by Laurianne McLaughlin

Extreme Data Center Makeover: Alcatel’s CIO Shares Seven Critical Lessons from a Massive Consolidation

Feb 21, 20088 mins
Data CenterOutsourcingVirtualization

Think your current IT project's scope is daunting? Alcatel-Lucent CIO Elizabeth Hackenson just finished the first leg of a three-year job to consolidate her company's 25 data centers and 125 server rooms down to just six data centers, including a unique new center near Paris that opens this week.

After the Alcatel-Lucent merger in late 2006, CIO Elizabeth Hackenson found she had 25 data centers and 125 server rooms spread across the globe. If all goes well with the company’s massive data center consolidation project now under way, that complexity will soon be history.

Ask the CIO: As part of our coverage, Alcatel-Lucent CIO Elizabeth Hackenson will answer written reader questions about transforming the data center. Selected questions and answers will post online. Got a question for Hackenson? Please email it to

“The goal is to get to six primary data centers and zero server rooms,” Hackenson says. The project, which started in June, 2006, is slated for completion in late 2009.

Alcatel-Lucent CIO Hackenson
Alcatel-Lucent CIO Elizabeth Hackenson

Hackenson’s team has just finished the first year of work; they’re down to 19 data centers and 88 server rooms so far, she says.

Beyond IT cost considerations, what business goals shaped the decision to consolidate so much, now? “We had two very important business goals,” Hackenson says. “First, reliability. We need an environment that can support our mission-critical applications worldwide.” Second, she says, the environment had to become more robust and flexible to business demands. “There’s tremendous growth in video and messaging across the enterprise,” she says.

That appetite for video is one reason that the company’s new tier-four data center, opening this week in Marcoussis, France, near Paris, and hosting the company’s most mission-critical applications, makes heavy use of multiprotocol label switching technology out to the company’s backbone, which allows for efficient handling of video streams, as well as caching and compression techniques on the networks. (This unique new center, which uses Alcatel-Lucent networking equipment and HP servers, will also be the primary network operating center to support Alcatel-Lucent’s application businesses and its services business group.)

The consolidation, for which Alcatel-Lucent hired HP Services as a consulting partner on everything from initial assessments to disaster planning, is expected to make a large cost difference as well: Alcatel predicts that the data center consolidation project will reduce the total cost of data center operations by 25 percent before the end of 2008. The company declines to share a figure for its total data center spending or IT budget.

The massive project comes at a tough business time for telecom equipment maker Alcatel—and its peers. In early February, the company reported a fourth-quarter net loss of about $3.8 billion, including a $3.65 billion write-down on its CDMA technology, a mobile standard that has fallen out of favor with wireless giants such as Verizon. Alcatel’s market value, roughly $13.5 billion, is now less than before the merger with Lucent.

How do you get from here to there when you’re doing a data center consolidation on this kind of scale, in this kind of environment? Hackenson and her consolidation project leader, Cliff Tozier, VP of global infrastructure, spoke to Technology Editor Laurianne McLaughlin about the project and shared seven lessons that she and her team have learned so far:

1. Consolidating applications is harder than closing server rooms. Hackenson and her team are still in the process of consolidating the company’s approximately 1,300 applications; she’d like to trim the portfolio to 500 to 600 applications. “The applications are almost more of a challenge than the data center,” she says. Explaining to the business the logic of closing small server rooms isn’t tough, but the business-side users feel application changes more closely, she says.

How is Alcatel-Lucent’s application strategy changing? “Instead of having many applications to support, we want to get to a centralized environment,” Hackenson says. “That’s a strategy change.” Previously, Alcatel let IT groups and employees in the various regions select their own applications, so the application set in Asia didn’t necessarily match the one in Europe. She notes, “This creates a little more pressure on the network folks,” who now have to ensure that response times for applications in HR and finance, for example, are similar around the world, despite the varying distances from the new main data center in France.

2. Virtualization has become key to IT flexibility. What role is virtualization playing in Alcatel-Lucent’s new data centers? “We can dynamically increase [capacity] in hours or days, whereas in the past, it would have been weeks or months,” Hackenson says. “When applications people need hardware, we can turn on services on demand,” she says, noting that developers now get quicker access to computing power for projects such as portals. “Our strategy is to push virtualization as wide and deep as we can.”

