Posts Tagged ROI

Don’s Corner: “Right-Sizing Versus Over-Sizing: Efficiency In The Data Center”

Posted by on February 29, 2012  |  No Comments

Don Melchert, Critical Facility Specialist


Forecasting and measuring the total cost of ownership (TCO) for Data Center Physical Infrastructure (DCPI) is essential for return-on-investment (ROI) analysis. Oversizing is the main contributor to excess TCO. Oversizing creates inefficiencies in the data center including excess capital cost, operating cost, and specifically energy cost. The average data center operator can achieve the highest return investment in relation to DCPI through rightsizing.  Right-sizing the DCPI system to the load is the key to optimizing TCO and has the most impact on DCPI electrical consumption.  Right-sizing can potentially eliminate up to 50% of the electrical bill in real-world scenarios.  For example, potential electricity cost savings for a typical 1 MW data center  has been shown to be $2,000,000 to $4,000,000 over a typical 10-year life of the facility.  Data center efficiency is key to controlling your energy costs  and should be a topic of significant importance to all data center operators.

The single largest avoidable cost associated with typical data center and network room infrastructure is oversizing.  To learn more about how you can prevent this unnecessary cost, “Right-Sizing Versus Over-Sizing: Efficiency In The Data Center” is available for your organization via our unique “Breakfast and Learn” Educational Series For Data Center Professionals.  This series provides the education that will lay the critical foundation for your organization to run an efficient data center. Please feel free to contact me for further information at or 918-760-8236. Additional resources pertaining to this topic are presented below for your reference.

Avoiding Costs from Oversizing Data Center and Network Room Infrastructure (White Paper #37) Overview:

Executive Summary:

The physical and power infrastructure of data centers and network rooms is typically oversized by more than 100%. Statistics related to oversizing are presented. The costs associated with oversizing are quantified. The fundamental reasons why oversizing occurs are discussed. An architecture and method for avoiding oversizing is described.


  • TCO cost drivers and opportunities to control TCO.
  • Information and statistics related to over-sizing.
  • Practical advantages of right-sizing.
  • Energy consumption reduction in DCPI equipment.
  • Examine key reasons why the industry is moving toward modular, scalable DCPI solutions.


Data centers and network rooms are routinely oversized to three times their required capacity. Oversizing drives excessive capital and maintenance expenses, which are a substantial fraction of the overall lifecycle cost. Most of this excess cost can be recovered by implementing a method and architecture that can adapt to changing requirements in a cost- effective manner while at the same time providing high availability.


Implementing Energy Efficient Data Centers (White Paper #114) Overview:

Executive Summary:

Electricity usage costs have become an increasing fraction of the total cost of ownership (TCO) for data centers. It is possible to dramatically reduce the electrical consumption of typical data centers through appropriate design of the data center physical infra- structure and through the design of the IT architecture. This paper explains how to quantify the electricity savings and provides examples of methods that can greatly reduce electrical power consumption.


The cost of electricity for data centers is a substantial operating cost that can and should be managed. A data center designed for reduced power consumption also saves other costs such as capital and operating costs associated with power and cooling systems, as well as saving space.

Electrical consumption of existing data centers can be reduced through various low cost methods but primarily via migration to more energy efficient computing platforms. For new data centers, there are additional options both in the IT architecture and in the DCPI architec- ture that can gain much greater savings.

The electrical power consumption is typically shared evenly between the IT loads and DCPI devices. Any rational approach to reduction in electrical usage must treat the combined IT / DCPI design as a system in order to maximize the benefit.

Some equipment providers offer complete standardized data center designs specifically engineered for efficiency, and energy efficiency audit services are available for users desiring to reduce power consumption in existing data centers.

The cost savings opportunities have been shown to be very large yet the investment required to achieve them is small or even zero in some cases, when compared with legacy approaches to data center design.


Determining Total Cost of Ownership for Data Center and Network Room Infrastructure (White Paper #6) Overview:

Executive Summary:

An improved method for measuring total cost of ownership (TCO) of data center and network room physical infrastructure and relating these costs to the overall Information Technology infrastructure is described, with examples. The cost drivers of TCO are quantified. The largest cost driver is shown to be unnecessary unabsorbed costs resulting from the oversizing of the infrastructure.


Expressing TCO for data center and network room physical infrastructure on a per-rack basis normalizes the measurement of TCO, providing a metric that can be used to compare data centers/ network rooms and to compare different approaches to design.

The use of a TCO calculation tool and method was described. This tool permits the evaluation of cost control strategies, and can estimate TCO for specific installations.

The per rack lifetime TCO of a high availability data center is approximately $120K. The oversizing of infrastructure is a major contributor to this cost, and on average 30% cost savings can be obtained by implementing practical design techniques using modular scalable data center infrastructure.


CIOs Reduce Data Center Costs Through Power and Cooling Efficiency | Guest Opinions |

Posted by on February 2, 2012  |  No Comments

Author:  Jeff Klaus, Intel Data Center Manager

Energy costs are the fastest-rising cost element in the data center. Based on current trends, the EPA estimates that energy consumed by data centers will continue to grow by 12 percent per year. Power and thermal energy consumption balanced with energy savings is one of the major responsibilities of facility and IT managers. Intel Data Center Manager group has observed how the data center is now a source for CIOs and their technical teams to add to the bottom line through increased power and cooling efficiency.


