7 practical ways to save costs in the data center

In the face of organizational budgetary cuts, there are seven effective ways enterprises can reduce costs in the data center during a 12- to 18-month period, according to Gartner. Gartner has identified seven important ways to cut data center costs:

1. Rationalize the hardware
Hardware rationalization will result in savings in several areas. First, it will help with asset and inventory management and provide a clear picture of the boxes that are being used effectively and those that are not. Second, server rationalization should lower maintenance and support charges. Third, server rationalization will lower energy costs, typically more than $400 per server, per year. Finally, hardware rationalization projects usually yield savings of 5 percent to 10 percent of the overall hardware costs, when measured post project.

2. Consolidate data center sites
Most organizations still have multiple data centers for their IT operations, ranging from large complex installations to small machine rooms. Consolidating these multiple sites into a smaller number of larger sites will often result in financial savings. Such economies go beyond real estate savings and include getting rid of redundant IT assets, software, maintenance and support, and disaster recovery contracts. While these projects often result in reducing the number of data center operational staff needed, Gartner advises users not just to get rid of people but to retrain them to fill skill gaps in other parts of the data center or wider IT organization. Site consolation can typically result in savings of between 5 percent and 15 percent of the overall data center budget.

3. Manage energy and facilities costs
Energy costs are rising for most data centers because the energy consumption of the underlying hardware continues to increase as new technologies, such as blade servers, are more widely used. As floor space runs out, more hardware is crammed into the space, thus requiring higher levels of cooling. Gartner recommends employing the following tools and techniques to manage the energy cost curve: raise the temperature of the data center to 24 degrees Celsius to reduce the level of cooling required; use outside/free air as an alternative to expensive air conditioning; use hot aisle/cold aisle configurations, blanking panels and economizers; and use server-based energy management software to run workloads in the most energy efficient way, such as taking advantage of lower energy tariffs.

4. Renegotiate contracts
Data center managers must work with finance and procurement teams to revisit all hardware, lease, software, maintenance and support contracts. In some cases, it may be appropriate to terminate a contract because it’s too expensive, while in others, new terms and conditions may secure a lower payment schedule. Vendors are used to reviewing contracts during downturns.

5. Manage the people costs
People costs still form the largest single cost element for most data centers, sometimes running as high as 40 percent of the overall costs. Gartner advises users to review staffing levels and the types of skills needed for the next 24 months and to make maximum use of labor arbitrage benefits by using skills in regions with cheaper labor rates, such as India, Brazil, Poland and Romania.

6. Sweat the assets
Delaying the procurement of new assets should be considered a necessary step for all data center managers. Upgrading based purely on the book value could incur unnecessary costs earlier in the life cycle. This may result in a performance disadvantage and possibly an energy use increase but will defer the capital expense of a new acquisition. Users should negotiate on maintenance and support costs in such instances, as well as ensuring that software is still supported on servers whose working life is being extended.

7. Virtualization
Virtualization of hardware should be encouraged to improve operational efficiency, as well as to support consolidation, decommissioning and cost management programs. For most users, the net benefits will include a smaller hardware estate, which, in turn, will mean lower operating depreciation costs and less-expensive maintenance and support. Virtualization is also a good way to control energy costs. Although virtualization requires license and project costs, users can expect to see net savings within 24 months, and the effective use of virtualization can reduce server energy consumption by as much as 82 percent and floor space by as much as 86 percent.


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