More than 425 CEOs, CIOs and IT managers attended an InformationWeek TechWebcast last week on “Driving Business Value Through Server Consolidation.” Featured speakers from Giga Information Group, IBM and Peregrine Systems identified current trends and shared insights for how IT organizations can implement a planned strategy for simplifying and consolidating the server environment that will ensure lower costs and increased operational efficiency.

Brad Day, Giga’s vice president and senior analyst for Computing Infrastructure, presented an overview of the trend in server consolidation, which has been largely driven by the need for organizations to optimize capital and operational expense for the enterprise data center. Day explained that the crisis in the data center stems from the proliferation of servers in the last decade due to the increase in size and complexity of the modern enterprise. However, as organizations’ needs downsized in the last few years, the number of servers remained the same. As a result, many organizations have too many servers, which may be operating at seven to 15 percent of their capacity.

In recent months, Giga reported that more than 40 percent of global enterprises are undertaking server consolidation in some form, prompted primarily by increased pressures for cost containment in the face of increased IT budget pressures. According to Day, there are several critical success factors in any server consolidation project: (1) define a well-articulated vision of the business purpose and end-state, (2) identify the type of consolidation that an organization needs and (3) choose vendors who can provide an accurate assessment and implement the right methodologies.

Peregrine, a leading provider of Consolidated Asset and Service Management solutions, offers critical software needed for successful server consolidation and application rationalization projects. Through its strategic alliance with Peregrine, more than 350 IBM consultants have been trained to evaluate and implement consolidation projects leveraging Peregrine and IBM’s best practices.

“There are a number of strategies that can be implemented to rationalize the server infrastructure, depending on complexity, cost and desired business impact,” said Ed Chopskie, Peregrine’s director of strategic marketing. “The issue is that any chosen strategy may introduce trade-offs in server functionality and how the IT department is able to support the business. An accurate assessment of the right strategy for any organization requires a thorough understanding of its server inventory, load capacity, applications used and the lines of business supported.”

According to Brian Shaw, senior consultant at IBM Business Consulting Services, the goal of any server consolidation project is to optimize the IT infrastructure from a business and technical perspective. There are four types of server consolidation strategies that can be deployed depending on an organization’s needs. They are: centralization, reducing the number of data centers; physical consolidation, reducing older servers with fewer more powerful systems under common platforms; data integration, centralizing disparate data formats onto a single platform; and application integration, migrating several applications onto integrated servers.

As part of the consolidation project, IBM proposes a strong “Assess and Plan” phase where the current assets are carefully inventoried and systems are evaluated to determine what mix of the four server consolidation strategies is most appropriate for the business needs.

“IBM feels so strongly about the benefits of server consolidation that we have already completed several projects internally,” said IBM’s Shaw. “We have seen reduced capital expenditures, software upgrades and administrative costs due to fewer servers. In the IBM Boulder facility alone, we have a 700 percent increase in users-per-system image while supporting daily traffic as high as 4.8 million transactions.”

Peregrine and IBM offer several business solutions to address the challenges of server consolidation and help the IT organization plan, manage and report on the value of the consolidated environment, including Asset Tracking, Software License Compliance, Change Management and Service Level Management solutions. The foundation of Peregrine’s offerings rests on a common configuration management database (CMBD), based on ITIL (Information Technology Infrastructure Library) standards, allows all asset and related data, including physical information, contracts and warranties, to be stored in a single, centralized data repository.

IT managers can use Asset Tracking and Software License Compliance to inventory and manage all IT assets and related software licenses. Change and Service Level Management solutions enable businesses to manage all changes related to the consolidation project and ensure that agreed-upon availability and performance levels are met. Finally, Peregrine business intelligence solutions enable IT managers to report on the total fixed and variable costs of their IT infrastructure as well as IT service performance and business service availability.

“Consolidation can result in dramatic cost savings and service improvement, but it needs to accurately map to business goals in order to be effective at a strategic level,” said Peregrine’s Chopskie. “Peregrine’s solutions give insight into IT across the enterprise, including human resources, finance and accounts payable, who need visibility into the infrastructure for planning, budgeting and staffing.”

This InformationWeek TechWebcast is available for replay at .