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Amidst The Gloom, How CIOs Are Driving IT Infrastructure Innovation

With growth projects on hold, now is the time to clean up IT operations and drive hard bargains with vendors.
Time Is Right To Consolidate

Manufacturing and technology company Emerson recently completed a major data center consolidation, a departure from when decentralized IT was considered necessary. "A lot of decisions were being made at individual units, so that we could react to changing market conditions with a lot more speed," says CIO Steve Hassell.

But that structure produced too much waste. After multiple acquisitions, the company had 135 data centers across the country. So Emerson decided to consolidate into a massive data center in St. Louis, and as part of the process did something a bit different--had the IT staff meet with the building architects.

One of the most innovative decisions to come out of those meetings was to have the building's heat exchangers sit on the roof directly over the air conditioning units they support. Architects were initially wary of the idea, since that's not how it's done; typically, heat exchangers are on the ground behind a building.

But putting them on the roof would let Emerson take a modular approach to expansion, adding additional cooling space only as needed as it gradually shuts down and incorporates other centers into the main one. The modular approach isn't practical using equipment on the ground, since it would require digging up the ground to lay pipe for each installation. The standard approach would've meant buying all the exchangers up front and laying miles of copper pipe underground for them, knowing they wouldn't come online for years as data centers were wound down. The architect team acquiesced.

The data center opened this summer and will initially use only one-third of its capacity, but as a result of the roof idea, it isn't using any more air conditioning than it needs, Hassell says. What's more, putting the heat exchangers so close to the AC units has saved Emerson 2.5 miles in copper piping that would've gone into the ground. "Not only are we saving money in a downturn, but more importantly, we've provided a strategic platform to consolidate and grow as the economy turns around," Hassell says.

The Economics Of IT

In some instances, a lower-cost infrastructure already is fueling growth-oriented innovations. Investment bank Cowen is using Linux-based Ingres databases as it expands its group of program traders and develops a portal for the group to share analytics with customers. Program traders perform complex analytics to help fund managers make decisions about where to invest money, work that involves very large data sets. Ingres is mature enough to handle that workload, but cheap enough to help Cowen grow the program, says CIO Dan Flax.

Nationwide Insurance's William Miller say he's seeing a lot more interest these days from business execs in IT infrastructure issues, which makes it easier to get these projects going. "It's reminiscent of the Y2K scramble, where a lot of tech-ignorant people got tech savvy really quick," says Miller, associate VP and controller for IT at the insurer. "My hope is that we don't lose that when margins fatten up."

Now more than ever, it's important for IT and business to have a tough dialogue about infrastructure investments, Miller says. He cites the example of a business leader that demands a highly redundant server and storage system so the application won't go down, but the application isn't critical enough to merit the cost.

"What you really want to do is expose the business to the economics of IT in a way that makes sense and is understandable to them," Miller says. The company uses software from Digital Fuel to track the cost and use of IT by individual business units. "It's not a cost pressure. It's a value pressure," says Miller, "You spend more if there is value in the investment. Companies that don't understand that relationship flat out aren't making it in any industry they're in."

No doubt business is slow. Often brutally so. But companies can't let their IT infrastructure fall behind their competitors'. "The bottom line is budgets may be constrained, but the demands on technology are growing," says JPMorgan Chase's Chiarello. "It's not about spending more. It's about spending smarter." That means recognizing the unique opportunities that come with a down economy, and most importantly, understanding that the infrastructure isn't just about keeping the lights on. It's about tuning the engine that makes innovation possible.

Impact Assessment: Infrastructure Innovation
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