Ask the CIO: As part of our coverage, Alcatel-Lucent CIO Elizabeth Hackenson will answer written reader questions about transforming the data center. Selected questions and answers will post online. Got a question for Hackenson? Please email it to sgelston@cxo.com.

"The goal is to get to six primary data centers and zero server rooms," Hackenson says. The project, which started in June, 2006, is slated for completion in late 2009.

Alcatel-Lucent CIO Elizabeth Hackenson

Hackenson's team has just finished the first year of work; they're down to 19 data centers and 88 server rooms so far, she says.

Beyond IT cost considerations, what business goals shaped the decision to consolidate so much, now? "We had two very important business goals," Hackenson says. "First, reliability. We need an environment that can support our mission-critical applications worldwide." Second, she says, the environment had to become more robust and flexible to business demands. "There's tremendous growth in video and messaging across the enterprise," she says.

That appetite for video is one reason that the company's new tier-four data center, opening this week in Marcoussis, France, near Paris, and hosting the company's most mission-critical applications, makes heavy use of multiprotocol label switching technology out to the company's backbone, which allows for efficient handling of video streams, as well as caching and compression techniques on the networks. (This unique new center, which uses Alcatel-Lucent networking equipment and HP servers, will also be the primary network operating center to support Alcatel-Lucent's application businesses and its services business group.)

The consolidation, for which Alcatel-Lucent hired HP Services as a consulting partner on everything from initial assessments to disaster planning, is expected to make a large cost difference as well: Alcatel predicts that the data center consolidation project will reduce the total cost of data center operations by 25 percent before the end of 2008. The company declines to share a figure for its total data center spending or IT budget.

The massive project comes at a tough business time for telecom equipment maker Alcatel—and its peers. In early February, the company reported a fourth-quarter net loss of about $3.8 billion, including a $3.65 billion write-down on its CDMA technology, a mobile standard that has fallen out of favor with wireless giants such as Verizon. Alcatel's market value, roughly $13.5 billion, is now less than before the merger with Lucent.