Gartner Outlines Seven Practical Ways to Save Costs in the Data Center

Key Issues for Data Center Professionals to Be Discussed at Gartner Data Center Conferences October 5-6 in London and December 1-4 in Las Vegas

STAMFORD, Conn., June 11, 2009 — 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, Inc.

"While responding to contracting budgets, IT managers are expected to deliver an ever-increasing level of service to users, and many are charged with showing tangible financial savings as part of cost-cutting measures," said Rakesh Kumar, research vice president at Gartner. "Significant savings can be made in the data center. For example, removing a single x86 server will result in savings of more than $400 a year in energy costs alone."

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.

3. 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.

4. 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.

5. 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.

6. 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.

Additional information is available in the Gartner report "How to Cut Your Data Center Costs." The report is available on Gartner's Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=968812&subref=simplesearch.

Gartner analysts will discuss the key issues for the data center during the Gartner Data Center Conferences taking place October 5-6 at the Royal Lancaster Hotel in London, and December 1-4 at Caesars Palace in Las Vegas. The event provides data center professionals with real-world perspectives and strategies to transform their data centers. Additional information for the event in London is available at http://www.gartner.com/it/page.jsp?id=868812, and more details for the Las Vegas event are at http://www.gartner.com/it/page.jsp?id=851712. Members of the media can register for the London Summit by contacting Laurence Goasduff at laurence.goasduff@gartner.com. For the Conference in Las Vegas, reporters can register by contacting Christy Pettey at christy.pettey@gartner.com.

Contacts:


Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com

Holly Stevens
Gartner
+44 0 1784 267412
holly.stevens@gartner.com


About Gartner:
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,000 associates, including 1,200 research analysts and consultants in 80 countries. For more information, visit www.gartner.com.