RealTime IT News

Consolidation Hits Its Stride

IT consolidation is on a fast track, and HP wants to hitch a ride.

In a briefing with internetnews.com, HP's director of IT consolidation solutions said IT consolidation has changed from simply meaning fewer "boxes" of hardware to a realigning of IT and business objectives.

"There was a period, after the dot-com debacle, of belt-tightening, and consolidation was about survival and clean up," said Steve Fink. "Now the business models are changing, and it's more about linking the business folks with IT."

Companies like HP, Sun and IBM are looking to cash in on the bottom-line objectives most enterprises have –- how to do more with less, i.e. consolidation.

Whether it's consolidating servers into a rack blade solution, or reducing multiple servers to a newer system that uses virtualization to manage multiple environments, IT vendors are cranking out solutions they hope will give enterprises a reason to upgrade.

HP considers consolidation the second biggest revenue generator across its Technology Solutions Group, running a close second to its business connectivity and availability solutions.

According to IDC, IT consolidation is a multi-billion opportunity.

"There are millions of copies of Windows server software, and some of them are old. Companies want to gather those up and consolidate as they prepare for Longhorn," Jean Bozman, an analyst with IDC, told internetnews.com referring to Microsoft's next-generation server operating system.

"HP has led in Windows server sales for many quarters so it's not surprising they would be a leader in this area, as well as Unix consolidation.

Bozman notes there are specific advantages for IT departments to having fewer servers replace many.

"You have fewer moving parts, fewer people to manage multiple systems and a single system scales better. It's always good to have headroom."

IDC estimates some $8.8 billion will be spent on hardware consolidation in 2005. That amount represents 11.1 percent of all server and storage hardware spending, but does not include related services.

Windows and Unix represent 78 percent of the total consolidation opportunity today, according to IDC analyst Matthew Eastwood.

"Linux, at 9.2 percent, is fairly small now but will grow significantly in the next three to five years."

HP's Fink listed a number of customers he says have benefited from consolidation.

One, The Weather Channel, moved from a proprietary version of Unix to HP systems running 64-bit Linux. As a result, Fink said, TWC cut its IT costs by 56 percent with more automated systems that required fewer personnel to run it.

Another advantage of consolidation is freeing up increasingly precious real estate. Many enterprises still have the servers and systems they bought as part of a widespread upgrade intended to head off any Y2K-related problems.

IDC's Bozman said 1999 was a peak year for server sales that totaled some $60 billion.

"Then sales went down twenty percent in 2001, and started to comeback in 2003. We still haven't matched $60 billion but sales are headed back up in that direction."