To help organizations wrestle with budgetary cuts in the poor economy, tech research firm Gartner is offering seven ways to reduce costs in the data center during the next 12 to 18 months.

Gartner research VP Rakesh Kumar released the list of practical recommendations Thursday to offer a hand to IT managers who have to deal with increasing computing demand while also trying to cut costs. "While responding to contracting budgets, IT managers are expected to deliver an ever-increasing level of service to users, and many are charged with showing tangible financial savings as part of cost-cutting measures," Kumar said in a statement.

First on Gartner's list is rationalizing all hardware. Such an action will help with asset and inventory management and provide a clear picture of the machines being used effectively and those that are not. In addition, rationalization can lower maintenance and support charges and lower energy costs, typically more than $400 per server, per year.

Overall, hardware rationalization projects yield savings of 5% to 10% of the overall hardware costs, Gartner said.

Second, Gartner recommends consolidating data center sites, which typically range from large, complex installations to small machine rooms. Such a move gets rid of redundant IT assets, software, maintenance and support, and disaster recovery contracts. Savings from consolidation can range from 5% to 15% of the overall data center budget.

Third, the tech researcher advises managing energy and facilities costs by raising the temperature of the data center to 24 degrees Celsius to reduce the level of cooling required; use outside air, which is free, as an alternative to expensive air conditioning, when possible; and use server-based energy management software to run workloads in the most energy efficient way, such as taking advantage of lower energy tariffs.

The fourth recommendation is to renegotiate all hardware, lease, software, maintenance and support contracts, getting rid of those that are too expensive and securing lower payment schedules for others. Vendors are used to reviewing contracts during bad economic times, Gartner said.

The fifth cost-cutting method is to manage people costs, the largest single cost element for most data centers. Gartner advises IT managers to review staffing levels and the types of skills needed for the next 24 months. In addition, the researcher recommends making maximum use of less-expensive overseas labor through outsourcing when it make sense. Countries listed include Brazil, India, Poland, and Romania.

The sixth recommendation is to delay the procurement of new assets when possible. Instead, Gartner suggests negotiating maintenance and support on servers whose working life is being extended. In addition, IT managers need to ensure that software will still be supported on older servers.

Finally, virtualization of hardware should be encouraged to improve operational efficiency, as well as to support consolidation, decommissioning, and cost management programs. For most users, virtualization should reduce hardware, which translates into lower operating depreciation costs and less-expensive maintenance and support.

Virtualization is also a good way to control energy costs, Gartner said. Effective use of the technology can reduce server energy consumption by as much as 82% and floor space by as much as 86%.

InformationWeek has published an in-depth report on server virtualization. Download the report here (registration required).