In fact, the biggest boom in data-center construction is going on right
now. Many people may think this is a
one-time catch-up effort, but I don’t
believe that’s true. Unless the fundamentals change, every major company
will need to build a new data center
every several years.
Facility costs are currently running
at 8 percent of IT’s budget. The IT
budget is growing at the rate of about
6 percent per year, and the facility’s
expenses are growing at 16 percent
a year. So there’s a fundamental
incompatibility because the growth
in facilities expenses will crowd out
other IT initiatives.
That also changes the way you
have to budget for IT. Investing more in capital expenditures
means less money is available for
People think that a $2,500 server is
so cheap you don’t need to worry about
it. But over three years, the cost of
electricity—$750 in a good location—
nearly equals the cost of the server, and
that’s without the CapEx for building
the data center or the cost of running
it. The idea that servers are cheap so
we don’t need to be very careful about
managing them does not reflect economic reality.
Building good financial models to determine the true total cost of ownership
has to be a priority. These costs must be
built into application justification decisions, but today they typically aren’t.
A classic example is a $22 million
investment in blade servers made by
an IT organization without consulting
the facilities group. Later, the facilities group said, “We’ve got to spend
$50 million to add power and cooling
using technologies like virtualization,
for example. One of our members in
Europe virtualized its 3,150 servers,
ending up with 150 servers. They’re
saving $2.1 million worth of electricity
a year and have recovered $22 million
worth of facility capacity.
Haven’t you suggested that virtu-
alization is a one-time saving?
Brill: Yes. And when we’re justifying
new servers, we need to look at what the
total cost is. That’s the long-term issue.
Why not have some kind of system
of governance in a company to
control these things?
Brill: The energy consumption of a
data center is 20 to 40 times that of
an office building. In a data center,
the biggest potential for improvement
is the efficiency of the IT hardware.
“People think that a $2,500 server is so cheap you don’t need to worry
about it. But over three years, the cost of electricity nearly equals the
cost of the server.”
—Kenneth Brill, Founder and Executive Director, Uptime Institute
Brill: Yes, and I don’t think that’s
good. We don’t want to see all this
money going into facilities, because it
doesn’t add to the productivity of IT.
What does add to the productivity of
IT is application development. If this
course were to continue, there would
have to be other cuts elsewhere in
IT to make room for the growth of
facilities and their cost. This is a
What’s the impact of this data-
center crisis on the role of the CIO?
Brill: The skill set of the CIO is
changing, because the issues I’m
talking about are financial:
accounting, capital expenditures,
budgeting. This is a skill set that
needs to be developed.
capacity, and another $30 million to
operate the plant we’ve built for the
blade servers.” So it turned out to be a
$100 million decision.
These are career-limiting decisions,
and they are not uncommon.
Is something more fundamental
Brill: There’s a convergence of several
things: The number of servers being
purchased is increasing annually, and
consumption per server is going up, as
is the price of kilowatt hours.
Do you think it’s controllable?
Brill: In the short term, we can harvest a lot of gold just by being smart,
Beyond turning off some of it, buying
more efficient IT hardware would help.
Manufacturers offer efficient
hardware, but it costs more. And
most organizations—judging by
their buying patterns—look only
at the original cost. It’s smarter
to spend more money up-front on
more-efficient hardware, so you
don’t have to build a data center. It
also reopens the discussion about
whether and when to use mainframes, midrange computers or
servers, because those platforms
have different energy efficiencies.
A mainframe consumes 18 kilowatts
of power. If it were a server, it would
consume 400 kilowatts of power. A
mainframe is very highly utilized, and