The Growing Appetite for Virtualization

By Dennis McCafferty Print this article Print

Energy conservation, improved performance and reduced cooling costs are just a few of the benefits of virtualization and consolidation.

Mergers Lead to IT Consolidation

Over the last decade, corporate consolidation has created the need for server consolidation. Mergers and acquisitions have resulted in decentralized technology scattered throughout the world.

“Now, for a variety of reasons, companies are compelled to standardize and bring these disparate technologies together,” Lutchen says. “Why buy a server every time you implement a new system? You’ll have 600 servers, and many of them will be used at just 30 percent capacity.”

The merger of telecom companies Alcatel and Lucent in late 2006 is a prime example. Even before the merger, the two companies planned data center consolidations. Now operating as Alcatel-Lucent, the company has its consolidation plan well under way. It is using Hewlett-Packard-supplied consultancy services and HP power-saving servers, resulting in the consolidation of 25 data centers and 125 server rooms into six data centers and a very small but still-to-be-determined number of server rooms.

Another HP customer, Mitel Networks, is saving $300,000 a year by reducing its servers from 12 to two and its processors from 24 to 12. And Pfizer is saving considerable but still-to-be-determined costs by reducing data center space by 40 percent, consolidating 220 servers into a dozen.

Alcatel-Lucent is anticipating similar success. Through virtualization and consolidation and the phasing out of legacy applications, the company will cut its server count from 10,000 to 7,000. There have been challenges: Some employees in various departments aren’t accustomed to having their designated servers outside their building—much less possibly in another country—and culturally, there’s always the resistance to change. Despite these issues, the effort is proving worthwhile. For starters, the company expects server-utilization efficiency to increase to between 60 percent and 70 percent, up from between 10 percent and 30 percent.

“We want to push virtualization as wide and deep as we can,” says Cliff Tozier, vice president of infrastructure for Alcatel-Lucent, based in Paris. “We can no longer afford for every application to have its own environment. Virtualization has allowed us to dynamically increase capacity in days or hours. In the past, it would have been weeks or months.

“We also are seeking to be more flexible in meeting business demands because of the tremendous growth we’re seeing in video and messaging across the enterprise, and virtualization has allowed us to do this. We can [provide] services on-demand so developers can get quicker access to computing power for projects.”

Meeting the Challenge

Despite the many benefits of virtualization and consolidation, there are inherent challenges, including additional costs for training and consulting. For certain, there is a learning curve in adopting these tools.

“You need trained staff that understands the technologies and can manage the transition from today’s data center to the virtualized one,” says Justin Perreault, general partner with Commonwealth Capital Ventures, a Waltham, Mass., consulting firm. “These skills are still in scarce supply. It’s the old problem of trying to replace the engine while you’re driving down the road at 60 miles an hour.”

Richmond, Va.-based Genworth Financial, a Fortune 500 global financial planning company, recently decided to make the transition now. It was running out of data center space because of server sprawl, and the cost of power and cooling in that space was too costly.

Working with virtualization/consolidation tools from companies such as VMware, HP and Dell, Genworth is now seeing a dramatic increase in productivity: It has reduced its average underwriting cycle time—from when a client application is received to when a policy is issued—from 45 days to 10 days. An added benefit is that the switch hasn’t negatively affected network operations or security, and, in some ways, it has benefited those areas.

“With respect to security, the patching, hardening, password and anti-virus procedures are the same for virtual servers as they are for physical servers,” says Michael McGarry, Genworth CTO. “Virtualization allows us to build out the environment quicker and enables us to put more servers in smaller spaces than we ever thought possible. It eliminates tape backups for disaster recovery, and individual backups are provided in a much smaller footprint.”

This article was originally published on 2009-01-08
Dennis McCafferty is a freelance writer for Baseline Magazine.
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