November 13, 2007 -- The Uptime Institute recently issued a white paper entitled "A Simple Model for Determining True Total Cost of Ownership for Data Centers," along with an associated "True TCO Calculator" cost model, designed to offer enterprises a framework for modeling the life-cycle costs of building and operating a data center. The white paper and cost model were issued in preparation for the Institute's recent event, billed as the "Design Charrette: Data Center Energy Efficiency by Design", which was held October 28 – 30 in Santa Fe, NM.
Authored by Jonathan Koomey, PhD, a senior fellow of the Institute, as well as a Lawrence Berkeley National Laboratory project scientist and Stanford University consulting professor, the paper and calculator jointly capture key data center cost components, including site infrastructure capital costs, computer equipment costs, energy bills, and other operating expenses, to characterize the estimated costs of building and operating a new data center.
The cost calculator characterizes a high-density, high-performance computing facility housing financial services applications. The Institute says the model's design offers high-level financial, IT and data center facilities analysts and decision-makers the opportunity, for example, to evaluate tradeoffs between more energy-efficient computing equipment and infrastructure capital costs, and the energy costs to operate over the anticipated life of the facility.
"This True TCO calculator represents a first developmental step in creating a series of calculators that will enable data center planners to understand the implications of IT and computer site design options for total costs, reliability and business requirements," says Koomey. "This early model shows that investment costs for more energy-efficient servers in a new data center can be more than offset by the avoided capital and operating investments in infrastructure systems for power supply and cooling. Without such a calculator, that result might not have been so readily apparent."
The Institute's developmental path for the calculator includes developing models for the four different Tier classifications of data centers, based on the Institute's industry-standard Site Infrastructure Tier Classification System.
The topic of data center True TCO was explored in the management track at the Design Charrette event, along with other proposed "green" metrics for measuring and managing whole-system data center energy efficiency. Over 250 data center executives and senior technical and engineering professionals, IT industry and data center design professionals attended the stakeholder meeting. According to the Institute, the goal of the event (the first in a planned annual series) was "to transform the energy efficiency, productivity, and sustainability of the data center, and to restore both the economic viability of Moore's Law and the environmental sustainability of large-scale server computing." Further, says the Institute, the event calls on IT and data center industry stakeholders "to collaboratively develop a whole-systems design approach to address critical energy-consumption and carbon-reduction issues."
According to the Institute, data center facilities costs, including the costs of energy, have grown rapidly in recent years, from the traditional one to three percent of IT's total budget, to around five to 15 percent. This unprecedented cost escalation, says Ken Brill, founder and executive director of the Institute, is significant enough "to threaten the economic productivity of enterprise IT, in what we are calling the economic meltdown of Moore's Law." Brill contends that traditional IT hardware life-cycle total cost of ownership (TCO) calculations and cost justifications have either ignored or significantly underestimated the "True TCO" because they fail to correctly capture and allocate both the capital and operating expenses of the data center in their planning analysis.
To help senior corporate finance, IT and real estate executives address this phenomenon, the Institute was commissioned by IBM's Deep Computing and Data Center Capacity on Demand business units to develop both the True TCO Calculator and the white paper. Currently, says Brill, one result of such aforementioned underestimating is that CIOs and data center operators frequently discover too late in the planning and often even after the purchase of IT hardware (primarily computer, network and storage servers) that they do not have the computer room infrastructure capacity to manage the new loads.
Notes Brill, "In one recent case, a major global financial institution purchased $15 million worth of blade servers, only to discover that the new or upgraded facilities necessary to handle the power and cooling requirements required an additional $50 million in unplanned and unbudgeted investment. And that's just one of a number of such examples."