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.”

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