, are expected to constitute 2.9% of unit shipments this year, while high-end servers (priced above US$500,000) will account for 45.6% of the market.

IDC expects low-end volume servers to remain dominant in the price-sensitive markets of the Gulf and volume servers — those priced less than US$25,000 — are expected to account for more than 97% of total shipments.

“With the pattern of investment shifting towards SMBs with limited financial means and basic computing needs, volume servers will be the most dynamic segment in this region in the coming years,” says Roshana Rehan, analyst, IDC CEMA’s Systems Group. “Although the key IT markets of Saudi Arabia and the UAE are increasingly saturated, they will stay dynamic by adopting new technologies, undertaking upgrades, and through SMB purchasing of the hardware necessary for staying competitive in the increasingly technology-dependant economy.”

Modest growth by server vendors is also a reflection of conservative budgets earmarked by enterprises for servers. Companies are now taking a hard look at return on investment (ROI) before buying into the latest and greatest servers.

Traditionally, end users that have bought dedicated servers for specific tasks are now realising the pains of managing a heterogeneous and scattered server environment. For instance most companies have multiple physical servers running dedicated applications such as e-mail, databases, middleware, web services, groupware and additional servers for redundancy, high availability and backups.

Instead of ending with a server room, companies have ended up with server farms in large data centres where costs, space and growth have increased the pressure on IT administrators. Furthermore, studies show that, on an average, just 20% to 40% of IT resources both in terms of processing power and storage are used.

As such, many customers have said time and resources spent on managing the high volume of updates to servers for security and application improvements is their biggest sore point and expense. All this is forcing enterprises to take a unified approach to their server infrastructure and turn to server consolidation.

“Historically, a lot of applications and processes are implemented on their own infrastructure with additional servers for redundancy and backups. Most large customers have a lot of physical equipments and most of it is not utilised to any high degree. In the end they have a whole bunch of environments all loose standing.

Server consolidation aims to bring all those applications together and deliver the savings in an environment, where utilisation is optimal from every unit,” explains John Foster, product manager, throughput systems, Sun Microsystems, South Eastern EMEA.

While many vendors are pitching server consolidation through the acquisition of a smaller number of super servers, some are also touting a commodity story through which users can buy a number of lower cost servers and cluster them. Clustering essentially involves linking together a group of computers connected by a high-speed network that work together as if they were one machine with multiple CPUs and share the same workload.

However, Samer Karawi, HP’s marketing manager for the Middle East region clarifies the difference between the two C’s. “Clustering is not really a component of consolidation. It may not necessarily help in the process as it’s usually used for high availability, disaster recovery and load balancing. It’s not the top element in the consolidation. Whenever you are consolidating servers into one unit you are actually relying on this infrastructure to serve the business and cannot take a chance. Clustering only helps you in eliminating that chance for downtime.” ||**|||~|jimMc_dell.jpg|~|Jim McMahon, enterprise business manager, Dell Middle East.|~|Consolidation, as the name suggests, means simplifying the IT environment by procuring one big powerful server and replacing scores of volume servers that are aging or difficult to manage. This base line approach, defeats the purpose of consolidation, argues Intel.

“Typically, when customers think of server consolidation, they just want to reduce the number of servers, by a high ratio. That shouldn’t be the case. They should look at their business needs and the resource distribution and optimise the [existing] number of servers to get the right performance first. Some apps run best on scale up environments while others [such as high performance computing] perform well in a scale out clustered environment with multiple servers,” says Ferhad Patel, Intel’s market development manager, Middle East & North Africa.

But for companies that have outlined a consolidation strategy comes the arduous task of standardising a heterogeneous environment, followed by a clear-cut migration strategy and eventually consolidation. One user that has already consolidated its server environment is Emirates National Oil Company (ENOC).

“Every three years the hardware itself would go obsolete, or the new version of the applications made them slow. Also was the cost of maintaining the support personal and distributed storage forced us to manage backups separately at different locations. All that prompted us to look into consolidation across the IT infrastructure,” explains V. Shankar Iyer, group chief information officer at ENOC.

