Counting The Cost Of IT MIScues

With IT demands soaring – i.e. by 2020, more than seven billion people and businesses, and close to 35 billion devices, will be connected to the Internet – and budgets shrinking (down 5.5% to a mere $3.5 trillion in 2015), it’s hard to understand how CIOs can be screwing up this badly, but a number of surveys indicate that’s the case. The latest study, “Hidden Challenges of Data Center Lab Management,” from Vantage Data Centers, reports that 94% of companies are missing out on opportunities to potentially reduce their rent and power costs.

Another recent report from IDC, found that enterprise ‘data centers, run in-house by large businesses, are throwing away money on uncontrolled cooling and power costs’. In two-thirds of US enterprise data centers, less than half the electric power consumed actually reaches the IT racks. The survey of 404 users with at least 100 servers and 1000 square feet (roughly 100 sq m) of data center space, found that on average they are spending 24% of their budget on power and cooling – an average of $300,000 for each company in the survey, and roughly the same amount as the amount they spend on IT equipment.

Another IDC report from earlier this year predicted that in the next two years, 25% of all large and mid-sized businesses will confront significant power/cooling facilities mismatches with new IT systems, limiting them to using less than 75% of their physical space. The research company also predicted that by 2017 ‘over 60% of companies will stop managing most of their IT infrastructure, relying on advanced automation and qualified service partners to boost efficiency and directly tie spend to business value.’

However, before then, another survey (July) predicts that nearly 90% of data center operators surveyed in North America and Europe had plans to increase data center facility spending. Close to a quarter of them plan to start that spending over the next 90 days, although while enterprises are planning to spend more on data center infrastructure, there will be fewer actual data centers due to consolidation.

As a datacenter service provider, Vantage champions outsourced over on-premise solutions, but it’s hard to refute the data:

-40% of the 94% of respondents who managed their lab datacenter in-house indicated they do not have the time or resources to do so;

-nearly two-thirds reported that their organizations’ R&D labs’ IT infrastructure runs in datacenter space that is shared for both critical and non-critical R&D purposes, which ‘can be a wasteful practice and can create multiple unnecessary redundancies’;

-62 % host their R&D lab IT hardware in commercial offices, meaning they pay much higher retail rent and power costs than a typical commercial datacenter environment would offer;

- consumption may account for approximately 50% of the cost to run IT infrastructure, but only 50% of IT professionals reported knowing the rate their company pays, and only one-third of respondents monitor or manage power usage.

According to Vantage, by leveraging off-site datacenter lab locations, companies can save up to 40% on electricity costs.

The survey was essentially customer-driven, said Vantage COO Chris Yetman. A number of customers approached them about potential benefits of outsourcing their labs. “We weren’t purposely out there hunting for labs,” he told IT Trends & Analysis.

Steve Lim, VP and head of marketing, said that over the last year or so they had multiple customers coming to talk to Vantage about their lab environments and how they were not managing them very well. They had lot of concerns, i.e. using commercial power, paying 30-40% more, and running in an inefficient manner. We thought there had to be others out there, hence the survey.

“It’s been fun for us as those same labs have datacenter needs as well,” said Yetman. “The neat part is it’s all happening in one place.”

The potential savings, just in power, can be huge, he said. Vantage is working with a client that is paying a much higher energy price and working in a less-efficient facility. Outsourcing can save this customer $800,000 to $1 million a year, and when you look at a typically 10-year payback, the savings can be substantial.

Author: Steve Wexler

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