Flawed Energy Efficiency Incentives Fail Industry


Cutting costs and carbon is critical, but Romonet’s Zahl Limbuwala says the way data centre services are ‘charged back’ is the key

We all agree that cutting energy costs and cutting carbon are both vital in the data centre – but the way that data centre user costs are measured and portioned out needs to radically change if we want to fully realise the benefits of the latest energy efficient technologies.

For me, the usual way that costs are divided out is badly flawed – and this is something that occurs in businesses across the world. It fails the user who might want to reap the returns of buying the latest energy efficient IT and it fails the industry as a whole because it discourages people from using IT in a more innovative, responsible and energy efficient manner. In turn, this means that data centres (and the IT equipment within them) are often far more wasteful and carbon intensive than they should otherwise be – and that’s no good for any of us.

So what’s going wrong?

Imagine you’re a manager running an enterprise data centre for a large bank. Within your data centre, you are servicing multiple internal clients – from the bank trading floor to customer services. Each client ‘buys’ a service from you and you have decide how much to charge them in return – and this is where the problems start.

In the past, this ‘charge-back’ as it’s called has been relatively straight forward. Finance will typically use physical space as a proxy for how much data centre capacity a client uses. If they have them at a granular enough level, they may then look at their electricity meters to see how much metered energy they’ve used and then they will multiply this figure by a single averaged multiplier (normally Power Usage Effectiveness) to account for the shared overheads – which can be very large. It’s a model similar to the one used to figure out costs in a serviced office. In a shared office space, a tenant pays for how many square feet they use. Then they pay a variable fee for the utilities consumed and a portion of the fixed costs of the common areas you share with other tenants – the phone lines, kitchen area, cleaning services and the like.

Up until fairly recently, that’s worked fine because everyone has been buying roughly the same kind of IT equipment and using it in the same kinds of way. But over the past few years, things have significantly changed in the data centre because the technology’s advanced.

Modern virtualisation technology can vastly increase the utilisation and therefore energy efficiency of data centre servers and today, a single piece of IT kit can perform the job of multiple machines.  This means that physical space is no longer an adequate indication of how much of the shared fixed costs are being consumed by any one particular client within a data centre – costs can be vastly different depending on the technology you use and how you are using it. This also means that how many – or few – boxes a particular data centre client buys is no real indication of how energy efficient – or otherwise – their behaviour is.

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