Case study

Data center consolidation helps Godrej save 25% on cost

Mitchelle R Jansen, Reporter

By consolidating its data centers and network infrastructure in four phases, Godrej Group was able to reap 25% cost-saving benefits when it began merger of its four companies under the ‘Godrej one project’. To begin with, internal decision-making was the core challenge they faced. With four companies and different IT teams involved, reaching a consensus concerning standardization of the infrastructure was imperative, yet quite a difficult task.

Godrej Group, one of the largest engineering and consumer-products companies, caters to about 500 million customers every day, with interests in the real estate, fast moving consumer goods (FMCG), industrial engineering, appliances, furniture, security and agri-care. Each of these sectors has a dedicated IT team, thus making an initiative like standardization through data center and network infrastructure consolidation seem like a daunting task.

Essentially, the ‘Godrej one project’ gave birth to the need of technological standardization across the companies in the group. In order to achieve this goal, the company decided to opt for data center and network infrastructure consolidation.

“We have achieved an improved quality of infrastructure support tools by going from a multi-vendor to a single vendor model,” says Dinesh Chandra Gupta, Deputy General Manager of IT at Godrej Consumer Products Ltd (GCPL). According to him, data center and network consolidation was a strategic part of their new business technology initiative.

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The data center and network consolidation was carried out in four phases:

  • Phase one – physical data center consolidation in October 2010
  • Phase two – network consolidation in November 2010
  • Phase three – primary MPLS connectivity in February 2011
  • Phase four – secondary MPLS connectivity in August 2011

Data center consolidation and centralization

Earlier, all the four Godrej group companies: Godrej Infotech Ltd, Godrej Industries Ltd (GIL), Godrej Properties, Godrej Consumer Products Limited (GCPL) and Godrej Agrovet hosted its data from Tata Communication Data Center and Reliance IDC.

The company wanted to centralize the hosting of all its data on a single platform from a single vendor into a secure and technology-oriented environment. After evaluating existing two vendors, they opted for Reliance IDC as it was a tier-3 certified data center. According to Gupta, better pricing was among the key reasons they chose Reliance IDC over Tata Communications for its consolidation initiative.

Servers utilized by the various group companies were earlier placed on different floors. With a view to ensure standardization and uniformity, the company negotiated with vendors and placed the 18-odd server racks at a central location into a caged environment.

Consolidation of network infrastructure

Uniformity in pricing and licensing models of various vendors drove the company to invest in the consolidation of its data center and network infrastructure as well. The primary network connections utilized earlier included: Reliance Communications, Tata Communications, Bharti Airtel, Bharat Sanchar Nigam Ltd (BSNL) - Customer Service Network and Sify - Corporate Networking Services.

The company evaluated all of its network connections and finally zeroed in on Tata communications as the primary MPLS connectivity for all the companies in its group. “We received a 30% saving on MPLS connectivity through this initiative,” beams Gupta.

Significantly, Godrej also consolidated the firewall and VPN systems running in the different companies. In this regard, FortiGate firewall was selected as it runs in High-Availability mode.

In view of ensuring redundancy, the company decided to opt for a standardized secondary MPLS network connectivity in all its group companies. The company signed this deal with Sify Corporate Networking Services in August 2011, with 50% backup for all the locations, except for three regional offices and the head office in Vikhroli, which have a 100% identical connection to that of the primary connection.

Moreover, network consolidation helped Godrej move from a CAPEX model to an OPEX model. “We received a good measure of cost benefits as we negotiated with the vendors for better bandwidth at a reduced cost; we outsourced all the network components from the vendors itself eliminating CAPEX,” explains Gupta

The company left no stone unturned with regards to standardization. At the infrastructure level, the company standardized the management. Among the different companies, IT management for GIL and GCPL was outsourced to HP. This led to a smooth functioning of the IT and better management.

Benefits derived from data center consolidation:

  • Overall cost savings for the group
  • Better IT management
  • Reduced CAPEX as they switched to the OPEX model
  • Higher availability and scalability levels
  • Reduced footprint of routers, firewalls and switches
  • Spare network elements were re-used, thus ensuring utilization of existing technology
  • Standardization of the overall infrastructure throughout the group companies
  • Achieved redundancy, along with no single point of failure

Furthermore, taking this initiative to the next level, Godrej plans to perform server virtualization in its data center. They wish to achieve higher capacity through this initiative and are currently evaluating VMware solutions. The first project on this front is the virtualization of servers in its Argentina office as part of its SAP initiative.