Data Center Restructuring

As the excitement around mergers and acquisitions fades, corporations often find they are “overstocked” in technology – specifically in their data center portfolio. Such was the case with a client in the survey and ratings industry, who needed to complete a consolidation and sourcing analysis on their hodge-podge of acquired data centers. They also wanted to…

  • define the role that outsourcing could play in server consolidation, if any,
  • improve data center alignment with business goals and operations, and
  • identify cost savings.

PM Kinetics was happy to take on these tasks, using the following tactics:

  • First and foremost we needed to collect data – data on servers, locations, software and hardware licenses, room locations, application portfolio, network topology, and all the associated costs.
  • Next, we developed a classification model to help prioritize any future migration; not all data centers are the same size or of relative importance.
  • Then we developed a pro-forma staffing model to support cost analysis against current internal staffing levels.
  • The last step was business case development with recommendations for using outsourcing complete with a detailed sourcing strategy.

At this point the client had the option of conducting vendor meetings to vet potential partners and execute against sourcing strategy, or having us do it. They chose the former.

We helped develop a database of servers, applications, and locations, and assigned costs to operate in the current support model. The transition to the selected vendor came next – $1.2 billion contract for business and “knowledge processes” with Mumbai-based Tata Consultancy Services. This was most recently increased to $2.5 billion.

While the project and resulting IT consolidation had significant costs, the result over time is reduced data center costs, greater efficiencies and scale – a worthwhile investment indeed.

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