Cost savings here can incur cost hikes there

In an all-out effort to improve IT enterprise efficiency, the financial services sector seems to be replete with consolidation, not just between merged companies but also within a single company’s own internal computing environment.

Homan Farahmand, META Group Strategic Solutions vice-president, cautions the many companies caught in the throes of data centre, server, storage or other types of consolidation. He notes that the potential of cost savings in certain areas is real, and cites storage, administrative/support and hardware costs as examples.

However, he warns that the potential resultant change in application behavior is likely to increase costs in other areas — such as network costs — particularly as organizations begin to invest in Web services, grid computing and other more complex distributed architectures, even as infrastructures consolidate.

As a result, he recommends following “a consolidation methodology that takes all costs and elements of the IT environment into consideration to develop an optimal infrastructure design that evaluates the environment holistically yet delivers particular consolidation projects with real ROI based on TCO improvements.”

More specifically, he advises these four steps relating to IT portfolio management:

1. analyze inventory to determine consolidation candidates;

2. align consolidation candidates with solutions, especially shared technical/operational services;

3. develop integrated project plans for these solutions, with full TCO and ROI justifications; and

4. iterate, as necessary.

“Users must recognize that optimizing in one technology domain is likely to have effects in other domains, thus requiring evaluation against the new infrastructure design,” he notes. “This means, for example, that server consolidation should instead be thought of as infrastructure consolidation or, even better, unification.”

Farahmand recommends consolidating by patterns of applications, using pattern and service technology models to relate similar application types that are likely to yield the most synergy through consolidation.

He advises firms to consolidate various store-and-forward collaborative applications, such as email, distributed file system and print queues, rather than consolidate a store-and-forward non-real-time application on the same platform as an n-tier real-time transactional application such as SAP R/3 or PeopleSoft v8.

“Basically we should learn to design infrastructure for a class of applications rather than per application,” he stresses.

Users must examine pattern scenarios to characterize various platforms’ application requirements, such as different kinds of server and network workloads and other technical differences, then match the consolidated solution using service designs, he says.

“Tying consolidation projects in with overall IT portfolio management and integrated infrastructure design will help identify the best consolidation candidates, helping to minimize project cost and risk,” he concludes.

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