The Perfect Decision

February 11th, 2008 at 05:02am Todd Epple - Iasta

A recent article popped up in Network World about another vendor in the industry extolling the virtues of “utility computing”.

Perfect Commerce, much to the chagrin of its remaining internal IT staff, is outsourcing all of its datacenter operations to Savvis in a $5 million 3-year contract. When I first read this I was shocked at the price tag, which I am sure has been discounted considerably from Savvis’ list pricing considering the public press release and marketing help that Perfect has given them. Still how could this cost be justified in a company the size of Perfect (150 employees)?!?

Digging deeper into the press release, I have found the reason…

“A couple of years ago, we had between 500 and 600 servers at Perfect Commerce in about 29 different application groups.”

Bingo. Now it all makes sense. They had about four times as many servers as employees! And who knows how many other assets (desktops, laptops, printers, routers, switches, firewalls, etc) the overburdened IT staff was responsible for managing. And 29 “application groups” is an awful lot for a small software company to even have a hope of providing decent customer support.

I am sure the strain of supporting SO MANY legacy systems (40 servers per IT employee!!) that were cobbled together or acquired over the years was causing a lot of stress and strain on the understaffed IT department especially considering the skyrocketing demands (and costs) of compliance/security and higher availability levels. So instead of tackling these problems in-house the decision has been made to throw a lot of money at the problem.

Thankfully, Savvis has the right prescription for this problem: server consolidation and virtualization. This clearly should have been accomplished many years ago and, when completed, will increase the efficiency and manageability of these assets. With the sheer volume of virtualization they will need to do this, it may be a good time to load up on some more VMW or EMC stock while they are down. Another winner in all of this is the environment. 600 servers at 300 watts each consume about 180 kilowatts, or almost $500 per day in electricity not including the extra AC such a datacenter would require. Cutting the number of physical servers by more than half would be good for Perfect’s carbon footprint.

So, to recap, here are the winners and losers:

Winners:

Savvis
EMC and VMW
The Environment
The Economy in Atlanta and D.C.

Losers:

Perfect’s IT Staff
Kansas City Power and Light
The Kansas City Economy
IT Consultants (the article says they were paid $300/HOUR!!)

It is clearly very difficult to have to manage this many legacy systems and products for any company, both from an IT perspective and from a customer service perspective. I’m really not sure where this leaves Perfect’s customers–will the quality of their support improve or not? Will the money have been better spent improving the support or the products versus paying the infrastructure tax of legacy acquisitions? Stay tuned…100% acquisition retention is on the line!

Entry Filed under: General, Technology, e-Sourcing Marketplace

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