Are consolidation cost savings worth the effort?
We are in the very beginning stages of consolidating some of our Wintel servers. We know that this is the way to go from a management perspective, but in your experience, do you find that companies that consolidate find the cost savings to be worth it? Is there a time when a data center shouldn't consolidate its servers?
In theory, consolidation can be worth the effort for a number of reasons, including increased IT management efficiencies and performance, and reduced software and infrastructure costs. The real issue companies need to determine is the timeline of the payback. Acquiring new hardware or applications will likely significantly affect cost savings, though these factors could be offset by retiring old equipment and software licenses. Another factor to consider is how in-house staff will contribute to the consolidation effort and whether new personnel or training will be required to complete the project. Overall, a cost-assessment should be included in planning any consolidation effort, since it is key to understanding how, when, or even if an organization will see its investment pay off. Without adequate pre-planning, most any consolidation effort is suspect.
This was first published in May 2005