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June 30, 2023 | Matt Pacheco

A Complete Guide to an Effective Data Center Consolidation

As businesses grow and evolve, change is inevitable, and this extends to changes in the allocation and use of data centers. Whether you’re looking to consolidate data centers due to a merger, or out of a desire to reduce complexity and cost, there are several things you need to consider for the consolidation to be effective.

What is Data Center Consolidation?

Much like it sounds, data center consolidation is a strategy designed to reduce your data center footprint. It can streamline your workload in a way that results in big advantages. When you work to consolidate data, you can enjoy cost savings, improved security, energy efficiencies, and increased productivity. Additionally, with the right strategy, you can still have reliable, fast access to your centralized resources no matter their location.

Reliable access to centralized resources using data center consolidation

Importance of Data Center Consolidation

Is your business growing? Or have you been running workloads out of multiple data centers or a combination of on- and off-premises facilities? You may benefit from a data center consolidation project.

When done correctly, data center consolidation efforts can…

  • Boost operations
  • Make the use of IT assets more efficient
  • Reduce redundancies
  • Make the experience better for the end-user

Benefits of Data Center Consolidation

There are numerous benefits that accompany data center consolidation efforts.

Physical Location

If one of your current data centers is in an area prone to extreme weather and disaster, consolidating to a data center in a less vulnerable location or one that is designed to handle such events can improve security and reliability for your infrastructure and end users. The data center may also include physical elements that make it less vulnerable to threats, such as cooling and fire suppression systems.

Shifting from CapEx to OpEx

In a CapEx model, organizations pay for infrastructure costs upfront, such as hardware, and all of the costs needed to build an on-premises data center. With OpEx, on the other hand, businesses only pay for the services and equipment they use, typically on a subscription-basis, which is provided by a third-party. Using a third-party data center is considered OpEx since you pay for the space/resources you use and the time in which you use it.

Many data centers are under utilizing their capacity, but still paying for it, under the CapEx model. In an OpEx model, organizations are able to scale what is needed rather than invest up-front in infrastructure/hardware that is not currently needed.

For organizations with variable needs, or ones that may grow in the future, shifting the approach from CapEx to OpEx can save money and reduce the likelihood of having to make major investments that may take years to pay off.

Energy Efficiency

Consolidating your workflows and shutting down unnecessary servers or redundant systems leads to efficiencies in data processing and reduced energy consumption. According to a recent study by the University at Buffalo, “Data center managers can reduce energy consumption 10-30% by consolidating jobs to as few servers as possible when workloads are high, and evenly distributing the workload across all servers when loads are low.”

Additionally, an Energy Star study found that decomissioning a single server can help businesses save around $500 in energy costs and $1,500 in hardware maintenance costs on an annual basis.

Physical Security

If your consolidation plan includes a move to a third-party data center provider, you can enjoy the benefits of their physical security systems without the burden of implementing your own, including security cameras, an access control system, environmental controls, and a secure perimeter.

It is also important to ensure your data center provider meets your compliance requirements, such as HIPAA, SOC 2, HITRUST, etc.

Complexity Reduction

When you spread out your data, your risk increases. Here’s an example. Say you’re a business that’s spent the last decade on acquisitions. You now find yourself with data in 10 locations with different security standards. In the event of a security breach, you may find yourself in a tangled mess.

Data center consolidation means you can also monitor your data from a central point. This is true even if your workloads are hosted in multiple centers run by the same provider or if you’re computing on the edge. Third-party data centers have in-house data security experts who offer services that will best protect your data.

Increased Productivity

Imagine the effort it takes to pull one lever in three different locations. Now imagine the effort it takes to pull it in one place, even if you have to do it three times. The more you streamline your processes, the more you save time and money while stregnthening uptime and availability.

With a third-party data center, you also have options for managed services. These services will help you augment your team with onsite data center experts. That benefit can free up significant time so your team can focus on strategic revenue-generating projects.

Cost Reduction

With proper planning, data center consolidation projects can reduce your costs considerably. To attract more customers and effectively compete, data center providers have reduced their rates for leasing. Moving to a provider from on-premises shifts costs away from onsite management.

When you consolidate your workflows into a single colocation facility, you can also reduce redundancies in processing and staff resources for more savings.

Access to Managed Services

Most third-party data center providers offer additional managed services for customers. These can include remote hands, routine maintenance, a workspace for business continuity purposes, network services, and more. 

Data Center Consolidation Risks

Data center consolidation can also come with downsides. Understanding what they are, and preparing to counter them, is the best way to keep the move a beneficial one.


