Server Consolidation -- Beyond the Hardware

Just as the best advice for buying hardware is usually, "choose the software you need and then pick the hardware to run it," applications and data should usually drive server consolidation. By evaluating what impact consolidation will have on the software, you'll get a better picture of costs and be forced to think about the larger philosophical issues, like decentralization vs. centralization, and PC vs. mainframe.

There are some interesting arguments (most of which are old), but in practice most enterprises live in the zone that centralizes some applications and decentralizes others. The important thing is to look at how the servers are being used on a case-by-case basis before making decisions about centralization and rationalization.