Application Consolidation - The Enterprise Quandry

One of the most natural actions for any company is to cut costs during tough economic times. Also the most common actions in large companies is what I call the dreaded "consolidation". Basically this is the activity that attempts to reduce a company's large portfolio of applications to a smaller set. Logically and fiscally this makes sense in terms of elimination. If you can actually reduce your portfolio through true elimination you can really save on costs.

However, this is not as straightforward as it appears. I am going to forego the larger management and operational views of the activity and rather focus on the lower level implementation which tends to be glossed over in these discussions.

Usually when large companies speak of consolidation, it is usually looking at making savings on redundancy. This is especially true of companies that have gone through mergers. For example a company that has merged several times may have in fact have many redundant applications such as ordering, provisioning, HR, etc. At some point consolidation focuses on these applications and attempts to merge them into one.

The issue for large companies happens to be the size and hence complexity of this approach. In my experience this exercise is fairly ponderous for even smaller companies. When you get to organizations with tens of thousands of employees or more, this is not so simple mostly because the amount of data in the applications are vast as is usually the infrastructure and support personnel to keep them afloat. One classic case I have run into is the predicament related to ordering. In many cases, especially in merged organizations, ordering applications tend to address different segments of the customer base. For example in a large telecom there would be one ordering application for broadband, one for wireless and one for land-line. The ideal would be to consolidate all of these into one platform.

Now comes the hard reality. In this scenario, each application services tens of millions of customers, billions of transactions, cover hundreds if not thousands of servers across multiple data centers, hundreds of terabytes of data, and more than likely has hundreds of individuals servicing them. Consolidating these applications into one platform is daunting. Mostly because such a move puts companies into areas that are not necessarily their strength which is expert technical infrastructure management. How do you move all the data? How do you merge the applications such that functions are available to all parties without having to extensively retrain thousands of customer service representatives? If you leverage existing hardware or reduce it, how do you manage such a large distributed application on big iron from big vendors? For example, tackle simply the database level which may be from a major vendor such as Oracle. In some of these cases of consolidation companies push the vendor's ability to deliver a solution potentially merging all the applications could be well over 800TB worth of data. Imagine the sheer magnitude of moving this data en masse which is how most shops know how to tackle a problem of that size.

Usually after hitting the brick wall of reality, many compromises are made to applications that can span years which result in paring systems down enough such that they can actually be shut down and rolled off. However, this works for only the smallest of applications or the least used ones. The larger ones which are still being used actually account for the greatest potential for savings and present the greatest of challenges. So in most companies actions, they tend to leave their consolidations to the smaller or medium sized applications that while achieving savings do not deliver as much as first thought.

Hence many technical groups within these large companies are intrigued by cloud, data management, and large scale infrastructures common to certain internet companies. Unlike some of their smaller cousins, larger companies do not have the luxury of growing into the problem. They are there all ready. The hope is that by looking at more innovative approaches, their own technical professionals will be able to implement solutions that can best address the business need to cut costs while insuring their applications can continue to meet the growth and functional demands.