With more than 30 plus group companies located across Asia, Middle East and Europe, ENOC’s IT department was faced with the daily challenge of managing more than 150 servers. To simplify things ENOC outsourced all of its IT management to Leading Edge Technology, an IT division spin-off owned by the Emirati oil company.

However, to get to that stage it first had to aggregate its existing server portfolio. Since ENOC had already standardised its server infrastructure from a single vendor, client and server applications on Windows and Unix respectively, bringing them together was much easier, compared to a diverse or disparate IT infrastructure. Before embarking on the process of consolidation, Iyer and his team first had to address the diversity of the group companies.

With a mix of wholly owned subsidiaries, publicly listed companies and joint ventures of various sizes, ENOC’s IT team had to balance business requirements, consolidate shared systems and decentralise servers.

After a phased implementation, ENOC finally downsized more than 150 servers to 30 — one-fifth the initial server footprint. “We didn’t face any [major] issues while consolidating. It was straightforward and implemented in phases. It’s not like in one day we plugged in a new big system and switched off the other. Since we were already providing all the IT services we were familiar with the migration issues and consolidation. We drilled down to 30 servers not less or more, because of the nature of the apps and workloads we had — this reduction in physical server count by itself created significant savings."||**|||~|Wael-Abdoush-211.jpg|~|Wael Abdoush, manager, systems and technology group for IBM Middle East. |~|ENOC has had similar savings in overhead costs by bringing together its scattered and distributed systems. Despite the promise of new consolidation tools, Aiyar undertook the task the old fashioned way. “We didn’t go for any new technology, because our need was for processing power, already served by our 4 and 8-way high availability servers. Since we are a mature organisation our IT needs are more or less stable and we don’t need to add new servers all the time. Also we didn’t have any space constraints in the data centre.”

To complement its server consolidation, ENOC has also put in place a state of the art storage area network (SAN). But Aiyar advises that consolidation needs to be done with prudence, than blindly lumping together all the IT resources.

“Although we have consolidated, to address certain business demands we have turned to reverse consolidation. For certain applications in certain departments we have actually localised the servers based on the workload and security. We have to look at it in a balanced way, and see which fits in where.”
For fast growing companies bursting at the seams, where the demands on IT and space are constant, vendors have been prescribing a mix of blade servers and virtualisation technology.

“Up to now, most of the server consolidation has been physical, financially driven, theoretical or geographic. Once the consolidation is justified, then it’s got to be practical to implement with same or improved performance levels. Otherwise it doesn’t make sense to move to a new environment. But with new technology, consolidation goes to the next level,” says Sun’s Foster.

Sun, like a host of server vendors such as IBM, Dell and HP, are all ramping up their blade server offerings. Essentially, blade servers are thin, modular electronic circuit board, containing microprocessors and memory that is intended for a single dedicated application. They can also be easily inserted into a space-saving rack with many similar servers.

Although blade servers constituted just 2% of total server shipments in 2004, they are expected to account for 11% of the server market in the next four years. To date blade servers were considered a bleeding edge niche product, with server vendors charging a premium for the proprietary chassis.

However that appears to be changing, as customers are demanding open standards akin to traditional servers.
Although the plug-and-play functionality for blades of all vendors is several years away, companies such as Dell are trying to address cost issues to get started.

“Currently customers are expected to pay a premium for this kind of rack-density. We don’t believe in that approach. Customers still want all the server features, but don’t want to compromise on anything. The actual comparable price for our blade servers is actually lower than a 1-U standard server,” claims Jim McMahon, enterprise business manager, Dell Middle East.

Not to miss out on the opportunity, IBM and Intel have released an open specification for blade technology. In doing so, the vendors have signed up more than 110 third party companies the past two years to build such technology as networking switches and adapter cards. For customers the benefits are immense in the long run. A customer purchasing a blade server chassis from vendor ‘X’ can plug in a blade from vendor Y and essentially mix and match. But for now, that’s a luxury unavailable.

