Tech Refreshes Can Reduce Data Center Costs But Does IT Really Care?

Data Center


By Mark Skiff, Director, Data Center Solutions, NetApp IT


A recent ZDNet article featured research by energy company consortium The Green Grid that found nearly half of companies have no energy efficiency objectives for their data centers. An astonishing 43 percent of the respondents admitted they had no energy efficiency objectives in place for the design and operation of their data centers. This is in contrast to the 88 percent that said their data centers are an important part of their corporate social responsibility strategy.


According to the article, the U.S. Natural Resources Defense Council (NRDC) predicts that data center electricity consumption will increase to roughly 140 billion kilowatt-hours annually by 2020—the equivalent annual output of 50 power plants—at a cost of $13 billion annually to American businesses.


Everyone agrees that data centers are expensive to build and operate. Most agree on the need for sustainability initiatives that reduce power and cooling requirements and improve energy efficiency. But the enterprise data center industry seems to be a long way from considering facility-related savings as more than “soft” benefits unless the data center capacity has already been 100 percent consumed. If spare data center capacity exists, the recouped space is simply added to data center inventory for future growth. The decision to do a tech refresh fades to the background.


The Solution: A Tech Refresh

Technology refreshes present a very real opportunity to reduce the data center footprint and improve energy efficiency. Take the example of replacing a large array of spinning disks with new flash technology, such as NetApp All Flash FAS. This refresh could reduce the data center footprint by 50 percent or more, along with reductions in the overall energy consumption, associated cooling and flash energy per workload. When applied to rack spaces that cost $150,000 to $250,000 each to construct, and up to $20,000 a year each to operate, the numbers are big!


So why don’t more organizations undertake a tech refresh and improve their energy efficiency?


It comes down to budgets. The facility and IT organizations are often not in lock step when it comes to future planning. IT owns the capital equipment budget. The facility group usually owns the budget for space, power, and cooling expenses. Space, cooling, and power costs get lost due to departmental boundaries. As a result, IT views these as “soft” savings, not hard numbers on which to build an ROI case. Even in cases where these costs are allocated back to the IT budget, they are embedded in the current fiscal year operational expense run rate, and aren’t likely to be wrapped into the refresh business case. 


Without hard numbers to fall back on, or the ability to allocate these costs in its budgets, IT often bases its decisions about technology refreshes primarily on capital costs under its direct control. In most cases, the decision to undertake a tech refresh will be made to address functional needs regardless of facility cost factors.


There are exceptions to this such as when IT has full control over space, power, and cooling expenses. The most obvious example is a standalone data center, in leased data center spaces, or in highly mission-critical data centers where IT has complete control over all aspects of the data center operation. IT owns the facility budget because it controls the facility, and capturing energy and space savings is easy. Another exception is when the IT and facility groups are separate, but share highly integrated business processes—a rare occurrence.


Major challenges exist when the data center is embedded within a building or is in one building within a larger campus. In these cases, it is difficult for facility services to isolate data center energy and space costs because there is too much overlap in the services being provided. In that case, a tech refresh will usually only occur when the data center reaches its limits in terms of space, power, or cooling capacity, or the equipment hits end of life in the asset lifecycle managed by IT. The refresh then emerges as a primary business driver to help the organization avoid or delay adding data center space.


The ideal situation is when IT manages the facility function that supports the data center. All facility-related cost savings can be quantified and reported as hard savings. IT decisions about tech refreshes can be made taking into account all the costs and savings over time in the areas of space, cooling, and power.


Like all enterprise IT shops, NetApp IT faces the same challenge with its data centers. We have standalone facilities where we control our soft costs. Where we have embedded data centers, we have a close working relationship with our Workplace Resources (facilities) team to take into consideration facility-related costs as part of all investment decisions, even if they are not officially part of the budget. But, in the latter case, it’s still difficult to assess how much cost savings should impact our decisions.


Hard Costs vs. Potential Savings

The data center industry is a long way from looking at facility expenses as hard costs unless the data center has reached its capacity. As long as space capacity exists, reducing facility operating costs are a low priority in the decision to refresh technology by most enterprise IT departments. In most cases, the decision to undertake a tech refresh to improve energy efficiency and reduce costs will still be made to address functional needs only. And that’s a shame.


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