Posted by Michael Bullock on Wed, Dec 10, 2008
A recent CIO.com article caught my attention: "
Top IT Spending Priorities in an Economic Recession." Essentially, it suggests that despite current hard times, companies should continue to spend money on storage and disk management systems, business intelligence, virtualization, security and, of course, cloud computing. (After all, what IT story would be complete these days without a reference to cloud computing?) The story's point is that investing in these technologies will save money (someday) and put companies in an advantageous competitive position once the bad times end and the good times return. In fact, the article concludes with an IDC projection saying that although the tech industry "will lose more than $300 billion in revenue" during the next four years, "IT spending will make a full recovery and enjoy growth rates nearing 6 percent by 2012."
In other words, happy days are just around the corner.
I have no idea how IDC knows that 2012 is the magic year when everything will turn around but, unfortunately, my crystal ball has been in storage for some time (in my closet, not in the clouds). IDC's, apparently, is all polished up and working overtime. However, what I do know, what everyone knows, is that not many enterprises have a lot of loose change lying around to invest in anything that doesn't show an immediate ROI, let alone puffy clouds. I'm not saying that companies should hunker down in their foxholes, do nothing, and wait until all this blows over, but I do think we all need a little help. I mean, the banks, the brokerages, and the automakers have been lining up with their hands out, why not us IT folk?
Accordingly, I propose that CIOs lobby Congress to get our fair share of that $700 billion economic bailout package. After all, technology is just as important to U.S. business as, say, GM's continued ability to provide the public with the Hummers they don't want. And by giving IT its fair share of any bailout money, Congress can help all industries equally.
But seriously, while I see the value in technologies like virtualization and, yes, even cloud computing for the future of IT, we also have seen technology (especially new, sexy, much-hyped technology) become an end in itself rather than an enabling force for value creation. Everything has its proper time and proper place. So while service provider-based clouds make sense for data backup and ASP services like Salesforce.com (CRM), it would be foolish to even think about spending money to move ERP and critical back office systems into this environment anytime soon.
Realistically, if you want to get the budget and time necessary to create long-term business value, you'd better be delivering immediate ROI and implementing projects with fast payback. Now is not the time to take on new projects that will require more staff, especially if you expect to reduce head count or even keep it flat. For projects that do have strategic importance, make sure you can garner the resources necessary to assure quick success.
And before you start thinking long-term, you may be amazed at how much money you can save by taking the time to audit and assess your current environment. Working in the trenches every day with companies big and small, the things I've seen would turn your hair white . . . or whiter. I've seen companies spend more in monthly maintenance on obsolete equipment than it would cost to upgrade to new systems (which would lower maintenance costs and increase user satisfaction). I've seen companies embark on complete server virtualization only to see hardware upgrades, software updates and professional service fees add up to more than four to 10 times the cost of the actual license fees for the virtualization software. I've seen companies go through the pain and expense of migrating systems that they're going to be decommissioning in the next 12 to 18 months. The truth is, with many legacy applications, it often makes the most sense to leave well enough alone.
So, as you look forward to 2009, you could keep banging on your CFO's door to get the money to invest in new technologies while hoping for a slice of that government bailout money. (I wouldn't hold my breath waiting for either to happen.)
Or, you could take a hard look at your current infrastructure, people and processes and find creative ways to improve service and save money. It can be done, and in today's environment saving money may have to take precedence over spending it. This may not be something your technology suppliers want to hear, but it does have the virtue of being something a CIO can control—unlike the clouds or whatever the year 2012 may bring.
As always, thank you for sending comments, tips and topic suggestions to me at CIOblog@TransitionalData.com.
Posted by Michael Bullock on Tue, Nov 18, 2008
Read this story as published in CIO.com 
No C-level executive, whether it's the CIO or CFO, wants to invest in their company's data center, especially not now when the economy is executing an almost perfect swan dive into an Olympic-sized recessionary pool. But an optimally (or even an adequately) functioning data center is not a luxury; it's a business necessity. If it ain't right, it's got to be fixed.
And chances are, your company's data center is not right. In fact, according to a study conducted by the AFCOM Data Center Institute, an organization for data center professionals, a majority of U.S. companies (53 percent) expect to relocate or expand their data centers during the next several years. Nearly one-third say they will need to move, while 45 percent expect to make major improvements to their existing facilities.
What's wrong with data centers today? What isn't? They're old (at a 2007 Gartner conference a third of the attendees said their data centers were seven years old or older, meaning that they weren't designed for the power and cooling needs of today's high-density servers); their TCO is growing at twice the rate of most companies' revenues, and due to the growing amount of data being collected, stored, and processed, they're often located in facilities that while perhaps suitable five years ago cannot be upgraded today.
It's no surprise that companies such as Alcatel-Lucent are doing radical makeovers of their data center strategy, as profiled by CIO.com earlier this year.
