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data center modernization

What is data center modernization?

Data center modernization includes updating and improving a data center to meet the requirements of the current and the next generation of workloads.

Data center modernization involves upgrading a data center to be a valuable and effective tool for modern workloads. The goal is to help improve efficiency, agility, security and cost optimization, while providing support for new and emerging technologies, such as artificial intelligence (AI) and machine learning (ML). It's a process that includes migrating to software-defined infrastructure concepts, such as infrastructure as code, virtualization, microservices, automation, consumption-based metering and cloud integration.

Hardware is at the foundation of a data center, and it's also at the foundation of any modernization effort. When modernizing a data center, organizations typically choose the most updated hardware possible, including storage devices; networking gear, such as switches and routing equipment; power generation; and cooling. The modernization typically includes updating to top-end servers powered by Intel and AMD CPUs, as well as potentially introducing non-x86 options, such as Arm-based servers. The introduction of enhanced computing capabilities in AI accelerators and advanced GPUs is another foundational element of data center modernization.

Updated large storage hardware arrays, using solid-state drive and non-volatile memory express options that provide rapid access to data faster than traditional spinning disk hard disk drives, are also often part of a modernization effort. More powerful networking capabilities can also be part of modernization efforts, providing increased bandwidth both within a data center -- referred to as east-west traffic -- and incoming and outgoing of a data center, known as north-south traffic.

Energy is a primary cost for data centers, so modernization initiatives focus on improving efficiency by implementing more energy-efficient power and cooling systems to reduce operational costs and environmental impact. Improving the overall space utilization inside a data center is often another critical element of data center modernization with the adoption of high-density computing and hyperconverged infrastructure systems.

When to consider modernizing your data center

As increasing volumes of workloads move to the cloud, some question whether data centers will become obsolete. The simple answer is that some will become obsolete as the economics of the public cloud can often be vastly superior to operating a data center. In many other cases, digital transformation with data center modernization is the key to ensuring that data centers will not become obsolete and remain useful for years to come.

With the speed IT workloads change, organizations need to consider data center modernization regularly.

Modernization should not be a one-time exercise, but rather a regular and incremental set of operations to ensure that capabilities can meet or exceed the requirements of workload demands as they grow.

When servers and infrastructure age beyond three to five years old, outdated technologies and processes can potentially expose operations to increased threats, such as crashes and attacks, and inefficiency. As hardware ages, performance typically declines and is unable to meet new demands. Organizations cannot afford to lag with aging data center infrastructure if they want to stay competitive.

Common indicators that it is time to consider data center modernization include the following:

  • Inefficient and high-cost operations. If the data center is consuming a disproportionate amount of energy for cooling and power or if the maintenance costs are consistently high, it might be time to consider modernization to be more energy-efficient and cost-effective.
  • Scalability challenges. When the current infrastructure cannot keep up with the growth of the organization, modernization can help.
  • Downtime and reliability issues. If the data center is experiencing frequent downtime or reliability issues, that is a clear indicator it's time to modernize.
  • Regulatory compliance concerns. As regulatory requirements continue to change, there may be a need to modernize to comply with new standards.
  • Demand for new technologies. The need to support new applications, such as AI and ML, may require more advanced infrastructure that an older data center cannot provide.
  • Competitive pressures. If competitors are delivering services faster or more efficiently due to modernized IT infrastructure, an organization may need to modernize to remain competitive.

Benefits of data center modernization

Data center modernization activities can offer several clear benefits to help improve overall operations and capabilities.

Benefits of data center modernization include the following:

  • Optimize efficiency. Common attributes of a modernization effort are hardware, software and cooling updates that introduce more efficient systems and hardware that uses less power. The optimized resource use can also lead to a reduced environmental impact.
  • Improve scalability. Over time, workload demands grow in terms of size and performance requirements. Modernization efforts can build in strategies, software and hardware that can support scaling efforts.
  • Reduce expenses. Modernized hardware and software can help reduce expenses through lower energy and maintenance costs.
  • Increase performance. A leading benefit of data center modernization is better performance for workloads that delivers faster processing and better user experiences.
  • Enhance reliability. Older hardware systems can potentially be less reliable over time. Modernization can provide more fault-tolerant designs that lead to higher uptime and improved reliability. Modernization can also help strengthen business continuity with disaster recovery by improving backup and failover systems.
  • Improve security and compliance. A data center modernization effort can include new security features to align with privacy regulation and compliance requirements.
  • Support workloads. With new hardware and software, data centers can accommodate more types of workloads, including advanced technologies, such as AI.

Key steps to create a modern data center

Modernization is a multistep process that includes multiple key considerations prior to a data center upgrade.

Here are some key steps to create a modern data center.

Understand and define needs

Organizations need to understand the users of the data center and what workloads need to run. Understanding and defining the specific current and future needs are critical.


Evaluate and assess the current infrastructure for performance, capacity, efficiency and security. Goals should identify what needs to be improved or replaced to align with the organization's needs.

Review design

The actual design and layout of the data center are important for optimal workflow, airflow and energy consumption, as well as providing the necessary space for potential expansion. In the design review phase, any changes to the data center design should be considered.

Consolidate and virtualize

While there might still be a need to run some workloads on bare metal, many applications benefit from virtualization and containerization, which lead to workload consolidation. Consider how and where virtualization can be used to maximize hardware utilization to reduce physical footprint and costs.

Automate and orchestrate

A key part of data center modernization is enabling more automation, which is where orchestration is needed. Integrating automation tools to streamline repetitive tasks and orchestration platforms to manage workflows across the data center is a critical step to creating a modern data center.

Update networking

Upgrade networking infrastructure to ensure the best connectivity for the requirements of the data center, and implement software-defined networking to support greater scale and control.

Bolster security

Alongside the networking updates, reevaluate the security controls, hardware, software and procedures in place across the data center that help to protect against threats. Make sure that there is a security operation center in place or provided as a managed service to help identify and remediate potential risks.


With an understanding of workloads that will run and what hardware, software and process updates might be needed, a key step is to develop a detailed plan that aligns with business goals. This plan should include budget, timeline and compliance requirements for rolling out the modernization plan. It's likely not possible to do everything at once, so priorities should also be outlined.


Before going live with any and every component of the modernization effort, thoroughly test the infrastructure for performance, security and reliability. Ensure everything works as intended and meets design specifications.

Document and train

Document the architecture, configurations and procedures for future reference and compliance purposes. Be sure to educate and train IT staff on the new technologies and processes to ensure they can effectively manage and maintain the modernized data center.

Monitor and optimize

As individual parts of the modernization come online, continuous monitoring of data center performance is needed. Modernization is not a point-in-time effort, so be sure to regularly review technologies and processes to keep the data center up to date with the latest advancements and business requirements.

This was last updated in January 2024

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