Rein in out-of-control IT costs to save money, says Big Blue

The global economic downturn has companies looking to cut costs in a hurry and addressing out-of-control IT environments may be one place to find those savings, according to an IBM spokesperson.

IBM executives say the company has witnessed a resurgence in companies looking to cut costs from IT budgets, as the economic storm darkens the horizon.

The way to achieve those cost savings without sacrificing business ability is server consolidation, says Moonish Badaloo, global service product manager at IBM’s global technical services.

“If you haven’t felt the economic impact yet, you probably will soon,” he says. “Don’t wait for the business to make cuts, it is always better to go to the business and say ‘this is the way we can save money.'”

Badaloo addressed a crowd in Toronto at an event hosted by Computerworld Canada. Economic woes weighed on the minds of many audience members.

More than ever, companies need to look at ways of doing IT that make sense, says Jim Bangs, founder of Nortecom Software Corp. in Hamilton, Ont. “Even in this economy, companies still  need to invest somewhat in IT.”

Bangs’ business does image management for the jewellery industry. But he’s hard-pressed to find a diamond in the rough in the current economic environment. Small businesses like his are particularly vulnerable, he says.

Still, the old adage goes that you must spend money to make money. Now Badaloo is putting a twist on that – spend money to save money.

When consolidating, “you have to look at all aspects of the cost,” he says. “You can’t go wrong in an investment for IT optimization because you’ll save money in the long run.”

Through consolidation, IBM says, a business can typically reduce hardware costs between 33 to 70 per cent, cut maintenance costs by up to half, reduce support costs from 33 to 55 per cent, and lower facility costs 33 to 50 per cent.

There are four key steps to its consolidation plan: centralization, physical consolidation, virtualization, and workload integration.

In a nutshell, Badaloo recommends reducing IT complexity.

First consolidate many data centres into a few, then replace many older servers with fewer and more powerful systems. Switch from one application per server to many applications per server with virtualization.

Virtualization is key because it helps you decrease your power and cooling,” Badaloo says. “It helps you deliver workload and implement servers faster.”

While achieving cost savings may seem like a formidable task, it can have an easy beginning, another industry observer suggests.

The first step to cutting IT costs could be to identify duplicate applications – such as two programs performing anti-virus scans, says Gerry Smith, president and CEO at CiRBA Inc., a server consolidation company.

The next step, he said, is to take stock of how much of your IT infrastructure is actually being used – a task that doesn’t require any fancy tools.

Even your laptop has PerfMon – a simple performance monitoring tool for various network elements – you could collect information on how busy a machine actually is, Smith said.

IBM used this approach for one of its clients, says Badaloo, and achieved great success in reducing the company’s IT infrastructure. The firm was able to move from 27 physical servers to just two, while still hosting 45 logical servers.

The client paid upfront to perform the migration and for the required software and hardware upgrades. But the cost savings made up for it in the end, the IBM executive says.

The client made its money back in 20 months and is projected to save nearly $3 million over five years.

This case illustrates well what how useful a hardware review can be, Smith says. Often companies won’t just find under-utilized hardware, but hardware that isn’t being used at all.

“It’s amazing in some of these larger data centres how many servers are sitting there because Joe, who worked here four years ago, set it up, but it was never used,” he says. “Find out what plugs you can pull to start saving money immediately.”

Bangs agrees and says even a small business can have expensive hardware that isn’t being used. A smaller company can also learn from the mistakes of larger businesses and design an efficient IT environment from the start.

“Seeing the end game of a less structured build helps motivate me to wisely grow into IT,” he says.

As for Badaloo – he’s encountered ar too many IT nightmares that redefine the meaning of “server sprawl.” One of the companies he dealt with had an unbelievable 150,000 servers!

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Jim Love, Chief Content Officer, IT World Canada

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Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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