A couple years ago Kronos suffered from a serious case of server sprawl. The workforce management software vendor in Chelmsford, Mass. had built up a data center with 330 servers that were being utilized at a rate of only 10%. In July of 2006, Kronos acquired a vendor called Unicru, a move that threatened to add another 80 servers.

“We weren’t getting any ROI from our hardware,” says Michael Moran, a senior IT manager. “We had significant challenges with power, cooling and real estate costs. The question was do we want to build a new data center or find a technology that can cut costs.”

Kronos looked at a physical consolidation through blade servers, but rejected that approach because using blade servers without virtualization wouldn’t significantly improve utilization rates or lessen power requirements. (Compare blade server products.) Kronos also considered application consolidation, but that would have raised the risk of application conflicts, resource contention, and database version incompatibility.

So Kronos settled on server virtualization as its primary consolidation method, Moran said Thursday while giving a presentation at VMware’s Virtualization Forum in Boston. With a backbone of Dell PowerEdge 6950 and PowerEdge 6850 servers and EMC SAN storage, Kronos has undergone an ambitious virtualization project that reduced power costs by 20% and potentially avoided $1.2 million in costs for new servers.

Using an automated physical-to-virtual conversion tool from PlateSpin, Kronos was able to convert 125 physical machines to virtual systems within four months without adding new staff, and had done so with 300 physical servers by August 2007. While those 300 boxes were moved out of the data center, Kronos did bring in 50 new servers to host VMs. With the ability to pack 16 virtual machines onto a single physical host, Kronos consolidated 25 racks into nine. “That is great because we are able to really get that return on investment,” Moran says.

Because Kronos is no longer tied down to the one-application-per-server model, the company was able to add 200 workloads without purchasing new equipment, a cost avoidance that Moran estimates at $1.2 million.

On VMware servers, Kronos is running several hundred SharePoint sites, file and print servers, domain controllers, Red Hat with Oracle databases, Citrix servers with published applications, Microsoft SQL databases and various Kronos-built applications.