“Virtualization is absolutely critical,” Hackenson says. “We no longer can afford for every application to have its own environment. With that situation, we were 10, 20, 30 percent utilized,” she says, with the new goal being 60 to 70 percent utilized on servers. What’s been tough about the virtualization effort? “You have to get over the emotion of developers wanting to control the server that their application lives on,” Hackenson says.

3. Frameworks such as ITIL help ensure consistency across data centers. How did the way Hackenson and her team manage IT change as a result of the consolidation project? “We had decided to move to a centralized model for the whole IT organization,” Hackenson says. For the global team that Cliff [Tozier] manages, there’s a consistent set of processes and tools. This gives his team the ability to manage data centers remotely, which is what we’re doing in France. We don’t have to have large numbers of people physically in the data centers anymore.”

Further, Alcatel’s IT team uses the ITIL framework to apply one management model, for everything from change management to help-desk procedures. “Our goal is consistency,” says Tozier, “to leverage resources, drive down costs, improve service levels.”

4. You will hold your breath and await text messages as never before. On a human level, overseeing a consolidation on this scale will cause anyone a few nervous moments. “As it was mission-critical applications [being moved to the new data center in Marcoussis], we were always concerned,” Hackenson says. “What we tried to do in the planning was have backup plans to minimize all of the risks. There were tremendous ‘what if’ scenarios,” she says. “I would anxiously await the text messages from Cliff during these moves.”

For Tozier, some of the most stressful moments were during the move of the company’s fully clustered SAP application environments, in which he broke and rejoined the clusters. “We did it in test but it’s always different in production,” he says. “It worked very well but was nerve-wracking.”

Also stressful: IT’s time line had to flex frequently to be responsive to the business team’s changing needs. “We stayed away from month ends, quarter ends,” and so on, Tozier says, but business plans would change and IT had to be responsive to new timing concerns and change its plan accordingly. “The schedule was a huge challenge.” If you are planning a similar consolidation, don’t underestimate this hurdle, he advises.

5. You can find middle ground between outsourcing a data center and owning it all. One unique aspect to Alcatel’s new data center in Marcoussis: The company arranged a revenue-producing joint venture with Colony Capital that will rent the data center’s multiple buildings to multiple tenants. This way, Alcatel gets the state-of-the-art data center that it wants in Europe, without taking on all the costs. “It’s really the economics,” Hackenson says.

“The problem we all have in data centers is the ecosystem— power, heating, cooling⬦you’re paying for utilities and facilities you’re not using,” she says. “This is an alternative to outsourcing. You can share your environment. It’s a nice middle ground between outsourcing it and owning it.”

The arrangement also gives Alcatel, which is starting with about 22,000 square feet of space, the option to add space later if needed.

6. You can find model ways to keep your cool. Not surprisingly, power and cooling efficiency were key concerns as Alcatel planned the new data center in Marcoussis. The company worked with data center engineers, who suggested cement floors instead of the traditional raised floors, and advocated skipping the traditional “hot aisle/cool aisle” arrangement for data centers.

“I was skeptical,” Tozier says, “which is why we went to the modeling. With the help of HP, we did 3-D modeling of the building to prove the design would actually work.” That 3-D assessment was favorable, and plans moved forward. “We have air coming in from the sides, all the cabling is overhead,” and so far, so good, Tozier says.

7. Lead from the top with your services partner. In a project of this scope, it’s critical to maintain an effective relationship with the consulting partner you’ve chosen. How does Hackenson ensure that the relationship with HP Services works well, and what’s her advice to other CIOs?

No matter how good your own working team on the ground with the consulting partner, don’t underestimate the need for the CIO to work the phones, she says.

“I was in routine contact with Ann Livermore of HP [executive vice president of HP’s Technology Solutions Group]. I gave her a heads-up before critical milestones,” Hackenson says. Hackenson would make quick calls to remind Livermore that it was a big weekend for the Alcatel IT team; she believes this helped everyone stay on the same page regarding current top priorities and schedule.

Another cultural decision that helped: blurring the distinction of who was HP staff and who was Alcatel-Lucent. “It really was set up as one team, not an Alcatel team and an HP team,” Tozier says. “There wasn’t finger-pointing. It was a joint team.”

“That’s our style,” Hackenson says. “That’s the way we try to manage projects in the organization.”