Business white paper Data center consolidation Obstacles and how to overcome them Business white paper | Data center consolidation: Obstacles and how to overcome them Table of contents 3 Roadblocks in an evolving journey 3 Where are data center consolidation efforts getting stuck, and why? 4 Getting buy-in from key stakeholders 5 Getting buy-in for a new business model 7 Getting buy-in to support funding and acquisition 8 Conclusion Business white paper | Data center consolidation: Obstacles and how to overcome them Roadblocks in an evolving journey As the 2015 Federal Data Center Consolidation Initiative (FDCCI) deadline approaches, agencies continue to struggle with the broadened definition of “data center.” Meanwhile, both federal and state data centers have been challenged to upgrade or replace infrastructure strained by increased data volumes and service demands, as well as accommodate additional regulatory developments such as Cloud First, the Digital Accountability and Transparency Act, energy efficiency requirements and federal legislation—like the Affordable Care Act—that are delivered at the state level. At the same time, sweeping changes in data center technologies and business models have caused the original, more straightforward, task of shutting down physical facilities and decommissioning servers to evolve into a much more complicated mission. The concept of “converged infrastructure”—in which a data center rolls computing, storage and networking into a self-provisioning pool of shared resources”—has taken hold, “growing at about a 50 percent clip over the past year,” according to Gartner analyst Andrew Neff in CIO magazine. Complicating matters even more is growth of the cloud for enterprise IT delivery; Gartner predicts that nearly half of large enterprises will have hybrid cloud deployments by the end of 2017. Reconciling this approach with traditional server-based delivery remains a struggle for government chief information officers (CIOs). Consolidation may diminish IT sprawl, but a move to the cloud raises concerns about the loss of control and security. Some consolidation successes have been achieved. For instance, the Army has decommissioned 1,100 servers to date, and the Pentagon has moved 10,000 email accounts to a cloud-based service run by the Defense Information Systems Agency (DISA). In the state of South Dakota, comprehensive centralization of IT has allowed operations to run at a cost of only $0.60 for every dollar spent before consolidation. Much work remains, however. According to a 2013 article in Federal Computer Weekly, “Members of both parties in both chambers are increasingly frustrated at the pace of data center consolidation, an initiative of the federal CIO’s office that promised billions in energy, equipment, and real estate savings, but has yet to deliver.” At the state level, the percentage of IT consolidation projects that reached completion had remained nearly constant, rising only from 29 to 30 percent. Where are data center consolidation efforts getting stuck, and why? Gaps in equipment inventories and cost estimates, insufficient metering tools, the lack of a common set of metrics and poor planning on how to increase efficiency have been cited as roadblocks to consolidation. So has the fragmented nature of government operations. Ad-hoc, disconnected efforts to swiftly respond to citizens’ needs and meet mandates and requirements have resulted in “technology sprawl.” Data center managers are further challenged to recognize savings in real estate, energy, workforce and equipment when these departments are all supported by differing funding streams, often from different agencies. In this environment, organizational buy-in—getting projects and budgets understood, accepted and championed by the right stakeholders—has emerged as the overarching obstacle to success. 3 Business white paper | Data center consolidation: Obstacles and how to overcome them In February and March 2014, Deltek interviewed the leaders of several federal and state data center initiatives for their perspectives, as well as representatives from HP. HP has guided consolidation efforts at hundreds of organizations, including DISA, the U.S. Environmental Protection Agency, the Department of Energy, public utilities, school districts and state agencies, as well as private-sector companies such as ING and Coca-Cola. Its own consolidation of 85 data centers down to six was one of the world’s largest. Common challenges included getting buy-in from key stakeholders for a new business model and to support funding and acquisition. This paper examines these challenges and presents ways the right technologies, practices, and approaches can be used to overcome them. Getting buy-in from key stakeholders According to an October 2013 Deltek report on federal cloud, data center, big data and mobility trends, “Personnel resistance is more difficult than the technical aspects of consolidation, which have been made easier through approaches such as infrastructure convergence. Turf battles over servers and applications will likely increase with the use of software-defined networking and private clouds.” Interviewees cited the following obstacles: •Fragmentation: One interviewee from a federal data center mentioned 30,000 staff members spread across over two dozen different groups, with “not a lot of communications going on between us.” •Fear: At one data center, business owners and departments feared that consolidation teams didn’t really understand their business requirements. At another, IT specialists were afraid to open up their systems to others. According to Helen Tang, WW Leader, Converged Infrastructure at HP, when an organization is entrenched in its current processes, people may fear they will get bypassed if new technology is adopted. •Reluctance to give up control: Narrowing down applications can be “a tough swallow for the IT shop,” said Colin Coyle of HP. In one government IT organization, many of the larger agencies resisted consolidation because they didn’t want to give up control. According to the HP team, agencies also have trouble determining what to tackle next. Often, the low-hanging fruit—like closure of a defunct facility—has been picked, and easy wins—like consolidating email in the cloud—have been accomplished. Agencies may lack a plan for what’s next, or try to accomplish next steps all at once. Interviewees cited proactive engagement, defined processes and proven best practices as key to overcoming these roadblocks. They have found success through intensive crosstraining, formal change management and projects that unite divisions toward a shared goal—like developing a common set of standards—as well as consolidating infrastructure and development efforts under one director. A February 2014 House amendment to the Federal Information Technology Reform Act also now stipulates that department-level CIOs own the IT budget and FDCCI plan. HP has successfully tackled the buy-in challenge for years with its Data Center Transformation Experience Workshop, which leads customer stakeholders to consensus on a consolidation effort’s scope, scale and critical success factors across several domains, including management transformation and organizational change. From the workshop’s findings, HP develops a data center’s roadmap and step-by-step recommendations. 