Data Center Consolidation and Relocation
Executive Summary
More intelligent workloads, greater density of hardware, and an embracing of the multi/hybrid cloud model is resulting in Enterprise organizations’ data center and colocation strategy that once saw 90%+ space utilization now becoming a patchwork of underutilized data centers. This underutilized space, and cost burden, ultimately hits the bottom line and organizations are increasingly focused on data center consolidations and associated relocations to realign data center strategy with the new workload reality.
“By 2025, 85% of infrastructure strategies will integrate on-premises, colocation, cloud and edge delivery options, compared with 20% in 2020.”
David Cappuccio, Distinguished VP Analyst; Henrique Cecci, Senior Director, Gartner Research Report – “Your Data Center May Not Be Dead, but It’s Morphing,”
Rumors of the data center’s demise are greatly exaggerated. In spite of continued growth in cloud workloads, on-premises data centers of enterprise IT and managed services providers are not standing still. On-premises workloads and systems continue to see positive growth (see Figure 1).According to the AFCOM 2021 State of the Data Center survey, 58% of all respondents are seeing repatriation of cloud workloads back to on-premises or colocation. That said, the survey also revealed that the building, renovation, and management of data centers has plateaued in recent years.
Figure 1. UBS, 2021
With workloads moving from on-premises to cloud back to on-premises/colocation, without a corresponding increase in new data center builds, CIOs are focused on how to maximize the space in their existing facilities through consolidation, as well as potentially shrinking overall footprint through relocation.
EVOLVING DATA CENTER LANDSCAPE
Data center and technology leaders are actively focusing on density to ensure that they utilize the space they already have appropriately allocated. A recent survey conducted of senior IT professionals at 100 large enterprise companies found that for more than half of these companies CPU utilization is only between 20%-40%.
Part of the utilization equation is to determine what workloads are remaining in the data center vs. migrating to the cloud or co-location. Then, it’s important to understand workload growth rates, so current and future infrastructure can be right-sized.
Adding to the inefficiency, in the post-pandemic world, the workforce has shifted for many as well – with remote work distancing IT staff from the facilities that they manage. Many large enterprises are recognizing opportunities to consolidate under-utilized and/or inconvenient data center locations. This relocation of workloads can drive significant cost savings.
Energy Implications
According to the International Energy Agency, data centers consume approximately 200 terawatt-hours (TWh) of electricity, or nearly 1% of global electricity demand, contributing to 0.3% of all global CO2 emissions. Considering the underutilization within many large-scale data centers, the consumption of substantial amounts of energy imposes unnecessary costs on businesses and contributes to tens if not hundreds of millions of tons of CO2 emissions.
In the 2018 AFCOM Data Center report, the average data center density was about 5 kW per rack. In 2021, estimated mean rack density rose to 7.8 kW in their primary data centers. 20% of the survey respondents indicated that they have an active renewable energy strategy, with many more deploying further initiatives over the next 3 years.
Hardware density
Fortunately, hardware design is driving new innovations in density of compute, network, and storage capacity. According to Gartner, new, self-contained four-rack units can absorb the workloads from between six and eight racks of existing units. The majority of CIOs (62%) report that rack density has increased over the past three years, and 18% of respondents indicated that the change in rack density increased significantly.
New processors for data centers also play a key role, increasing computing power without increasing energy consumption. Software also plays a role, with AI-powered management tools more efficiently managing infrastructure, maximizing the utilization of their CPUs.
THE FUTURE
Fewer data centers, combined with improved automation and management within the smaller facility footprint, can deliver significant cost savings to organizations.
Energy savings
Data Centers are emitting nearly 100 million metric tons of carbon pollution per year. Reductions in electricity not only reduce costs and pollution, but they also help enterprises better manage compliance and advances overall sustainability initiatives. Consolidation can be a means toward achieving all these goals.
Hardware savings
With the new contained racks, the amount of workload migrated to new infrastructure is often 40–50% greater. Further, Gartner predicts that by 2025, data centers deploying specialty cooling and density techniques will see 20% to 40% reductions in operating costs.
Operational Impact
Consolidation is a strategic initiative that allows IT managers to achieve operational efficiencies while reducing the amount of time they spend supporting the ongoing technology environment. Fewer data centers reduces the operational burden on a business to which data center management is not a core competency. That can lead to improved business agility, particularly as funds are redirected from facilities to more strategic projects.
Additional people savings can be driven through greater density, automation, and even selective out-tasking. All three combine to allow organizations to keep IT staffing levels flat in spite of workload expansion.
GETTING STARTED
Overall data center transformation is a complex effort and typically spans multiple quarters, if not years. It’s important to break down the project into phases, and also to sequence efforts for maximum benefit. Perhaps the most important guiding principal is to consolidate infrastructure before relocating. Shifting an underutilized systems estate from one location to another merely changes geography. Consolidation can come in several flavors:
Hardware consolidation – are there underutilized resource pools that can be collapsed, either via virtualization or physical consolidation?
Workload consolidation – are there inefficient applications driving extreme resource consumption that can be retired?
Cloud consolidation – are there on-premises applications that can be moved to either IaaS or SaaS?
Automation – is the management infrastructure sufficiently automated to scale with growth demands?
During a consolidation and relocation, it’s also important to focus on the end-of-life of systems. Decommissioning and proper disposal of assets is a critical final step in the journey, protecting the business from data leakage and also removing physical assets from the facility. This end-of-lifecycle process should be holistic, including DoD-level data wiping as well as green disposal (non-landfill).
CONCLUSION
The more digitized our economy becomes, the more we’ll rely on data centers to support it. It is imperative for IT and business leaders to make the right choices to align infrastructure to their targeted business outcomes – from evaluating on-premises vs. cloud and/or colocation workloads, to improving utilization through consolidation and relocation. Partnering with organizations like CDS to assist in the planning and support through these efforts is an important first step.
