The path to consolidation

The greatest strategic value corporations gain from consolidation is an improved ability to adapt the infrastructure to incorporate new technologies and respond to growing business requirements.

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By  Abeer Saady Published  September 21, 2005

|~|LEAD-PIC-BODY.jpg|~|The consolidation plan must cover everything from the assessment of the current environment to the management of the new one to contingency planning.|~|For most corporations, the concept of server consolidation connotes sweeping projects that replace numerous smaller servers with powerful, expensive workhorses. Achieving the benefits of server consolidation, however, does not necessarily require a large-scale effort that is both expensive in terms of a lengthy planning cycle and up-front investment. Many organisations consolidate as part of the natural refresh cycle of their technology infrastructures. These efforts are more iterative processes, rather than one–time projects that focus on reducing the number of data centres as the technology infrastructure is updated and augmented. Hardware vendors are flooding the market with sophisticated severs and enterprises are starting to realise the work involved in managing a heterogeneous and scattered environments can be both time consuming and costly. According to a survey conducted by Gartner Group, consolidation was at the top of a CIO’s priority list in 2004. 89% of the survey participants were either planning to consolidate or already had a consolidation project underway. Another 5% were about to complete consolidation projects. There were a variety of reasons stated for the interest. Chief among them was to reduce the total-cost-of-ownership (TCO), primarily in the areas of staffing, hardware, software and facilities. Other reasons included better manageability and service and improved agility. The impetus for consolidation stems from the proliferation of distributed systems that occurred during the 1980s and 1990s, according to IDC. As the price/ performance and functionality of small and midrange systems improved dramatically, enterprises started deploying distributed servers to support departmental processes. While such systems allowed organisations easy access to powerful departmental applications, they eventually led to a quagmire of systems that were incompatible, unable to share information and difficult or impossible to manage consistently. Corporations also faced the challenge of meeting increased levels of availability and security. At the same time, corporations started to standardise their environments on a consolidated set of products from a limited number of vendors in order to realise cost savings, procurement, service and management efficiencies. "The move towards server consolidation started to get serious after the collapse of the dot-com era. The collapse proved that technology can not be the only base for growth,” says Wael Abdosh, systems group manager for IBM Middle East and Pakistan. “Companies realised they had to adopt a more sustainable business model using technology as a tool. At the same time, costs started to become important. There was enormous pressure on businesses to reduce costs and invest only where there was a return-on-investment (ROI),” Abdosh explains. Corporations found a way to reduce TCO and improve manageability in addition to other benefits through consolidation. Cost reduction may be the primary reason for server consolidation, but it is not the only reason. “It is not only about savings. It is also about streamlining hundreds of servers. Chances of failure can be quite high with scattered server environments. However, these environments can be an engineer’s nightmare. With consolidated servers, enterprises can perform efficiently and utilise all the available resources,” he adds. ||**|||~|Hesham-Rashed-BODY.jpg|~|Rashed: Consolidation requires a plan that addresses business and technology needs.|~|IBM has re-launched products to suit consolidation using open standards and logical partitioning. According to Abdosh, the sale of consolidated servers in the Middle East is growing in many verticals. He believes this is due to the business model of the industry. "Server consolidation is a global issue and it [comprises] four stages. The first stage is location centralisation. The second is physical consolidation, where small servers are swapped for one big server. This is when ROI starts. The third stage is data integration and the forth is apps integration. This is the highest stage of consolidation,” he adds. In the Middle East, enterprises are in the second stage of consolidation. Graham Porter, marketing manager for Sun Microsystems MENA, says corporations are often faced with complex IT systems due to the number of different processors and operating systems (OS) sitting on a single platform. Also, given the previously poor telecommunications networks in the Middle East, most companies had to place servers in every sub-region. "Today, things are [different]. The consolidation [process] allows customers to run multiple OS on one server. This saves costs for companies and is easy to manage. Every company is looking to reduce costs and complexity and consolidation is an obvious way of doing this," Porter adds. The vendor has broadened its product offerings to provide not only