The Navy and Marine Corps Intranet, one of the largest networks in the federal government, is providing a lesson to the private sector on how to cut energy consumption and save capital costs.

The massive intranet ties together 700,000 users and disparate Naval facilities from the Marine Corps base at Quantico, Va., to centers and shipyards in San Diego, Hawaii, and Japan. The NMCI is run off 40 different server farms.

In 2001, managing NMCI was outsourced to EDS, the IT services group that recently became an HP subsidiary, and it won plaudits when it got the network up and running again one week after taking a hit in the Sept. 11, 2001, attacks. The Navy lost 30 of its servers and 70% of its space when an airliner hit the Pentagon that day.

Now EDS faces a different challenge: making the 2,700 physical servers that power NMCI a smaller target for charges of hogging power, consuming space, and draining the Navy's IT capital budget. Brandon Kern, the NMCI infrastructure manager for EDS, has taken a giant step in that direction by consolidating 1,200 x86 servers down to 200, each hosting multiple VMware ESX virtual machines.

That means Kern has installed an average of six virtual machines per host so far, and he'd like to achieve a higher, nine-to-one ratio overall as he tackles the next 1,500 physical servers. All in all, he thinks he can drop more than 2,700 servers down to 300. That will save $1.6 million a year in electricity costs.

"We will also save $1 million in our technology refresh budget next year," he adds. "Instead of $1.5 million, we'll spend $500,000. I only have to buy 300 servers instead of close to 3,000." Is it realistic to shoot for a 9:1 ratio in virtual machines per host? Kern says he's actually shooting for 12:1 or even a 13:1 ratio. The initial 9:1 leaves him with what he believes is enough headroom to expand on a set of 300 servers.

"We filled up the first 200 with the heavy hitters, Microsoft Exchange and other customer-facing services," he said of phase one of his program. In his second phase, he'll be dealing with less traffic-intensive applications.

It also matters what type of server you try to virtualize. Kern's server of choice is the Dell PowerEdge R900 rack server, a four-way system running quad-core CPUs. It's equipped with 32 GB of memory, six network connections and six host bus adapters for storage traffic. In other words, it's a heavily loaded blade server designed to host multiple virtual machines. HP and IBM also produce blades optimized for virtual machine loads.