Higher Ed, Lower Costs: Colleges Remake Data Centers

Driven by more austere state budgets and shrinking endowments, universities and colleges are looking for ways to improve the efficiency of their data centers. For technology vendors, that push could mean big business.

In the past two years, two significant sources of incomes for schools have dried up. Declining tax revenues have forced 43 states to cut their budgets, at least 37 of which are reducing their assistance to public universities, according to a report by the Center on Budget and Policy Priorities. Endowments are similarly suffering, with the average university's fund losing nearly 19 percent of its value in 2009, according to the recently released NACUBO-Commonfund Study of Endowments (NCSE).

The combination has led to pressures on the operations staff, including IT departments, at colleges and universities across the United States, says John Bennett, worldwide lead for Hewlett Packard's data center transformation solutions group.

"The issues in state budgets are 18 months old," Bennett says. "They (schools) have been more reactive to this than many businesses have been. Many of them are just coming to these conclusions."

The federal government has, for the most part, not come to the rescue: Most universities and colleges are not seeing stimulus funds, according to Thom Rubel, vice president of IDC Government Insights. "They are not enjoying new money, with the exception of some higher educational institutions who might seem some money out of research dollars in some stimulus funds," he says.

For enterprise technology firms, the trend bodes well for sales. Reduced budgets have left higher-education CIOs looking for ways to cut costs and many schools continue to run their data centers inefficiently, which means that more modern equipment, cooling infrastructure and monitoring systems could result in immense savings. Moreover, cutting costs in the data center does not mean losing capabilities, says HP's Bennett.

"The increases in efficiency of servers, generation over generation, is pretty stark," he says. "The current [HP ProLiant] G6 servers, if you compare them to the servers from 10 years ago, you can replace them at 10 to 1, save $3,000 a year and still have room to grow."

One client, the University of Utah, reduced energy costs by 25 percent, paying back their modernization efforts in three months, HP's Bennett says.

"If you can have an ROI in the same planning period, it is a significant bonus," he adds.

HP is not the only company targeting the educational market. IBM, Dell and Cisco have all focused on helping institutions use their IT more efficiently. IBM, for example, helped Smithfield, RI-based Bryant University consolidate its data centers for more efficient operation.

"Their student population had grown, and they ended up with four different server rooms around the campus," says Jody Cefola, chief marketing officer for site and facilities group at IBM's Global Technology Services. "They were having availability problems, so they said that they wanted to reduce server sprawl."

Similarly, the University of New Hampshire IT department is currently in the early stages of collecting data on its operational costs and energy consumption, taking stock of the technology used within the IT department and assessing systems set up by other departments, independent of the IT staff, says Joanna Young, chief information officer for the Durham, NH, school. Budget pressures are no stranger to Young either: UNH's endowment dropped to $125 million at the end of 2009, from $240 million at the beginning of 2008. And, with the lowest per-capita assistance level in the 50 states, New Hampshire's colleges and university's cannot rely on additional state funds.

"Higher education has been slower to adopt this concept of consolidation and virtualization, so a lot of activity is being embarked upon now," she says. "Once we have all that data and a nice detailed understanding of what we have and the characteristics we have, then we will be in a position to plan and implement."

Young arrived at UNH in May 2009, just as universities and colleges were feeling the impact of the economic crisis. Formerly a senior VP at Liberty Mutual, Young sees the academic and private sectors dealing with similar concerns, but because of their different organizational structure, approaching them in different ways.

While the executive suite in a company can mandate policy for the entire corporation, a university frequently has to loosen the reigns on various academic department and researchers.

"Higher education is a different model; it is a different business," Young says. "What you tend to see, especially in larger higher-educational settings, is a department focus. You might have an academic department and they say, these are my needs, and that is how I have to meet them."

Young has a coveted resource as well: The total support of university administrators from early in the process. "We are operating with full buy-in from the provost's office, which is paramount," she says.

But even an information technology staff that has not convinced university leaders to support their initiatives can make some progress in reducing data center costs, says Bennett.

"If you are an IT leader in one of these institutions, and all you can touch is in your data center, then deal with what is in your data center," he says. "A lot of our business data center projects start small, and with success, they grow and replicate themselves."

"By all means, roll up the sleeves and get started," he says.