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Understanding the True Cost of Operating a Server
OTHER PARTS OF THIS ARTICLEPt. 1: This PagePt. 2: Virtualization and Other Tips to Slash Data Center Energy UsePt. 3: New Metric for Data Center Efficiency Proposed
In many data centers, there is a good deal of friction between facility management and IT, but in some corporations the relationship between the two groups is defined by collaboration rather than conflict. One reason that FM and IT get along in those corporations is that they have the same objectives. Today, the rising costs associated with data center energy consumption are giving IT and FM a common target. Increasingly, the two groups will likely find it’s in their own individual interests to work together.
Energy has long been a primary concern for facility executives, regardless of what types of buildings they manage. In the last few years, however, energy-related issues have become critical for facility executives responsible for data center infrastructures. It’s not only the increasing amount being spent on power. It’s also the investment needed for an infrastructure that can handle the new demands for power and cooling.
By contrast, IT executives haven’t had to think about energy. Utility bills typically don’t go to them and capital expense investments for power and cooling are often not in their budget. As a result, they often bought servers based on other criteria, blissfully ignorant of matters like cooling load and power capacity.
That’s changing. The cost of building and operating data centers is fast becoming a significant corporate issue. So is the carbon footprint of data centers, at least in some organizations. The heat is on both FM and IT — and the best way to turn it down is collaboration.
A good step is to sit down with your IT counterpart and talk about the economics of data centers. Here’s a true story to start the conversation. One IT department spent $22 million on blade servers. The IT decision makers knew the processing power they’d be getting. What they didn’t know was the full costs that would come along with the blade servers. Before the new servers could be plugged in, the corporation had to spend $54 million on facility infrastructure upgrades. Facility costs of running the blade servers for three years cost another $30 million. So the $22 million spent by IT on blade servers was just the tip of a $106 million iceberg when enterprise costs were considered.
Ripple Effect of Server Energy Use
Few IT executives are aware of the cost or ramifications of the energy required to power servers. It wasn’t long ago that the cost of energy was an insignificant part of the total cost of ownership for computing. Back then, it might have taken 30 to 50 years for the cumulative cost of electricity to equal the price of the computer. Now, in places where electricity rates are high, that time has shrunk to just two years, and the average is four years. As a result, The Uptime Institute estimates that operating costs associated with data center facilities may now account for 8 percent of the IT budget in some corporations, and they are probably climbing 20 percent a year.
A bigger surprise to many IT executives is that energy inefficiency drives up capital costs. Some large corporations will need a new data center every three to five years just to keep up with an ever-increasing number of servers. These data centers will cost more than $100 million each, a five-fold increase from just a few years ago. A few large corporations now have multi-billion dollar data center construction budgets.
Facility infrastructure and operating costs rarely come up when IT departments are deciding which server to buy. As a result, IT executives may think they’re getting a deal when they buy low-end servers. But as the table on page 68 shows, there are significant facility costs associated with housing, powering and cooling a $2,500 server in a data center. The facility costs include power, facility and security staffing, maintenance and repair, property taxes and other expenses related to the physical infrastructure. Several points are worth noting:
- Total facility costs will equal the purchase price of an inexpensive server in two years or less. Even in this example, which assumes low prices ($0.08/kWh) for electricity, the cost of electricity used for power and cooling will exceed the price of the server within six years.
- Over the four year life of a server, the combined facility capital and operational expense will be up to four times greater than the cost of the server itself.
- The table assumes that the server uses 300 watts of power. Of course, many servers consume far more power. A rack of blade servers, for example, may devour 10 to 12 kilowatts. And the facility capital cost associated with that rack may well be $1 million.
- Few organizations have pulled all this information together; therefore they have no sense of the facility costs associated with a low-end server. Forensic accounting will be required to pull all of the costs together.
The table assumes that the facility utilization rate is only 55 percent because data centers are often oversized when they are built. It takes at least two years to get a data center from proposal to completion, so companies often build data centers with far more capacity than they initially use.
Understanding the True Cost of Operating a Server