Like many multinational firms, Intel has embarked on a datacentre consolidation programme designed to reduce costs by using less floor space and electricity, while simultaneously adding more computer power.

Intel director of platform capability, Martin Menard, said Intel had 128 datacentres worldwide in 2005, running about 90,000 servers in total. Some 62 percent of those datacentres were 10 or more years old, making them ripe for data storage and power efficiency upgrades.

Intel plans to cut overall datacentre numbers to just eight over the next few years; two in Asia, and three each in the US and Europe. The goal is to cram all of its servers into a few modular, high-performance facilities that will be gradually built up then optimised for thermal management and wattage per square foot.

“We are improving density so we have a consolidated core of servers in one place. We are also looking to manage supply and demand [for compute resources] so that we can improve overall utilisation and make better use of virtualisation,” said Menard.

Intel reckons it saved $115m last year alone, just by taking some facilities off the road map and abandoning the planned construction of others. Moving its processor design workloads onto virtualised Linux clusters also saved it around $77m through improved server utilisation that reached 65 percent in some environments.

“The virtualisation concept is huge. We wipe a server clean, load it up when it is needed and wipe it again when it is not. This will take us to 80 percent [server] utilisation next year [2008], and we expect to achieve around 70 percent this year,” said Menard.

Better utilisation should reduce the number of servers that Intel will need to replace as part of its normal upgrade cycle or add to meet extra performance demand.

“We originally projected that we would need around 100,000 servers by the end of 2007, but now believe that will be 72,000. So we will buy 28,000 less, but still have an active server refresh,” said Menard.

“We had a commitment for 2007 to save around $50m, but I believe it will be closer to $150m based on the progress we are making,” he added.

The projected expenditure on datacentre electricity for 2007 is $31m, down about 20 percent on estimates for the year made in 2005.

Putting all of its computing power into just eight or nine datacentres has raised business continuity concerns, but Intel is confident that necessary improvements to network reliability and performance can be made where needed, particularly in Asia.

“We have to decide where the data is going to be and how to protect it, data replication issues not withstanding, and we have to invest more in networks,” said Menard. “In future we could have a designer in China using a server in Oregon. But convincing people that the servers are not going to be next to them but in multiple, far away countries involves breaking down a number of technical and cultural barriers,” he added.