Global Recession Hits the Data Center – Millions at Risk!!!

Every morning we hear about the staggering job losses mounting up in businesses around the world. Hundreds of thousands of jobs have been lost so far. Unfortunately, no one seems immune from the impacts of this recession. In fact, the recession is now impacting the data center and a new segment of the work force is at risk – your servers!

Would you keep an employee who worked less than 4 hours per day, over-spent valuable resources and was someone you had to manage constantly – obviously, the answer is NO! That is the situation today with install base single-core servers.  Aging servers are a perfect target for downsizing in this tough economy. Industry analyst IDC estimates that there are approximately 30 million servers installed in businesses around the world and about 40% of those use single-core processors (4 years old or older).

Let’s look at the 2008 performance review of these single core servers.

ð       Excessive Spending Habits: For the performance they deliver, these servers take up too much space and over-consume power and cooling resources.

ð       Lazy Work Habits: A typical non virtualized server runs at only 10-15% utilization – meaning they sit idle a majority of your work day.

ð       Needs Excessive Management: Aging servers require more maintenance. Extended warranties are expensive (estimated $600-1200 per server depending on the type of server) and if you don’t extend the warranty, the risk of downtime is on IT and the business. While the costs to maintain a server vary widely , during a recent discussion with Forrester research, they indicated that an aging server can cost up 3x the costs of an in-warranty server (under standard 3 yr manufacturer support).

Continuing to use these old servers is not a wise business strategy. But if you fire your existing infrastructure, who can you hire to do the work? Simple, you hire fewer new multi-core servers running virtualization to replace a large number of install base servers.

But, is replacing them worth the effort … I mean, why fix what ain’t broke? About 2/3 of IT’s budget is consumed maintaining existing infrastructure (source Gartner), leaving a measly 1/3 for innovation and value add business capability. So in this recession, unless you are focused on reducing OpEx, the IT budget that you are cutting is likely restricting your business competitiveness and new service delivery - the value of innovation.

Replacing old servers with new offers both cost and productivity advantages for IT in addition to improved services and competitiveness for business. Read some of the success stories from businesses in 2008 where proactive IT investment commonly resulted in 30-40% reductions in total costs, enhanced business services, improved competitiveness and rapid financial ROI. In fact, the business ROI on replacing an old server with new is staggering and in many cases can pay for itself in less than 12 months, by reducing power / cooling costs, avoiding new construction, simplifying and reducing maintenance costs, reducing applicaiton and OS licensing costs and more.

What characteristics should you look for in a new server hire? (to maximize this savings and accelerate ROI)

ð       Versatile Performance. Consider a wide range of benchmarks and application usages when evaluating capability of the server you intend to hire.  Servers hired today for a specific task may likely get re-purposed over their lifetime.

               Also ... if your workload is specialized and data demanding (like database / enterprise resource planning / business intelligence) consider a specialized

               server with unique skills, like larger compute, I/O and memory scalability to handle these larger workloads with increased reliability and headroom for peak loads.

ð       Energy Efficiency. Newer multi-core servers feature nearly 10x the performance / watt of single core servers. Use the SPECPower benchmark to assess which servers are the most energy efficient.

ð       Virtualization. When virtualizing servers, hire servers that can support robust consolidation ratios and built for flexibility and versatility. Many new hardware-assist technologies help boost the ability to migrate virtual machines (application/OS combination) from one server to another.

ð       Standardization. Unlike hiring employees where diversity is valued and encouraged, using a smaller number of reference designs in your IT environment, can lower operating and support costs.

A final consideration for hiring new servers is total cost of ownership. Just like hiring people, you must consider the incidental or hidden costs behind the salary and sign-on bonus (do these still exist today?). The average life for a server is 4 years. Buying an inexpensive server for your needs today may optimize today’s budget but may end up costing you over the long run in software licensing, power/cooling. Intel IT recently did an ROI analysis on buying higher end processors and found that using higher end processors reduced TCO significantly – by doing more with less.

Last year, Intel IT fired about 20,000 servers and more are expected to receive pink slips in 2009 - read more about this in the 2008 Intel ITannual perfomance report

If your goals are to lower costs, improve services and boost revenue while increasing business competitiveness, then replacing aging server infrastructure is an Intelligent Investment. Learn more at

Are your single core servers at risk of losing their jobs?  If not, they should be!

So the Question is ... Will You Cut IT Costs and Boost Business Competitiveness by downsizing your Server Infrastructure in 2009?