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servers are poorly utilized. And the
power consumption per transaction on
a mainframe is less than it would be on
a server—even a virtualized server.
So that means re-examining how you
develop applications and systems.
Brill: This gets back to basic strategy
issues about what platforms to run applications on. Historically, facility costs were
not considered in these decisions. Because
of the change in energy consumption per
dollar of spend, all the old rules need to
be re-examined. People talk about the
power crisis or the heat-density crisis, but
fundamentally, it’s an economic crisis.
Brill: The Environmental
Protection Agency, the
European Union and the
Chinese equivalent of our
EPA are all talking to one
another. Historically, IT’s
energy consumption was
below their radar screen.
Now, since data-center consumption as a percentage
of total consumption has
been rising at a 100 percent
rate every five years and is
projected to continue, it has
reached their radar screen.
Why do you think people haven’t
realized that?
Brill: I don’t know. All the big 10
financial services companies have
half-billion to billion-dollar data-center
construction programs. These costs are
going to hit their profit-and-loss statements. When they do, it will change
the economics of IT.
Government has been
trying to educate and establish measurements. Energy
Star will come out later this
year with an Energy Star
rating for servers, which
will allow buyers to understand the
energy efficiency of various servers—
and there are significant differences.
Would it be in the best interests of
the vendors to manufacture more
energy-efficient I T?
People think that this half-billion
dollar to billion-dollar construction
program is a one-time catch-up event,
so they’re budgeting for it that way.
I’m saying that they will be repeating
it again within four to five years—and
again four to five years after that. If they
adopted some of the things we’re talking
about, that would extend the length of
time between construction cycles—
maybe stretch it out to eight years.
One of our member companies,
which buys 100,000 workstations a
year, looked at the energy efficiency of
the power supplies included in those
workstations. They bought from a
vendor that didn’t even advertise that
its power supply was efficient. And the
payback was in less than nine months.
Since the life of the asset was 36
months, it was a very good investment.
Brill: Absolutely. They’ve done this,
but those products are languishing in
their inventory because users don’t
realize it’s in their best interests to buy
more energy-efficient products.
How about the impact of rising
fuel costs?
Should government be more pro-
active in establishing rules govern-
ing power usage in data centers?
How many organizations have
shifted the budgeting of data-
center costs to IT?
Brill: Morgan Stanley made the shift
recently. It’s still rare, but it’s beginning
to happen.
Does the government have a role
in this, and are they doing what
they should be doing?
Brill: My fear is that they’re going to
get forced into it and that they will not
be very subtle. The dynamics of our
economy are such that whatever is true
today will be obsolete within three to
five years, but regulations tend to get
cast in concrete and are very difficult
to change. I don’t see the need for
regulation because the economics are
so compelling: It’s in people’s own best
interests to be more energy efficient.
Brill: Most electricity is produced
on long-term contracts that won’t be
affected by the rise in fuel prices for
many years. Even when those fuel
prices catch up, they won’t have much
effect because fuel is a small percentage of the cost of producing electricity.
Most of the cost of producing electricity is in the CapEx investment: the
power plant, along with the transmission and distribution lines. Even so, it’s
prudent business to eliminate waste.
We need to throttle back the demand
for IT by having the true cost of ownership reflected in the cost of applications.
It’s in our own best interests to know
what’s paying off and what’s not. n