With prices coming down and the technology maturing, blade vendors such as HP now are seeing an increased uptake from specific verticals. “We estimate the number of blades to have doubled since last year. Most of the telcos and financial service companies across the region have purchased some blades, but the interesting trend now is that even smaller companies are showing lot of interest,” says HP’s Karawi.||**|||~|Samer-Karawi1.jpg|~|Samer Karawi, HP’s marketing manager for the Middle East region.|~|One such company, which found it hard to scale its IT is Oman’s Bank Dhofar. In less than 14 years, the bank’s IT user base has shot up from a few to more than 550 employees spread across 48 branches. With centralised management from its head office Dhofar’s data centre also housed 20 tower servers in Muscat. With demand for compute power, the bank’s IT team was under pressure both cost and space wise.

Ravi Khanna, the bank’s head of IT, explains: “We were running out of floor space and had increased IT administration issues. So we considered various consolidation alternatives. We opted in for blades as they have matured to consolidate our servers and storage.”

Bank Dhofar opted for blade technology from HP. After spending US$14,000 for the blade chassis and its integrated storage and LAN switch and an additional four blades, each priced at US$3600, the bank set out to migrate its Moody’s risk management applications, HRMS modules and other network services onto the dual-processor blades running on Windows Server 2003.

With each enclosure, housing up to three blades a full server rack can take up to 48 blades. Depending on the kind of processing power and storage capability required, Bank Dhofar can now mix and match resources in even less space. With blades powering most of the head office, the Omani bank is currently in the process of phasing out its existing servers and moving them to its remote branches in the
coming months.

“Blades have lot of advantages especially with system administration. We can now manage IT centrally with just one admin. He doesn’t need to go to each server physically when there’s a problem. This has helped in improving the quality of support and put in more controls to make the IT operations efficient,” adds Khanna.

Although select customers such as Bank Dhofar are embracing blade technologies while diverting their aging resources elsewhere, blades only address the manageability and space constraints. Expensive purchases and optimal server utilisation issues remain. To address this, vendors are now tapping into virtualisation. For example, EMC-owned VMWare enables customers to optimise their servers for use in multiple Windows and Linux operating-system environments.

“Every department wanted their own dedicated server, which meant consolidation was not possible. But now, because of the technology available, it is. [Although] virtualisation is still relatively new for the Middle East and needs to be explained and used [more] by customers, the benefits are immense. By creating virtual machines you can run diverse applications and operating systems on the same server and cut away the smaller systems,” says Murtaza Talawala, technical consultant, VMWare Middle East.

VMWare isn’t the only vendor touting virtual benefits of consolidation. Microsoft and other storage vendors such as Hitachi Data Systems now offer storage virtualisation products. Similarly Veritas, now owned by Symantec, acquired application virtualisation outfit Ejasent last year. Unix vendors such as IBM and HP are also pursuing virtualisation and have built it into their server operating systems.

A few vendors, such as IBM, are now taking virtualisation one-step further. Big Blue is offering micro-partitioning that allows the partitioning, or division of a single server into several completely independent virtual servers or logical partitions.

“We are taking virtualisation and logical partitioning one step further and focusing on cutting costs and making IT infrastructure simple and easy to deploy and manage. Now you can run different operating systems, workloads and applications without having to know, which is running where and share the resources between them all,” says Wael Abdoush, manager, systems and technology group for IBM Middle East.

A combination of physical consolidation through blade servers and granular level consolidation through virtualisation essentially means enterprises can pack in more power processing power in lesser area and manage everything from their console. However, despite its benefits, virtualisation also has its share of limitations.

For instance, by running all the applications and operating systems on a single box, enterprises looking at application consolidation have no direct savings on license costs. Furthermore, each app has different workloads and designed on different architectures. Emulating it all in one system, may mean compromising on optimal performance.

While every technology brings benefits with some tradeoffs, consolidation as a trend is picking up momentum. And, while many trends are driven by hype rather than a real business need, HP’s Karawi believes consolidation is an exception and can deliver real success for end users embarking on such projects, as long as they start from a business rather than an IT perspective.

“Consolidation is not cumulative. If all users are doing is replacing existing servers with blades then they have achieved nothing in terms of consolidation. By spending on new servers, without working out the financial and technical elements, then businesses are only wasting money, because new hardware costs more money. It has to be a financial exercise and considered with a bigger picture in mind,” he says. ||**||

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