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Why reduction of data centres makes sense for organizations

Zafar Anjum | Sept. 23, 2014
“From a TCO standpoint, consolidation of data centres can reduce operational costs significantly,” says Kapil Uniyal, Global Head of Tech Mahindra Data Transformation in this interview with MIS Asia. “Hence, there is an urgency to consolidate the data centres to derive savings.”

While the primary objective of data centre consolidation is invariably cost reduction, successful consolidation has given our customers a multitude of benefits:  

Reduced complexity: Organisations often have a diverse set of standards and tools for various business processes, making IT complex and difficult to manage. Consolidation brings standardisation and modularisation of existing systems for simpler administration.

Automation: Standardised platforms can result in easy deployment of automation layers. In addition to the cost savings, automation also leads to shorter provisioning cycles and simplified policy enforcement.

Elasticity and Agility: Scalability for the system is now measured in minutes, allowing IT departments to cater to business requirements with reduced turnaround times at no extra costs.

Moving Towards IT-as-a-Service model: Consolidation is the first step towards the IT-as-a-service model. IT Service Level Agreements can be aligned to support business outcomes - unlocking value for CIOs. One example is when Tech Mahindra created a platform for a leading insurance company in Australia, which was priced 'per policy'. We are seeing an increasing number of customers coming back to ask business outcome-based pricing models.

What are the major issues facing companies when they consolidate datacenters? Do they have any legal implications?

Data center consolidation initiatives require meticulous planning to identify and to avert any potential issues. Broadly, these issues can be classified under three categories - technological, geographical and business.

Technological:  Legacy applications and infrastructure pose a major challenge to consolidation and standardisation efforts. Site-specific solutions supporting local business processes are difficult to consolidate due to lack of technology alternatives.

Geographical: Local compliances, latency issues, seismic zone considerations and OEM-regulated support structures are some of the top issues for data centre consolidation.

Business: Business and geo-political decisions drive consolidation projects as well. Seeking approval from local management teams often delay the consolidation initiatives.

Legal issues typically arise from the compliance perspective when data is transferred across the geographical boundaries. These regulations must be adhered to when designing the end-state for data centers and hinders 'true' consolidation.

Give us a sense of scale - how many datacenters can be reduced, what is the investment needed to achieve this and what are the cost savings for an enterprise?

The benefits and investments vary from customer to customer due to the differing size and complexity of their data centre environments. The exact number of data centres that can be reduced differs with each customer.

To gauge the potential benefits and associated returns of reducing data centre footprint, CIOs need to consider geographical spread of business, application architecture, hardware migration feasibility across locations and data protection and compliances. Initial investments required to achieve long-term cost savings include data center migration effort, hardware refresh and technology upgrade. In most cases, cost savings from consolidation cannot be realised instantly.


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