WHITE PAPER Getting the Most from your …

1 WHITE PAPER Getting the most from your Infrastructure consolidation strategy Sponsored by: Hewlett-Packard Martin Hingley Chris Ingle September 2005 EXECUTIVE SUMMARY How Do You Maximise the Benefits of consolidation ? IDC's work with organizations implementing an IT consolidation strategy indicates that several factors determine the success or failure of the long-term plan. Among the most critical are: ` Accurately identifying current resources and relationships. Successful organizations start by understanding the resources they have in the datacentre and in their remote sites. ` Connecting long-term infrastructure plans with long and short-term business goals. Successful organizations are those where IT is represented at the same level of major business support functions. ` Connecting infrastructure planning and development.

2 Successful organizations are those who have strong connections between their software development processes and their infrastructure plans. ` Realistically setting goals for infrastructure consolidation . Expectation management is as critical as technical considerations; effectively managing expectations involves the skills and deployment of the people involved in the project as well as the project itself. ` Using appropriate sourcing strategy to support consolidation goals. How one buys technology, as well as the technology bought and how it is implemented, is critical to Getting the most from your infrastructure. This WHITE PAPER discusses how organizations can approach consolidation to maximize the benefits and reduce the risk. IDC presents research on the scale of consolidation activity and provides recommendations on how you should think of consolidation in your businesses.

3 IDC EMEA, 389 Chiswick High Road, London, W4 4AE, Tel.+ 2 # 2005 IDC WHY SHOULD YOU CONSIDER consolidation IN your strategy ? IT consolidation has for several years been part of IT infrastructure strategy for many large organizations. CIOs have looked at how they can rationalize their infrastructure to achieve critical goals for their businesses. Looking across a range of businesses IDC has identified two broad goals and six principles which are the aims of many of the IT and business leaders with whom IDC has worked.

4 Figure 1 illustrates these goals: FIGURE 1 Dynamic IT - Principles and Goals Business strategy Automation and ExecutionIT Operations Automation and ManagementEnd-to-End Design and ManagementComponents, Standards-BasedFlexible Operating Cost ModelFlexible Sourcing ModelService-Oriented ArchitectureVirtualised Resources ModelEnd-to-End Design and ManagementComponents, Standards-BasedFlexible Operating Cost ModelFlexible Sourcing ModelService-Oriented ArchitectureVirtualised Resources ModelEnd-to-End, Dynamic Management End-to-End, Dynamic Management Six Dynamic PrinciplesSix Dynamic Principles Source: IDC, 2005 consolidation affects all of these but we can see particular influence on the Automation and Execution goals as organizations use consolidation , especially pooled storage, and increasingly virtualized server resources, to make it easier to provide extra capacity for their applications.

5 On the cost side of the equation lower management cost is a central benefit of consolidation as businesses are able to use a smaller range of management tools to manage their infrastructure and manage a greater number of servers per administrator. 2005 IDC # 3 consolidation strategy is affected in several ways by the principles above, these will be discussed in more detail through this PAPER but IDC would note: ` Designing systems for management (and for associated areas such as security) is much easier when one has a consolidated rather than more distributed infrastructure. ` Sourcing strategy and flexibility in the cost model is a critical part of gaining value. Vendors are offering different financial options to encourage customers to consolidate and to assist in this process. ` Finally, virtualization and consolidation are intrinsically linked.

6 While the maturity of virtualization technologies vary by platform the need for these technologies does not and, as we will see below, it is precisely those platforms which are most distributed which are least virtualized. What is consolidation ? IDC sees businesses approach consolidation in two ways. Tactical consolidation involves short-term measures to reduce systems and software license installed base and hence cost in a business. Typically this is driven by an immediate opportunity or by necessity. Opportunities can be created around uneconomic end of life systems that, by replacing with more modern systems, can do the work with fewer systems. Over the past few years necessity has driven more consolidation . CIOs with budget pressure see consolidation as a way of reducing short-term cost in software licensing and staff.

7 Strategic consolidation involves assessing the resources available to the business and tying those into the priorities set for the organization and into future technology developments. Organizations undertaking strategic consolidation projects will have a clear view of how consolidation will get them to the wider goals they have for their IT organization. They will link consolidation and their infrastructure plans to trends in development methodologies and tools. They will maintain long term plans including systems but also areas such as people, the skill sets they need in the IT department and the impact on employee productivity and costs of changes in the datacentre, in client devices and in workflow. How Do Different Types of consolidation Help Move From Tactical to Strategic consolidation ? consolidation is not a standardized activity across all organizations.

8 Different businesses will approach consolidation from their own starting points and with different goals in mind. 4 # 2005 IDC Figure 2 shows the types of consolidation activity in servers and storage which IDC sees businesses looking at undertaking: FIGURE 2 Types of consolidation Source: IDC, 2005 Tactical consolidation is usually platform consolidation . Organizations are running multiple distributed platforms with large numbers of servers. Of course this a relatively recent phenomenon. Figure 3 shows the scale of problem we are dealing with: FIGURE 3 Growth in Server Units Shipped 1996-2004 by Hardware Platform, Worldwide 01,000,0002,000,0003,000,0004,000,0005,0 00,0006,000,0001996199719981999200020012 00220032004(Units)Mainframe BasedUnix Based (RISC and Itaniumx86 Based Source: IDC, Quarterly Server Tracker, 2005 2005 IDC # 5 consolidation is necessary to deal with sprawl particularly in x86 based server systems.)

9 These systems, growing up from PC architectures, are only just starting to add the kind of workload management, partitioning and virtualization, and reliability features which have been available on mainframe and high end Unix systems for many years. As organizations look at their infrastructure more broadly and consider the strategic nature of consolidation projects they realize that these are typically are more ambitious and involve consolidating applications as well as server and storage platforms. Duplication of functionality in applications and especially in database is a primary cause of excessive cost. These costs should be seen in several ways: ` The direct cost of software licenses ` The direct cost of managing and training staff in each of these applications ` The indirect cost of complexity in introducing new applications to a business with unconsolidated applications overlapping Finally, of relevance to both platforms and applications, organizations need to think about how they consolidate their processes to take advantage of the potential of a smaller set of applications and platforms.

10 Two extremes tend to emerge here. One group argues that IT infrastructure should be able to map onto existing business processes. The argument is that by building business logic into the infrastructure organizations can better replicate their functions and workflow in their applications. So, for example, businesses should rewrite CRM functionality to replicate the myriad ways they deal with their customers. A second group argues that it will be cheaper and more efficient to map processes onto the infrastructure. So, for example, if our existing CRM system demands that customers who are speaking to operator x phone y to change their address and the system is difficult to change then the customer should phone y. As these examples hopefully illustrate the optimum will be between the two.