The Growing Appetite for VirtualizationBy Dennis McCafferty Print
Energy conservation, improved performance and reduced cooling costs are just a few of the benefits of virtualization and consolidation.
The Tasty Baking Co. is making a major IT overhaul. In the process, innovations in server virtualization and storage consolidation are saving the company considerable dough in energy costs and on many other fronts.
With $250 million in annual revenue and 4.8 million baked goods produced daily, Philadelphia-based Tasty Baking is constantly evaluating the cost, efficiency and effectiveness of its IT enterprise resources. Marketing teams need a strong network in place as they promote the company’s more than 100 products, which include the Tastykake line, a fixture in kids’ lunchboxes for decades. Warehouse staff needs the technology to track what’s coming in and what’s going out. And, with about 1,000 employees, the company’s HR, finance and other internal departments depend on their computers running well.
A year and a half ago, the company concluded that it could do better business with less hardware through server and storage virtualization and consolidation, which greatly reduces the number of physical devices needed. Using products from NetApp, Tasty Baking’s network operations now run on just 10 servers, down from the 40 required previously.
This has resulted in sharply lower energy bills. Infrastructure efficiency has increased, too: Tasty Baking is experiencing up to 70 percent memory use of each of those servers; previously, servers operated on as little as 10 percent capacity. The company is also finding that its IT operations are better able to adapt to the speed of business today.
“At first, I thought, ‘OK, we’re reducing the amount of hardware in our buildings, and that’s good,’” says Brendan O’Malley, vice president and CIO. “But virtualization also has allowed for us to operate in a much more automated environment. In the past, if we needed to change part of our IT architecture, it took forever.
“Now, people can tell IT what they need, and IT can do it much more quickly. For example, if we need to change our customer databases, it can be done in a couple of days, while it used to take six to eight weeks.”
Better Performance, Less Energy
More companies are discovering similar results. Essentially, virtualization allows several physical servers to be consolidated into a number of virtual ones that operate out of a single box, resulting in improved performance, less energy use and reduced cooling costs. Multiple single-server machines are replaced by a virtualized server (often a blade server).
More than a dozen servers can be consolidated into one, reducing the amount of space needed to run networks and cutting energy expenses. With virtualization, the location of the server is inconsequential because the technology allows a now-scaled-back primary data center to service many network operations in numerous regions.
Based on power consumption alone, many companies can justify the cost of virtualization and consolidation: U.S. data centers’ energy use more than doubled from 2000 to 2006, when it reached $4.5 billion, according to the U.S. Environmental Protection Agency. Under current conditions, that figure will hit $7.4 billion by 2011.
For every dollar spent on new server hardware in 2007, more than 50 cents was spent on powering and cooling costs, according to IDC, a Framingham, Mass.-based research firm.
“Many organizations now realize that as much as half of the electricity they purchase is going into the data center,” says Jim Barclay, CEO of Business Value Consulting Group, a Royalston, Mass.-based firm that evaluates the value of major IT purchases. “Not only is the cost of electricity growing, but it’s unpredictable. Business CFOs do not like unpredictable. They’d rather pay too much in the beginning and not face too many surprises along the way.”
One way to handle the electricity problem is with virtualization, which also provides speed and flexibility. “Virtualization allows you to bring new virtual servers online in a matter of days, not months,” Barclay explains. “Without it, a company with a great product line and an idea can miss a desired market window because its IT can’t respond in time. With virtualization, it can meet the early portion of that window.”
Server consolidation customers are saving from 25 percent to 45 percent in utility costs alone, according to a 2008 survey of 800 global corporations conducted jointly by research firm Information Technology Intelligence and security software provider Sunbelt Software. And virtualization/consolidation continues to build momentum. Blade servers account for just over 10 percent of servers sold today, IDC reports, but will account for more than one-quarter of all server shipments by 2011.
“Besides being good for the environment, virtualization is a darn good business strategy,” says Mark Lutchen, a principal in PricewaterhouseCoopers’ advisory practice and author of Managing IT as a Business.
In a recent survey of senior executives in five key regions, PricewaterhouseCoopers found that energy costs are paramount. In fact, 60 percent of the respondents said potential energy savings represent the most important factor in their companies’ environmental decision making.
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