Especially when consolidation is in process, business operations can get interrupted, leading to downtime. The best way to keep this from happening is by having a team of data center facilitiy experts provide a comprehensive consolidation and migration strategy with a roadmap in place incorporating client maintenance windows.

Loss of Data

Data loss in the consolidation process can come from human error, security breaches, and technical failures from hardware or software. Moving to a smaller data footprint can reduce complexity, but it can also mean that mistakes or vulnerabilities have a greater impact on your infrastructure.

Compromised Data Security

Likewise, having a single point of failure post-consolidation can make security risks more impactful. Maintaining a failover point at a second data center, even when looking to simplify, is an important safeguard for businesses looking to stay operational when experiencing a disaster or breach.

Data Center Migration Strategy

Consolidation will include at least one data center migration, where you will be moving data, applications, and infrastructure from one data center to another. The process is often more complicated if you are moving from an onsite data center to a third-party provider. Developing a strategy that includes goals for productivity, redundancy, network connectivity, scalability, efficiency, security, compliance, and performance can help you get the most out of the migration.

Data Center Consolidation Best Practices

5 best practices of data center consolidation


  • Hardware Assets: Take stock of the hardware being used in your current environment. If you own servers, networking equipment, and storage devices, that’s something you’ll need to think about before consolidating and moving to a data center provider. Set a time in advance of the move to re-boot all equipment to ensure they will turn on properly.  Will you take the equipment with you to a colocation data center, or will you decommission and sell it? This may depend on the age of your equipment, the future plans of your business, or your current budget.
  • Facilities and Energy Usage: To determine that you’ll actually be saving money by consolidating, you’ll want to evaluate the current energy usage and the cost of maintaining facilities and compare it to what you expect your expenses to be in a new data center. If you’ll continue to manage your own data center, you need to factor in the costs of cooling, heating, security, and everything else needed to run the facility. If you migrate to a data center provider, your main cost will be based on the space and power you’re using in the building.
  • Geographic Location and Real Estate: Different geographic locations are susceptible to different environmental conditions. There also may be differences in price due to market demand in certain cities. The buildings themselves may also have desirable features, such as environmental controls and security measures. Also consider network latency, which can also vary by location.
  • Software Assets: If you’re consolidating due to a merger, you also want to think about the state of your software. What needs to move into the new data center? Is there anything that can be pared down prior to migration? Do you need to make changes to licensing agreements or find integrations for additional critical software?


  • Data Center Consolidation Disaster Recovery Planning: Because you have fewer points of failure, you’ll want to keep that in mind when doing disaster recovery planning. You should understand the impact a disaster may have on your systems in a consolidated environment long before anything happens. One of the services your data center provider may offer to help with this is disaster recovery as a service (DRaaS).


Once you have an idea of the current environment, where you’ll be consolidating your systems, backup plans, costs, and assets, you should work on a design of what the new infrastructure will look like. Data center infrastructure management (DCIM) software can be used to create a virtual representation of your consolidated environment.


The consolidation plan gets enacted on the day you start moving everything. It should outline any equipment migration, potential phases, team access needs and responsibilities, and clear instructions to go with the design. The more you plan ahead of time, the less downtime you’ll experience.

Working with a Managed Service Provider During Data Center Consolidation

Data center consolidation is a major change to your IT infrastructure. And it’s a project that requires expertise and planning to mitigate risks and downtime. An IT consulting service should help you benefit from new technologies and adapt your IT infrastructure to meet new business requirements. Professional help with consolidation strategies means you’ll get support for:

  1. Physical and cloud migrations
  2. Security consulting
  3. Disaster recovery
  4. Business continuity planning
  5. Cloud readiness assessments

TierPoint’s team of experts can guide you toward the right data center approach as part of your overall IT modernization strategy. Together, we can review your entire IT infrastructure to find the right data center optimizations that will help you achieve your modernization goals. Read our guide on IT Modernization and Optimization to find resources to help you learn more and achieve those goals.


What is an Example of Data Center Consolidation?

One common reason businesses may be looking to perform data center consolidation is when they merge with another organization and need to combine data into one system. Another is when a company is looking to move their onsite data center to the cloud.

What Should You Consider During Data Center Migration?

During data center migration, a business should be thinking about what they want to achieve through migration, what the current data center looks like, where they’re moving, and how they’re going to get there. All of these steps should be outlined in a data migration strategy.

How and When to Choose Data Center Consolidation?

If the cost of maintaining multiple data centers outweighs their performance and efficiency, it may be time to opt for data center consolidation. It may also be something organizations consider if they’re looking to reduce complexity and improve security processes.

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