1. Pursuing Operational Excellence Better Data Center Management Through the Use of Metrics

2. Objective
Use financial modeling of your data center costs to optimize their utilization.

3. Data Centers are Expensive to Build
A 1MW 7,500 ft2 “white space” commercial data center will cost about $16.7M to build.
The building to house that data center will be about 23K ft2. Total cost > $700/ft2.
Compare that to $100 - $150 / ft2 for a custom home in middle America.

4. Data Centers Are Expensive to Operate
Monthly electric bills for a 1MW data center average about $82.6k ($991K/yr.)
(At 85% occupancy, with a 1.5 PUE)
Network charges are very high as well.
The data center infrastructure is one of the fastest growing cost of deploying IT.
At 85% occupancy and a PUE of 1.5 the power draw would be 1000 X 0.85 X 1.5 = 1,275kW
1,275 X 24hr/d X 30d/mo = 918,000 kWhr
At $0.09/kW; 918,000 X 0.09 = $82.6K/mo

5. Data Center Cost Accounting
Do you know how much your data center is costing you?

6. Data Center OpEx
The best financial modeling strategy for data center OpEx is to boil down all operational costs into a monthly recurring cost (MRC) expressed in $/kW for every data center or colocation facility you operate in.
This is your “cost of compute”.

7. Components of Data Center OpEx
Depreciation
Maintenance of infrastructure components (Including preventative maintenance)
Utilities (power, water, …)
Fuel (e.g. diesel for generator tests)
Security
Salaries (for data center infrastructure personnel, dedicated security personnel)

8. Know your “cost of compute”
Question you are answering:
How much is it costing me to deploy a rack full of IT gear at a given location?
Boil everything down to MRC in $/kW

9. Cost of Compute
Know this number for every data center you own and for every colocation vendor you use.
Easier to compute for dedicated data centers.
More difficult but possible to compute for shared use buildings.

10. OpEx Financial Accounting Issues
MRC in $/kW is not constant over time.
There are seasonal variations for cooling loads.
Design targeted PUEs are attained at full loads
For a given location, MRC in $/kW will decrease as IT HW occupancy increases.

11. Typical Cost of Compute
For a large Enterprise (economies of scale apply) in a concurrently maintainable data center
$235 - $300 / kW MRC
For small / medium Enterprise (no economies of scale) in a non-concurrently maintainable DC
$300 - $400 /kW MRC; much higher for a concurrently maintainable DC (which a small enterprise is unlikely to have)

12. Ways to Manage Cost of Compute in Your Data Center
Capacity Planning
Energy Management
Cooling Management
Heat Management

13. Capacity Planning
One of best ways to control Costs of Compute is to control capacity.
Benefits
Improved quality of forecast over time
Reduced CapEx if you can delay build out of new data center
Better decision support

14. Financial Control Over Space & Power
Measure and publish utilization over time.
Know your metrics: (avg. kW/rack, avg. ft2/rack)
Set-up a space & power governance program
Must pre-authorize HW intake to data center
Must follow-through with decommissioning equipment.

15. Financial Control Over Energy Management
You are probably spending too much!
You probably don’t know your PUE (Power Utilization Efficiency)
You are probably running too cold!

16. Energy Management Strategies
Measure, track, and publish your PUE
Use ASHRAE’s new recommended operating temperatures.
See Green Grid paper on the ROI of cooling system improvements

17. Why PUE is Important 1 rack = 5kw
5kw rack x 8,760 hrs = 43,800kwh/ year
43,800 kwh x $0.07/ = $3,066 per rack annual
5,000 sqft data center with 140 racks
140 racks x $3,066 = $429,240 annual IT energy costs
At PUE of 2 = $858,000 Total DC energy
At PUE of 1.5 = $643,500 Total DC energy
Difference: $214,500

18. Energy Management ROI
Generally speaking, for every 1.8°F that you raise the temperature in your data center, you save 2-4% of your total energy bill.