CIOs Reduce Data Center Costs Through Power and Cooling Efficiency | Guest Opinions |

Don’s Corner: “Understanding The Average Return On Investment (ROI) After Completion Of A Data Center Assessment”

Posted by on December 7, 2010  |  No Comments

Don Melchert, Critical Facility Specialist

Understanding The Average ROI After Completion Of A CFEP

The Cost of Downtime is Exponential

Every critical facility experiences growing pains throughout its lifespan. Unexpected equipment failures, such as a UPS or HVAC system, can halt productivity resulting in costs that can be hidden, yet are exponential in nature. For instance, a failed UPS must be returned to normal operation as soon as possible in order to continue critical operations. In our competitive market, downtime is not an option. Without expensive, quick response service contracts, we are at the mercy of our vendors when it comes to emergency after-hours unscheduled maintenance. The service technicians will be on site at an increased hourly rate, of course, but what about the premium placed on the parts and materials needed to complete the repair?

Exploring the scenario further, those hidden, exponential costs come to light with a fury. The combination of an after hours (emergency) service bill plus parts is already expensive enough, but, in order to calculate the total cost, one must consider the additional cost of manpower from the staff that will be on-site and the additional resources used to support the corrective maintenance action. Let’s assume that the failure scenario stemmed from a generator failure during a power outage, and, during this outage, some of the UPS batteries failed. An all too common scenario and one that, unfortunately, many an I.T. or Facilities Manager has found themselves at the mercy of. To start from the top, lighting will be needed in the repair location, but what about the staff member’s office? …and the hallways leading to it? …and possibly the break room? …and eventually the restroom? What additional costs might be incurred if an accident or injury occurs during the maintenance action? Don’t forget, even after all of the repairs have been performed and the system returned to normal, additional support resources will be used to make the invoice payments to the service provider.

From the example above, it’s easy to see that calculating the total cost of a service interruption includes a lot more than just the temporary service interruption and what’s on the parts and labor invoice. If a critical facility can find and eliminate just one of the factors that can cause a critical systems failure, then conversely, the savings can be exponential as well!

Our Difference is Value

The majority of critical facility inspections and evaluations are performed while focusing on only the inner workings of the data center. The goal, for most companies performing the evaluations, is to show how much energy making any changes or corrections has made based in what was found during the inspection. Their entire approach is to locate key points in the data center where energy is being wasted or resources are being utilized inefficiently. However, the ability of a critical facility to remain online 100% of the time is the result of all of its Network Critical Physical Infrastructure components working together efficiently, not just what occurs solely in the data center.

A Critical Facility Energy Profile (CFEP) from UNS is different in that the evaluation is holistic, right from the start. Without interrupting the operational capabilities of the facility and its staff, a CFEP inspection actually begins from the moment the Critical Facility Specialist arrives at the site. If permitted, the entire facility and its NCPI components, from infrastructure to security, are inspected and each finding is taken into consideration when establishing an efficiency benchmark. Upon completion, the CFEP Report Card showcases any items where efficiency can be improved and suggests corrective strategies that will immediately reduce costs for a business across multiple cost centers. The total cost savings is dynamic, as savings in one area increase savings in another and another. In the end, it’s the bottom line that’s improved, not just one section of the business.

Seeing is Believing

WARNING: Any dollar value quoted for the ROI after performance of a CFEP will be false (low), as there is not sufficient data to accurately determine future savings gained from making a particular increase in efficiency. However, in this rare occasion, having an inaccurate prediction is definitely an error in your favor! Although the CFEP is holistic in nature, if we dissect just one section, such as a decrease in energy consumption gained by improving air conditioning efficiency, then we can show the savings in dollars for just that section.

As an example, we’ll use a critical facility in Indiana, with a total load of 8000kW consumed per hour at the current average energy cost in Indiana of $.0713 per kWh. If the facility is operating at the nation’s average of 50% efficiency and a PUE of 2.0, then their current annual energy costs is approximately $ 4,996,704 USD.

During a CFEP, it was determined that the orientation of the data racks in interfering with the airflow from the CRAC units, effectively forcing them to run on high at all times. The facility took action, implemented the recommendations from the CFEP and was able to completely eliminate one of their CRAC units and decrease the fan speeds of the remaining systems. If this facility can become just 1% more efficient in their total energy consumption, the cost savings is significant. Their total load has now dropped to 7600kW with a PUE of 1.90. Assuming the cost of energy remains constant, their annual energy cost has now dropped to $4, 746, 869 USD. From making just one change, to only one aspect of their NCPI, resulting in a meager 1% increase in efficiency, they now have a savings of $249,835 USD in the first year, and greater savings in years to come.

Again, although this example is impressive, it’s still very conservative and technically, it’s inaccurately low. The additional cost of savings associated with the elimination of one CRAC unit, including preventative maintenance contracts, consumable parts and all of the reduced man hours necessary to keep it operating at 100% would need to be added to the savings above in order to accurately show the full ROI for just one portion of a CFEP!

Don Melchert
Critical Facilities Specialist