4 Business white paper | Data center consolidation: Obstacles and how to overcome them Figure 1. The HP Converged Infrastructure Capability Model maps an organization’s current state across critical domains. HP also uses knowledge from 20 years of consolidation efforts, plus insights from research at HP Labs, to benchmark a data center’s readiness for transformation. This helps minimize the risk of a data center making the wrong investments, or making the wrong investments at the wrong time. One particularly important consideration is the condition and capacity of real estate and utility infrastructure to take on new equipment and services. HP estimates that data centers can cost $750–$3,000 per square foot, and support equipment can cost three to five times as much. According to Colin Coyle of HP, “IT infrastructure mistakes only last 18 to 36 months, until the next refresh. Real estate and facilities mistakes last for 10–30 years. Many stakeholders in the consolidation process don’t realize this.” Getting buy-in for a new business model Ultimately, convergence puts a data center in a better position to grow and scale for future needs and capabilities. But this new business model demands fresh thinking, plus the ability to balance new technologies and management solutions with old infrastructure and processes— all areas of challenge. When users at one interviewee’s data center needed new servers, for example, they continued to purchase them, rather than consider virtualization, infrastructure sharing, remote hosting or systems with more built-in intelligence, greater automation and energy efficiency. At another data center, departments that did not completely understand new infrastructure definitions “undersized” or “oversized” estimates for future needs. Staff members also expressed concern about maintaining operations during the transition. Would data remain secure? Would they be able to swiftly access it during the virtualization process? Some employees resisted a move to virtualized servers because of the lengthy security encryption process. “Customers must be comfortable with the new technology models. You must prove the performance and security of the solution,” said Sam Ceccola with HP. To accomplish such a comfort level, interviewees used dashboards, tours for non-techies and trial implementations on test systems. Importantly, they showed tangible results for daily operations and the bottom line. 5 Business white paper | Data center consolidation: Obstacles and how to overcome them For example, virtualization of 150 physical boxes at one data center decreased server provisioning time from days to minutes, and freed up staff time previously spent on maintenance. When HP has installed blade-based cloud services—which can reduce physical space requirements by up to 98 percent—in a Fortune 500 corporation, a large school district and a large county district, each reported outcomes that included: •A dramatic reduction—from two weeks to two days—in time spent on end-of-year activities •A 30-percent gain in administrator-to-server efficiency •A 40-percent reduction in power and cooling costs and 15 percent reduction in server maintenance costs •Hundreds of thousands in annual savings in software licensing fees and network service provider costs •A projected, cumulative five-year net storage benefit of $2.2 million HP experts said that they often start customers out with a pilot project to test the waters and a “crawl-walk-run” approach for adopting new processes and technologies. According to HP’s Liz Vogel, customers who have achieved incremental consolidation wins are now willing to consider “as a service” initiatives or newer converged systems that integrate servers, storage, networking, management and support. By increasing an organization’s ability to move from reactive to proactive operations and capitalize upon innovations such as cloud computing that enhance decision support, a converged system offers many near- and long-term benefits. Agencies are able to order new capabilities in minutes, launch new applications and services in days (without the burden of integrating components) and deliver their services more quickly. Yet the time, resource and administrative investment that needs to be made—well before benefits are realized—can be daunting, particularly in an environment of constrained budgets, time, staffing and skills. One way to combat resistance is by keeping things simple. Ways of doing so include using: •A single point of control: Designed from the input of hundreds of users, the HP OneView dashboard gives data centers an automated, comprehensive view for managing physical and virtual environments. •Tools that streamline operations: The pre-packaged application templates and customized service catalogs of HP Cloud Maps solutions provision new infrastructure and deploy new applications in less than an hour. •A converged system provider: According to Allen Greene with HP, “With multiple providers or singularly implemented products, you don’t know if they’ll implement the same standard.” A converged system offers the benefits of consistency, transparency, efficiency and cost savings, as well as one “throat to choke” for support services. 