19. Seemingly Small Changes Can be Big
91 watts vs 70 watts processors = 21 watts / processor
21 watts x 2 processors = 42 watts savings
42 watts x 8760hrs / 1000 = 368 kwh
368kwh x $0.07/kwh = $25.75 per server
140 racks / 5000sqft DC 13 servers / rack
140 racks x 13 servers / rack = 1680 servers
1680 x $25.75 x 2 $86,520

20. Cooling Management
Understanding how much cooling your data center needs.
Convert
Formula
Example
Tons of air to BTU
12,000 BTUs = 1 ton of air
To find BTUs
Watts x 3.41 = BTU
2500w x 3.41 = 8525 (BTU)
1 kW
= tons
1 ton
= 3.517kW
Tons to kW
Tons x 3.52 = kW
20 tons x 3.52 = 70kW
kW to tons
kW x .28 = tons
70kW x .28 = 19.6 tons

21. Cooling – effectiveness
How does your cooling capacity stack up against my IT load?
Load on the UPS in kW x .28 = tons of cooling.
Compare this against tons of cooling in your data center.

22. Heat Management
DC looking to add another CRAC unit. Consider heat containment first. Lets look at some simple napkin math, pursuant to a containment solution. CRAC Containment CapEx $80k $45k OpEx (5 yrs.) $50k $ 0k Total $130k $45k

23. Other Green Grid Recommendations
Install OEM variable speed drives (VSDs) in all computer room air handlers (CRAHs). Upgrade older CRAH units with newer more efficient models.
Improve rack airflow management by adding baffles and blanking panels, which improve isolation of hot and cold air aisles.
Reposition the CRAH temperature/humidity sensors from the inlets of the CRAHs to the front of the IT equipment racks.
Adjust the temperature set-points of the CRAH sensors and the chiller units

24. What About the Cost of Outsourcing
Is you organization benefiting from selectively outsourcing some of your infrastructure?

25. There May be Financial Advantages to Outsourcing
Consider colocation
You can probably not build and operate anything smaller than a 2MW data center for less than what you would pay for colocation. (For the same level of redundancy & service levels)
Consider other outsourcing options

26. The Outsourcing Spectrum
Application
Middleware
Operating System
IT Physical Infrastructure
Virtual Infrastructure
Physical Hardware
Data Center Environment
BYODC
Colocation
Managed Hosting
SaaS
PaaS
IaaS

27. Cost of Colocation Location $/kW MRC Boston $300 - 400 Chicago$
Dallas $
NY/NJ $
No VA $
No CA $
So CA $

28. Funding IT in Your Data Center
IT Funding Models
The IT funding model is IT's primary mechanism for gaining approval for spending on
behalf of the business, accounting for that spending, and communicating costs back
to business stakeholders.
IT funding models vary substantially across organizations, but they all seek to strike
three critical balances:
Balancing cost with service levels
Balancing maintenance with new investments
Balancing effective IT coordination with responsiveness to diverse business partner needs

29. Why Provide Financial Transparency
Transparency improves IT accountability and focuses the mission on what is important.
Transparency supports maintaining proper balance.
Transparency helps the business determine better buy versus build decisions, including brokering external services.

30. Deliver Cost Transparency via Showbacks or Chargebacks ?

31. How to Get Started
Recommendations you can implement now to improve or initiate your showback or chargeback program.
Create a service catalog.
Identify and align business services to technology capabilities currently being delivered to business units.
Gather service costing information.
Start with gathering data and information from the finance department about the cost and expense of each    technology-based product and service.
Relate services and costs.
Create a financial cost model of how technology services and costs are related and allocated to business units.
Make it plain.
Implement greater IT service costing transparency that plainly details the relationships to budgets and/or P&L statements.

32. David Sipes, Global Data Center Manager, SOCAL AFCOM Vice President of Operations