IBM CIO Mark Hennessy  took on his current role in July, after 25 years of holding sales, marketing, and general management positions at Big Blue. In his "first pure-technology job," Hennessy is responsible for the technology needs of 372,000 employees worldwide, along with eight million square feet of data centers and thousands of servers and applications. Hennessy sat down with Network World's Jon Brodkin at IBM's Manhattan offices this week to discuss how IBM is using virtual worlds and Web 2.0, the company’s progress with virtualization and consolidation of data centers, and Big Blue's obsession with the word "innovation."

What are the two or three biggest technology projects you're working on?

We have a number of projects around enterprise applications we're working on, trying to integrate across geographies and across business units. The virtualization of some of our systems to reduce our power consumption and costs is another big project we've embarked on. And [we're working on] innovation tools and technologies to drive up the productivity of our teams.

IBM's done a lot of data center consolidation over the last decade. What's going on right now, and what are your goals for the next year, three years?

In August we announced we were going to take 3,900 servers down to 30 [mainframes]. And we're in the middle of that right now. We've modeled what we think the outcome is going to be, the savings in terms of administrative requirements, in terms of software, in terms of floor space, and in terms of power and cooling requirements reductions. We're working with the business units to identify the right applications and the right environments moving forward. We've gone through quite a few of the migrations already. We're working very closely with clients on it.

How long will the project last?

A couple years.

IBM has done a lot internally with Web 2.0 and collaboration technologies, with blogs, wikis, a virtual world, and massive collaboration exercises such as last year's InnovationJam,  an online brainstorming session that involved 150,000 people. How well do you think you're doing with Web 2.0 so far?

I'm excited that we have such a large early-adopter community in IBM, that we have so many people interested in utilizing those tools, sharing whether the tools are effective or not, or how to make them more effective. That's terrific.