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Maximizing the ROI of data center management

Data center managers are under increasing pressure to account for every penny they spend. Here's how to get the most from your money.

New analysis from Nucleus Research Inc. suggests that striking the right balance among storage capacity needs, personnel requirements and system reliability is the key to maximizing the return on investment (ROI) in data center technologies.

Analyst Kathy Quirk, who presented the Wellesley, Mass.-based firm's finding at TechTarget's Data Center Decisions 2004 conference, said several factors at work today are driving new investments in data center technologies. They include an increased demand for storage capacity, new data compliance regulations and a growing need among companies to make information accessible in new ways.

But despite an improving economy and a general willingness to make new investments, companies are still cautious about where their money goes, and ROI scrutiny is at an all-time high.

Nucleus studied the ROI-related practices of organizations in a wide range of industries, including financial services, government, energy, education and manufacturing. Quirk said the companies that were most effective at mastering the ROI balancing act were able to reduce storage and personnel costs, and limit downtime.

She said one of the first things that companies examine when seeking to improve ROI are storage capacity costs. "In terms of reducing capacity costs, we found that some companies implement a chargeback system, which allows clients to pay for the actual storage they use," Quirk said.

Other companies found that consolidating to a storage area network (SAN) was a worthwhile investment, because reallocating information from individual servers onto a network helped to improve utilization and freed up servers for redeployment or resale.

Investing in storage technologies can have a duel-effect on decreasing personnel costs, Quirk said. For some companies, Quirk said that an investment in a SAN helped to increase system reliability and reduce headcount because it was simpler to manage. Other companies looked to storage management software to ease administration, which also has a two-pronged effect of helping to reduce personnel levels.

Quirk said companies can also reduce the costs associated with downtime by investing in new storage technology and increasing the resiliency of their infrastructure. But if downtime isn't a major issue, such investments may not be necessary.

Conference attendee William J. Wisely is no stranger to the process of measuring ROI. Currently, the IT project manager with FMC Corp., a chemical company in Philadelphia, is currently helping to reevaluate and revamp his firm's data center for the future.

Specifically, his company is planning to in-source the management of its SAP enterprise resource planning application, a job that had been outsourced to IBM for about eight years.

As part of the overhaul, FMC Corp. is purchasing additional servers, networking infrastructure equipment and storage capacity, all of which requires a significant amount of ROI calculation.

To successfully measure ROI, Wisely said there has to be a solid alliance between the business and IT sides of an organization. But, he added, bridging the cultural gap between these two entities can be a challenge.

"In IT oftentimes we want to provide the best solution, which sometimes can be time consuming to deploy," Wisely said. "The business side often wants faster, less costly results."

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