IT Energy Costs: The Quiet Budget Killer

Most IT organizations estimate their standard infrastructure expenses based on servers, telecommunications and desktops. Few consider the cost of the electricity required to power and cool the equipment. With today's rising energy prices, companies can no longer ignore the cost of power. In some markets, the electricity bill for a server facility can run four to six times the cost of renting the building space.

The ratio of power costs to hardware costs can be staggering. According to Business Week, when Paul Otellini joined Google 's board, he learned that electricity for its "white box" servers cost Google more than the servers themselves. (White box is a computer reseller term for a device made by a lesser-known manufacturer on behalf of a major manufacturer, which then imprints its logo on the outside.) Even with a typical branded server, the cost of electricity can be 20% of the total expense of the rack over its life. This can rise to 25% or 30% in configurations with poor power utilization.

You can reduce your energy costs by taking a proactive approach to energy management:

Operate your uninterruptible power supply, batteries and power-distribution systems in their most effective load range. Historically, load capacity could be expanded only in massive blocks. Increases were both expensive and disruptive, so power equipment was frequently sized for the server room's maximum eventual load. As a result, a UPS might operate at 20% capacity for years. Unfortunately, at low percentages of rated capacity, a UPS is very inefficient; 1 kilowatt input may yield only a half-kilowatt output. Newer UPS, battery and power-distribution systems are modular and can be expanded with little or no disruption to the server center as power requirements grow.

Design server layouts for cooling. While blade servers are generally more energy-efficient than traditional servers, more computing power per square foot translates into more heat (and cabling) per square foot, requiring additional cooling. Poor rack placement and cable mazes can hinder airflow. Facilitate cooling by fixing your layout flaws.

Enforce power-saving mode for unused equipment. Many desktops, monitors and printers are never turned off. Hibernation can save considerable power. This is not rocket science, but it does save money.

Select energy-efficient software. As energy costs rise, software designers need to consider energy efficiency. Tests of the preliminary version of Windows Vista reportedly indicate that it consumes 25% more power than Windows XP. Games are energy hogs too. On a recent trip, my daughter played a game on my laptop and was disappointed when the battery died after only 45 minutes; the game kept the CD drive spinning almost continuously.

Consider turning your legacy data center into a backup facility. Older data centers may not have adequate kilowatts per square foot for newer blade-server technology. Rather than performing extensive and costly renovations, some companies are simply moving into new server centers and relegating older facilities to occasional use as backup centers.

Participate actively in server center design. In many companies, the facilities department designs, constructs and manages all physical space.In some cases, it even pays the electric bills. But as power costs increase, some companies (especially those with charge-out systems) are charging IT for their power consumption. If your organization is designing a new server center, be sure to put someone on the design team who understands the special energy needs of today's server environment.

Investigate DC power. Most power companies sell AC power because it's much easier to transport over long distances, but virtually all PCs and servers run on DC. So once the power gets to the server center, most server centers convert AC power to DC (while altering voltage multiple times) before it reaches the server. Some power is lost during each conversion. Hewlett-Packard, Sun, Intel and others are cooperatively building a DC-powered server center to test its feasibility. Monitor the issue of DC power in the service center through the Electric Power Research Institute.

Keep current on emerging technologies. Savvy manufacturers are starting to address energy efficiency concerns. Both Intel and Advanced Micro Devices are touting the energy efficiency of their new products based on dual- and quad-processing chips. American Power Conversion, Socomec Industriel and others now manufacture UPS hardware that adds capacity incrementally. This allows you to match your power capacity (and cost) to your current needs -- rather than to 10-year projections. Don't pay for more power than you actually use.

Reducing your energy use is a relatively easy way to reduce your infrastructure costs. Buying more power than you need wastes money that could be better spent elsewhere. Make sure you get the maximum leverage from the dollars you spend on energy.

Bart Perkins is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps organizations invest well in IT. He was previously CIO at Tricon Global Restaurants Inc. and Dole Food Co. Contact him at

Copyright © 2006 IDG Communications, Inc.

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