Server virtualization and cloud computing carry savings into 2010

Learn how a CIO saved more than $300,000 through server virtualization and cloud computing.

A combination of server virtualization, Software as a Service (SaaS) applications and, soon, cloud-based storage meant so much savings for Extra Space Storage Inc. in 2009 that a competitor is actually copying the IT model, CIO Bill Hoban said.

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 But for Extra Space Storage, a self-service storage space provider with 685 facilities and 2,500 employees, it has meant new functionality it couldn't have afforded otherwise, plus potential funding for other projects.

Extra Space Storage saved $100,000 to $150,000 on the cost of a new data center chiller when it introduced server virtualization. The company went from 63 servers down to 46 using VMware Inc.'s ESX and Hoban said he plans to reduce that number by another 31 servers in 2010.

Server consolidation also helped the Salt Lake City-based company avoid a costly UPS system upgrade.

Next up is the company's EMC storage array. The plan is to move all shared files on servers across departments onto the storage array -- and in turn have fewer virtual servers. The company will also set a cutoff point for stored customer information at 37 months instead of keeping such information indefinitely.

Customer information older than 37 months will eventually reside on a cloud service provider's infrastructure. Hoban said he's considering Amazon Web Services or Google Inc. as a provider for the customer-archived data, he said.

I think because we've saved money, it validates our cloud direction and a lot of other things we are working on. I think we'll continue to find enough cost savings to absorb new projects.
Bill Hoban
CIOExtra Space Storage Inc.

 "With a storage array, that's a pretty expensive piece of equipment to hold [archived] data, when it could be better utilized for real-time data," Hoban said.

Extra Space Storage has already made a pretty extensive move into cloud computing through partnerships with several SaaS providers including Salesforce.com Inc. and Centershift Inc., and with an integration service called Cast Iron Cloud from Cast Iron Systems Inc. Cast Iron has preconfigured templates for integrating common SaaS business applications and processes.

In terms of cost savings, about $97,000 in third-party consulting fees for coding was avoided through Cast Iron's templated services. Another $75,000 in savings was gained by building the company's internal help desk ticketing system into Salesforce.com, versus renewing a contract with an existing help desk provider.

The savings are recognized at the executive level, which allowed Hoban to get the budget to upgrade the company's agreement with Salesforce.com to the Unlimited Edition.

"I think because we've saved money, it validates our cloud direction and a lot of other things we are working on," Hoban said. "I think we'll continue to find enough cost savings to absorb new projects."

Let us know what you think about the story; email: Christina Torode, Senior News Writer.

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