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Benefits and Challenges of Data Center Consolidation

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Given the ever-increasing business demands for IT services, physical space is at a premium in many data center facilities. On the other hand, a number of organizations are looking to consolidate their data centers in order to save money, streamline operations and improve energy efficiency.

There are a number of drivers for consolidation projects. In some cases, the organization grew through mergers and acquisitions, inheriting multiple data centers that replicate services. In addition, many organizations have effectively reduced their IT footprint through virtualization and the adoption of hyper-converged infrastructure solutions. These technologies make it possible to eliminate underutilized equipment and replace what remains with smaller form factors.

The rationalization of these services can also facilitate consolidation. This has been a priority within the federal government through the Federal Data Center Consolidation Initiative. Federal agencies have been working to reduce the cost of their data operations by eliminating waste and implementing a shared services model.

Similar efforts are underway at the state level. According to the National Association of State Chief Information Officers (NASCIO), 42 percent of states had completed data consolidation projects in 2016, up from just 14 percent in 2007. In addition, 47 percent of states are currently working on consolidation projects, and 11 percent are in the planning stages.

That data comes from a newly released report, “Shrinking State Data Centers: A Playbook for Enterprise Data Center Consolidation.” The report notes that consolidation enables centralization of data infrastructure, which streamlines maintenance and strengthens security. Consolidation also offers an opportunity to introduce standards, better integrate systems and applications, improve support for legacy systems and enhance business continuity.

There are, of course, challenges. Resistance to change is always a huge hurdle – one that only intensifies when technical problems emerge or consolidation doesn’t meet business needs. In some instances, costs are higher than anticipated and regulatory compliance requirements aren’t met.

To help minimize risk, the NASCIO playbook recommends 9 steps organizations should take in a consolidation initiative:

• Conduct a needs analysis. IT should meet with business stakeholders to discuss their current requirements as well as anticipated growth.

• Remain engaged with stakeholders throughout the project. Making stakeholders feel they are part of the process helps minimize resistance to change.

• Plan carefully but remain flexible. The project plan should identify all impacts and provide enough flexibility to accommodate unforeseen issues.

• Document existing assets. Thorough documentation helps identify underutilized or unneeded resources, opportunities for reuse, and any resource gaps.

• Conduct a cost analysis. By understanding current costs, the organization can better calculate the savings afforded by consolidation.

• Implement standards wherever possible. Standards such as ITMS and ITIL help increase efficiency and security and further reduce costs.

• Expect the best but prepare for the worst. Maintain constant communication with stakeholders to manage expectations.

• Get buy-in. If all stakeholders are on board for the project, it is more likely to deliver long-term benefits.

• Report successes. Show the organization how much money has been saved, and the greater efficiencies and security that are gained.

While public sector agencies are leading the charge for data center consolidation, organizations across industry sectors can benefit from rationalizing and rightsizing their operations.

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