6 Business white paper | Data center consolidation: Obstacles and how to overcome them Figure 2. Screenshot of the HP OneView dashboard. Data Center Consolidation Expertise Starts at Home F rom 2005–2008, long before the FDCCI mandate was driving activity in the federal government, HP was hard at work on its own initiative, consolidating 85 data centers with legacy IT systems into six next-generation data centers. By 2009, the transformation had yielded results, lowering IT costs by more than $1 billion a year from fiscal 2005 levels—savings that were reinvested in future go-to-market efforts—and providing the infrastructure to enable future business growth.1 Getting buy-in to support funding and acquisition Even with initial buy-in and incremental wins, a tight funding environment, “siloed” budgetary structures and old procurement methods may present additional roadblocks. “Up-front investment, even if you can get a return on investment in three years, is becoming extremely difficult to find in this current environment,” Rear Adm. Robert Day, CIO of the U.S. Coast Guard, told CIO magazine in October 2013. Interviewees from state data centers also cited a pressure to make a business case—and difficulties doing so. One data center, for example, had no measurement tools or metrics for energy savings. According to Coyle, “Government’s fragmented nature and a lack of measuring processes and tools can make demonstrating ROI difficult, even with the addition of federal government measurement tools like PortfolioStat.” Adding to the procurement challenge: Current ways of purchasing physical products may not accommodate the new business model of renting an integrated suite of services via a “by-the-drink” utility model. An experienced partner can help. HP, for instance, has tools and skills for conducting energy audits and measuring energy savings in ways that align with concurrent surveys of current infrastructure and applications inventories. HP is also experienced in dealing with multiple client contracts, having done so in the second stage of its own data center consolidation process. An experienced partner can also assist government data centers with finding funding— important for the 75 percent of government respondents who, in a 2013 survey by Deltek, cited “very little or no budget for consolidation efforts.” According to Coyle, this could involve leveraging energy savings to purchase a server that can perform 10 times the workload or linking data consolidation initiatives to other mandates, such as those related to energy efficiency or facility footprint reductions. Energy and real estate savings are large savings contributors—and two prescribed FDCCI goals—that often get overlooked in discussions focused solely on IT virtualization, automation, and application rationalization. http://www.hp.com/hpinfo/newsroom/ press/2008/081201b.html?jumpid=reg_R138_ USENe 1 7 Business white paper | Data center consolidation: Obstacles and how to overcome them Why HP Data centers seeking guidance can benefit from a partner that has helped others navigate the transformation and gained the skill, knowhow and lessons learned that come from the experience. HP is such a partner. • HP’s multidimensional data center consolidation and convergence team delivers end-to end support, from facilities to infrastructure to operations to service delivery. “We are in a unique position to understand the co-relationships, dependencies and points of leverage,” said Tang. • HP has a proven track record in every aspect of data center consolidation and convergence, including converged infrastructure, performance-optimized and modular data centers, data center assessment, cloud services and application modernization. HP’s critical facilities and power management team can identify energy conservation opportunities and mitigate the risk of downtime and mistakes during a migration. • Through groundbreaking partnerships and alliances and its own research and development lab, HP has become a leader in many aspects of converged infrastructures. These include blade-based cloud systems, cloud brokerage, software-based networking, safety and analytical tools for cybersecurity and innovations like Moonshot, the world’s first software-defined server. • With the Performance Optimized Datacenter (POD), HP is leading one of the industry’s largest market shifts. Completely converged IT and facilities infrastructure—including power, space and cooling—arrive at a client site pre-configured and pre-tested. Government buyers can purchase the containerized data center as IT equipment rather than a capital real estate investment, and its low power utilization effectiveness ratio enables it to pay for itself in less than five years. Table 1. One example of the real estate savings achieved in phase 2 of HP’s own data center consolidation initiative. Assessed Closed Sq/Ft recovered Savings Labs >525 >475 >135,000 >$14M Data centers >200 >70 >425,000 >$200M Conclusion Having the best technology in the world is only effective if the full data center transformation effort is understood, accepted and championed by the right stakeholders. The fragmented structure of government operations, buying patterns and new business models emerging for data center transformation have created formidable obstacles in the area of organizational buy-in. However, proven practices, demonstrated results and tools for simplifying the journey can get organizations past this common challenge—and get their data center consolidation efforts moving to the next phase of transformation. This white paper was written and developed as part of a funded engagement with a client and should not be interpreted as a statement of opinion about the strengths or weaknesses of any vendor, nor serve as an endorsement by Deltek. No assessment of the capabilities of any of the client’s products or competitive products of this client was developed by Deltek. This white paper was written by Deltek’s GovWin Consulting organization, which conducts custom research projects on behalf of individual customers. Furthermore, the data used to develop this analysis is drawn from publicly available information; market reports published by Deltek; and interviews with both federal and state personnel. At their request, their names and affiliations have been kept anonymous in the paper. Learn more at hp.com/go/usgov • HP has developed an unparalleled trove of best practices from its convergence initiatives for customers and its own data center. “Because of our culture of sharing, we make these available to our customers on their respective journeys,” said Tang. Sign up for updates hp.com/go/getupdated Share with colleagues Rate this document © Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. 4AA5-1856ENW, June 2014