solutions based on its SPARC processor-based systems, but also on AMD's Opteron processors. "We are also supporting Linux and Windows. The key point about our offerings to customers looking at consolidating is that we provide open systems, which run more than 17,000 applications, so we can support just about every customer's apps on our systems," Porter explains. Sun believes server consolidation is relevant for large corporations with multiple platforms scattered over various different offices. In addition, end users with a history of running proprietary and mainframe platforms are facing a combination of expensive maintenance and incompatibility issues, which they need to resolve. “These are the customers who stand to benefit most from server consolidation,” he adds. The Conrade Cairo shares Porter’s sentiments. Consolidated servers are essential for hotel chains, which are located in different geographical locations. Conrade’s computers have to be up and running 24/7, which means it cannot afford to have disparate apps failing at any point in time. "We use variety of systems and data bases, so management is important," says Mohamed Gharib, assistant CIO of Conrade Cairo. As an international hotel, Conrad uses technology to retain its credibility from any failure. "It is a business hotel and there is no room for mistakes," states Gharib. "Server consolidation saves effort, time and money. It also allows us to have the miximum level of IT security.” Intel says the concept of server consolidation is starting to take off in the Middle East. Providing high-levels of service is on every CIO’s mind as the user base expands beyond internal users to customers, suppliers, government agencies and business partners. Consolidation provides a consistent management framework, which can lead to a more acceptable level of service. “Server consolidation, as well as utility and grid computing are gaining momentum. Corporations view the technology as a means of improving resource utilisation and manageability, better customer care and low TCO," says Mohsen Magar, spokesperson for Intel Egypt. The consolidation of a server environment can occur at many different levels. Most organisations pursue different levels of consolidation at different times, depending on their particular requirements. Consolidation also tends to occur over time, as an iterate process, moving through the different types of consolidation. “However, before making the decision to consolidate their infrastructures, many companies want assurance of architectural and financial benefits," he adds. Magar draws attention to one segment of the market where the demand for consolidation server solutions is increasing. “This sector is e-government. Without consolidated servers, we can not talk about e-government and the Middle East is no exception,” Magar states. Today's competitive business landscape demands that enterprises get the most from their resources. Whether they are dealing with government regulations, security concerns or internal business departments, consolidation can drive significant ROI, says Tarek Hindi, manager for Tech Access, which services Egypt, Sudan, Libya, Syria and Lebanon. "Companies have hundreds of servers. With a multiplicity of systems sometimes comes a conglomeration of operating systems. Add to that complexity the possibility of disparate apps, as well as hundreds of desktops, and the IT environment can become unbearably complex. When these systems are under-utilised, they drain valuable resources,” Hindi states. ||**|||~|WaelAbdoush-BODY.jpg|~|Abdosh: The dot-com bust has taught us that technology cannot be the only base for growth.|~|CIOs are faced with the seemingly incompatible goals of reducing costs while trying to deploy new services and manage data growth. At the same time, the proliferation of distributed servers to support new apps is contributing to server sprawl and increasing management costs. "These solutions, when over-taxed, performance drops. Also, the distributed direct attached storage on these systems makes it nearly impossible to manage the ever-increasing demand for data capacity,” he adds. Having fewer assets to manage also frees up time for staff to work on strategic business objectives. Ashraf Sabri, vice president of Raya Holding, says a primary concern of business and IT leaders in a challenging economy is to reduce operating costs and simplify the management of their IT infrastructures. However, due to technological advancements corporations can lower operating costs by consolidating their systems. Servers are now less expensive and they no longer require dedicated environments, such as raised floors or separate buildings. “Yet server proliferation remains a major cause of an overly complex and costly IT infrastructure and can result in an increased TCO due to high administrative and management costs, sometimes amounting to up to 80% of the entire IT budget,” notes Hindi. Consolidated servers are easy to configure and system resources can be dynamically reallocated between different apps. Services can scale seamlessly to meet growing customer demands. It can also simplify business continuity plans and better enable disaster recovery (DR) initiatives, ensuring that systems are up and running, reducing interruptions to mission-critical apps. Through consolidated server virtualisation, businesses can lower the cost