All told, Alper expects to save more than $7.5 million through a 30% reduction in IT staff, and through lower server operating costs. "Our IBM mainframe alone is more than the cost of all of the servers we have from Sun put together," he says.

The burdens and costs of administering a large number of servers is beginning to weigh heavy on the minds of more than one IT manager. "Server administration is typically underestimated," says Wayne Kernochan, VP for platforms and services at the Aberdeen Group, a research firm. "But just keep reminding yourself that hardware is cheap and people are expensive. If you throw enough servers at a problem, you'll create a real administrative problem. It's inevitable."

At PageNet, a Dallas provider of wireless messaging services, a consolidation project is now taking place that should save the company millions of dollars per year, says Ron Fellhauer, senior manager for open systems services. By migrating from a legacy environment of Data General servers running DG/UX in about 65 locations to two Hewlett-Packard N-class servers running HP/UX in the Dallas data center, PageNet expects to be able to reduce the number of employees it dedicates to administration tasks, as well as lower maintenance costs.

Until recently, each of the company's 65 locations operated independently--with its own customer-service department, billing department, inventory system, and servers. The company is about one-third of the way through its consolidation, and expects to finish by March. Fellhauer says that even though the consolidation project will require the vast majority of the company's network connections to local offices to be upgraded, PageNet will still save significant dollars and manpower.

Maintaining performance is a top concern to many IT shops consolidating their architectures. Fellhauer is using several tools to help ensure service to users, including HP's MeasureWare, which provides performance data on server activity, and Tibco's TIB/Hawk for monitoring applications, tracking data flows, and identifying usage trends.

Jamie Fralick, server platforms director for Manulife Financial Corp., a Toronto insurance company with more than 8,000 employees, says he's also implemented measures to make sure performance doesn't suffer as the company scales back its systems. He's making sure that workloads are intelligently balanced across a decreased number of servers as the company decreases the number of servers in play, he says.

"If I've got an [internal] customer in our investments division running an investment application, I don't feel comfortable putting that application on a common box with a financial application," he says. "I have to deliver both performance and availability, and I just don't think the operating systems and tools available for me to manage and guarantee the performance of that box are mature enough."

A desire both to rein in administrative costs and smooth the flow of information across departments were the driving factors to consolidate servers at the company. Manulife's IT model was very decentralized, Fralick says: Each of its five business units "owned" its own servers and applications. About two years ago, executives concluded that this setup made it too difficult to leverage data and technologies on a companywide basis. Now that the project is complete, the IT staff has been reduced by 20 to 25% and administration costs by about the same amount, says Fralick.

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Illustration by Valerie Sinclair
Photo of Fellhauer by Mark Perlstein