A focus on IT and data center cost reduction is important as organizations prepare for cloud and digital transformation initiatives. According to Gartner, data center consolidation efforts can save organizations between 10 and 20 percent of their data center budget.1 In addition, evaluating your data center inventory for retirement candidates will better define your list of applications for cloud migration and provide immediate cost-saving opportunities.
CTM recently saved a client approximately three million in annual lease costs as we worked with them
multi-year cloud transformation effort. They needed to realize data center cost reduction through
consolidation and retirement to help fund their cloud transformation program.
We ran across four scenarios:
First, some data center assets were not in use and the IT Infrastructure teams were either not aware of the assets or not familiar with the contractual agreements. In our experience, it is essential that technical management proactively partners with financial teams to help manage hardware and data center contracts. In reviewing upcoming renewals with the technical teams, we were able to eliminate maintenance renewals, lease agreements, and reduce their colocation space. It's also important to remember that, when possible, a complete decommission of all related components is critical for full-cost savings. Decommissioning an internet circuit, but not returning the router to the vendor it’s leased through, provides for only partial savings.
Second, we found that some assets had available capacity, and we could easily migrate systems, consolidating to a smaller footprint and eliminate some hardware. In some cases, there was additional technical complexity, however, CTM assisted in identifying solutions to transparently migrate the data. In one specific instance, simple service profile moves from one UCS blade to another allowed for a quick, non-business impacting exit of hardware. Another substantial opportunity we found was by consolidating underutilized server storage arrays. As the hardware assets were evacuated, we ensured the appropriate decommissioning steps were taken including data erasure, returning the asset to the appropriate vendor, and removal of the asset from the contract.
Third, instead of renewing some hardware leases, alternative, more cost-effective options were leveraged. Migrating archived unstructured data to Azure Blob and Box enabled the decommissioning of much more expensive leased hardware. This took only a few weeks to execute and resulted in hundreds of thousands in annual savings.
Fourth, we found instances where hardware for upgrades had been purchased, however, the migration to the new hardware had not been fully executed. This required coordination with the application teams and the business. The engineers had struggled to complete this effort without proactive support to coordinate the change with the impacted infrastructure and application resources. CTM Technology Group has the technical expertise to coordinate between infrastructure and application teams to execute key cross-company changes that result in significant savings.
If your organization doesn’t currently have the funding for a cloud migration, as Gartner
recommends, “get cloud ready and use what you’ve got, but do it better, by increasing
utilization and efficiency.” Consolidate your data center footprint, better utilize your
existing assets, and decommission systems and applications no longer in use. Use your cost
savings to subsidize the start of a cloud program.
CTM Technology Group can help your organization realize immediate cost savings to aid in funding a Cloud Transformation initiative. Contact us today for a consultation.
Data Center Consolidation of infrastructure and application components is one of the most common and effective approaches to reduce the costs of your business services.
Cloud is not "one size fits all" and organizations should evaluate what services best fit into a cloud strategy and which should stay on-premise.
Fully decommissioning IT assets is an essential activity to be completed as systems are archived, data migrated to new environments or hardware is replaced
1 10 IT Cost Optimization Techniques for Private and Public Sector Organizations, Gartner