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Moore's Law Economic Meltdown |
Why every big corporation needs an Energy Czar.
Moore's Law has been responsible for ever-cheaper processing and has driven a boom in global productivity over the last 40 years. The result has been an almost universal perception that servers are cheap. But deep inside the data center something else is festering, and it's changing the economics of IT.
Not too long ago, it took 20 to 30 years for the cumulative cost of electricity for a server to equal the purchase cost of the server. Today, in high-rate areas, the cost of electricity to support a low-end server will exceed the cost of the hardware in less than 24 months. CapEx is now driven by server power consumption instead of square feet occupied. These changes are like termites eating away at the economic foundation of IT.
The growing problem of heat density in server racks is well known, but this is just a surface manifestation of a more fundamental problem. Unless IT gets a larger portion of corporate revenue, ongoing data center CapEx investment will crowd out application development and other new IT initiatives, which in the past have driven product growth.
As a point of reference, a new data center for the largest corporations will be required every three to five years just to keep up with an ever-increasing power consumption. Price tags will top $100 million compared with $20 million just a few years ago. Not coincidentally, we are witnessing the biggest data center construction boom in history.
The Uptime Institute has been researching these issues for the last three years and based on our most recent international symposium, we have identified a long list of issues that need to be resolved to make data centers economically sustainable again. Here are two of our key recommendations:
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Transfer data center facilities' CapEx and OpEx (or operational expenditures) from the corporate real estate group to the CIO.
- Appoint an internal IT "Energy Czar" with authority, accountability and a timeline to increase energy efficiency and reduce energy consumption.
As long as a critical piece of the data center facility's cost is under the direction of the corporate real estate group, there will be friction and lost opportunities for understanding the true costs of IT decisions. This friction could be tolerated when facilities' OpEx was a stable 1% to 3% of IT's budget. For IT-intensive businesses, data center facilities are now 8% and growing 20% per year. Friction results in a slow rate of innovation and improvement, which can no longer be tolerated if the enterprise profit and loss bottom line is not to be affected.
I don't like the term "Energy Czar," but it catches the attention of CEOs and boards of directors. Any CIO's first priority should be to focus on the business value of IT. That said, there are simple ways to cut energy costs in virtually every computer room. One place to start is by turning off comatose severs. Typically, up to 30% can just be turned off because they are obsolete. Saving electricity is an important OpEx saving, but deferring or eliminating the CapEx associated with new data center construction is much, much bigger.
This is a tough job. The Energy Czar has to overcome organizational resistance to doing smart things. It requires a real bulldog coupled with the personal backing of the CIO and CFO because inside most organizations it still isn't "cool" to be efficient. But with oil prices rising almost daily, it could well be an easier sell in the future.
Kenneth G. Brill is executive director of the Uptime Institute in Santa Fe, N.M.
View the article at Forbes.com 
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