Data center consolidation is the process of merging information technology (IT) systems to form a more powerful and efficient system that runs on fewer resources. The process includes data center hardware, such as storage systems and servers. However, it also covers technologies, such as applications and cloud computing. Companies can also include locations during the data center consolidation process.

The concept is similar to downsizing your kitchen by getting rid of small appliances and replacing them with multipurpose equipment. For instance, some multipurpose cookers can air-fry, grill, pressure-cook, and slow-cook, so you don’t need four different appliances. Not only will you save money, but you can also maximize your space.

Other interesting terms…

Read More about “Data Center Consolidation”

The process has been in the works for more than a decade now, both in the public and private sectors. In 2010, the U.S. Federal Aviation Administration (FAA) implemented the Data Center Consolidation Initiative (DCCI) with a budget of US$6.3 million. The effort complied with the Office of Management and Budget (OMB) mandate to federal agencies to come up with data consolidation plans for their data center assets.

Back then, the effort centered on moving data to the cloud. Today, most organizations are still looking for ways to consolidate and optimize their data center assets. Hence, the term “data center consolidation” has become almost synonymous with “data center optimization.”

If you want to learn more about how government agencies are working toward data center consolidation, this hour-long webinar might be helpful:

Benefits of Data Center Consolidation

The process has several advantages, including improved energy efficiency, enhanced risk management, and cost savings. These are explained briefly below.

Cost Savings

Reducing operating costs is one of the main reasons behind data center consolidation. The FAA spent millions of dollars to implement this process with cost savings as their ultimate goal. In fact, a paper by IT analyst ESG revealed that 29% of IT decision-makers are willing to spend money to save on costs in the long run. Data center consolidation is among these initiatives.

Improved Energy Efficiency

One of the goals of data center consolidation is to stop using old and outdated hardware that can consume more power than newer ones. By migrating to new and up-to-standard systems, organizations avoid using excessive energy, turning their infrastructure into energy-efficient data centers.

The same is true for our kitchen downsizing example—using multipurpose cooking equipment allows you to save energy compared to using four different small appliances.

Enhanced Security Risk Management

By consolidating and centralizing data centers, organizations can reduce their digital footprint, making them less vulnerable to cyber attacks. They also stop using outdated systems and platforms, which could pose security risks. 


Like any other technology-related process, data center consolidation has associated risks. Among them are failure and data loss. We explain them briefly here.

Risk of Failure

Consolidating your data center into one infrastructure or provider could also mean that your system would fail when the data center gets shut down. When Amazon Web Services (AWS) experienced an outage in 2020, for instance, the operations of companies, such as Adobe, Autodesk, and The Washington Post were affected.

Risk of Data Loss

During the consolidation process, it’s important to determine critical systems and the interdependencies between them. Failure to do so can result in data loss.

Data center consolidation has become a critical process to most organizations, as they strive to reduce costs and optimize business processes. The concept is quite similar to the minimalism movement where people live with fewer but essential possessions.

It may have associated risks, but it has several benefits that could outweigh these.