of maintenance and support for data centres of all sizes. To minimise risks associated with consolidation, it is important for enterprises to understand which servers are good for consolidation and how combined apps and workloads will compete for resources. A few years back, Mobinil recognised the importance and the need for a consolidated IT environment. The company started efforts aimed at developing and adopting a consolidation strategy to meet the growing demand of the business. “Our growing business demanded a long-term IT strategy, which involved among other things a more streamlined server environment,” says Hesham Rashed, senior manager for support services, technology management department at Mobinil. Consolidation requires a plan that addresses business and technology, current opportunities and future requirements. One of the greatest risks corporations face when considering consolidation is underestimating future hardware, software and apps requirements; hence careful assessment and continuing review are critical. Prior to embarking on detailed plans for consolidation, enterprises should conduct a ROI analysis to understand the potential impact of associated costs and benefits. For evaluating IT investments, ROI, which assesses multiple benefits and costs, represents a more comprehensive metric than standard TCO. Mobinil did exactly this. Rashed says the main drivers for consolidation included changes in the service provider market and emerging new technologies. These changes demanded an infrastructure that was robust enough to work with a range of different solutions and apps. "The main problem that faced us at the beginning of the project was the immediate need to train our systems and support engineers. There was also the issue of migrating apps from the old platform to the new one in a short period of time. However, not all apps could be migrated, especially the ones that were developed internally," Rashed explains. “Currently we use the HP Proliant RDP to manage and install software and apply patches remotely for single or groups of blade servers.” Cisco Systems says due to the high management overhead associated with corporations that have branches at different locations, the thought of creating a consolidated environment becomes an attractive option. "We are seeing an increasing interest by customers to perform server consolidation, in particular the consolidation of file and print servers for different branches," says Samer Al Kharrat, general manager of Cisco Systems, Gulf region. "Data centres are buying consolidated solutions. In order to meet the growing demand for these solutions, we are partnering with server vendors to integrate intelligent switching technologies on servers, delivering enhanced networking services, and thus helping IT departments to provide better service,” Al Kharrat explains. The demand for server consolidation in the Middle East may be low when compared with the rest of the world, however, Magirus continues to educate regional value add resellers (VARs), internet service providers (ISPs) and end users about the benefits of a consolidated environment. Damion Lock, business development manager at Magirus, believes the sluggish uptake of the new methodology is due to companies creating a box shift mentality where customers are encouraged to purchase yet more processing power to solve their growing resource requirements. "The growing interest in recent months is a sign of the realisation by end users that purchasing lots of small servers for a data centre can create financial and management black holes where budgets spiral out of control," he adds. ||**|||~||~||~|Increased automation, e-commerce, web portals and internet traffic are contributing to the rapid growth of server infrastructures, says Sheriff Abbas, marketing manager for Microsoft Egypt. The result is a mixture of disparate environments and increased management overheads. The software giant says IT consolidation is an ongoing process, which incorporates servers, storage apps and services, and ties all of them together with best practices. Organisations thinking of moving to a consolidated environment should have a plan. It should include systems and network designs, specification of new processes, a schedule, and must address how the new implementation will be rolled out, containing the specifics of a contingent scenario. “Microsoft supports the drive to operational efficiency through server consolidation by helping IT organisations plan for consolidation from beginning to the end,” says Abbas. There may be lots of benefits for a consolidated environment, however, one factor that makes corporations slightly nervous about this methodology is the disaster recovery aspect since all corporate data sits on a single server. For instance, the consolidated server environment does not appeal to the Egyption Bank Company. The company says it does not want to put all its eggs in one basket. "We prefer using different physical servers for different services. We cannot take the risk of any downtime. The big concern for us is that everything will come to a halt if there is some problem with a consolidated server environment, and we can not afford that,” explains Mahmoud El Gamal, general manager for the technical operations division at the Egyptian Bank Company. ||**||

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