So, whether you want to or not, you're going to have to move or consolidate or redesign your data center sooner rather than later, and you want to do it as well and as cost-effectively as possible. You certainly don't want it to turn into a disaster like what happened to the state of Oregon.
Oregon's Data Center Nightmare
In 2004 the State of Oregon launched an initiative to consolidate the data centers of 12 state agencies and their approximately 1,700 servers into a single, new, Tier 3 facility. Oregon wanted to reduce the number of servers and operating systems it supported (thereby lowering hardware, licensing, and management costs), offer new and better service level agreements, improve the state's disaster recovery capability, allow for growth and technological advances, and ensure better data security.
The state's new site was completed in January, 2006 at a cost of $20 million. A year later, 11 agencies were migrated to the new facility, at a cost of $43 million. At $25,000 per relocated server or about $4 million per agency, the move's cost was astounding-and it gets worse.
In July, 2008, the state issued a report concluding that in fact only 70 out of the 1,700 servers had been eliminated, and new service level agreements had not been provided. Data security was so poor that the Department of Education could not move into the new facility due to its failure to meet federal privacy regulations, and another agency had to move back into its old center because the new center's power supply was inadequate. As for the projected cost savings, who knew?
What went wrong?
Oregon had tumbled into almost all of the pitfalls that can ruin a data center relocation and consolidation.
The Five Pitfalls and How to Avoid Them:
1. Poor Planning: Oregon's project technology administrator admitted that the relocation plan underestimated the number of servers the new facility would have to accommodate. Underestimating the complexity of data center moves-the time it will take, the skills required to do the job, the hardware needed-is more the rule than the exception when it comes to relocation and consolidation.
This is especially true when it comes to taking into account application dependencies. In the heterogeneous environments that characterize most IT application portfolios and IT infrastructures-with their many bolt-ons and homegrown systems developed over the years-no software tool exists today that can see all of the interdependencies. To account for them, the knowledge has to be collected from the people managing the applications-a time-consuming task. Indeed, moving a data center the right way places a large burden on IT departments that already are fully utilized and often over-booked.
In our experience, it's wise either to dedicate a full-time team to planning the move or to look outside the organization for professional help.
2. Underestimating Power Requirements: The Oregon project administrator allowed that the electrical power the facility was designed to provide-55 watts per square foot-was too low. Data centers built for today's equipment range from 150 to 300 watts per square foot.
IT professionals frequently underestimate power requirements, and power costs, particularly if facilities management pays the bills-as is typically the case.
In a recent survey, 68 percent of IT managers said they were not responsible for power bills related to their data center's IT equipment. It is important to make sure facilities and IT talk about their respective issues so that they gain an appreciation for their differing perspectives and areas of expertise. This is the only way to prevent their issues from turning into problems, and their problems from turning into data center relocation and consolidation disasters.
3. Failure to Establish Pre-Move Baselines:
It was difficult for Oregon to determine whether the agencies it had moved were realizing any of the cost reductions originally sought because "the baseline data provided by the agencies before the consolidation was either grossly understated or nonexistent."
It's an old saw that you can't improve what you can't measure. A corollary is that you can't compare one thing to another if you don't know what the first thing was. Know your current data center TCO and have the numbers in hand before moving into your new facility or risk opening yourself up to ceaseless fingerpointing and complaining.
4. Upgrading Systems During the Move: Oregon consolidated its facilities before "the underlying architecture, standards, and licensing issues had been worked out." In our experience, any change undertaken during a move adds risks and complicates the project. This is especially significant when it comes to today's popular practice of using a data center move or consolidation to drive server virtualization.
Although worthwhile, virtualization is a significant project in itself, and attempting to implement server virtualization during a move means trying to do two very difficult things at the same time-a sure recipe for disaster. In short, try to minimize changes during the move planning and execution periods: don't switch vendors, and certainly don't virtualize. The exception to this rule is that it often pays to re-IP and purchase new networking gear before the move. This will save the effort of reinstalling new gear in the new site during the move.
5. There's No Substitute for Experience: Because a data center move is generally a once in a career event for IT professionals, few companies have the expertise on-hand to do it well. Very high density power and cooling environments require specialized expertise and coordination. Unfortunately, IT knowledge does not translate into an understanding of how to move a data center, nor does a knowledge of facilities (and operations) translate into an understanding of the singular requirements of today's data centers, not to mention tomorrow's.
Experience counts. If your organization has someone with the requisite experience, get him or her on the moving team. If it doesn't, find someone who does.
In this economy especially, it is critical that data centers both facilitate current operations and provide the flexibility for future business growth. A botched move can stop an enterprise dead in its tracks; a poorly managed one can force an organization to incur the expense of moving again far too soon. Avoiding these five pitfalls won't ensure success, but it's a good way to start preventing disaster.