IT energy costs: The quiet budget killer

Big savings can be made with careful management, says Bart Perkins

Most IT organisations calculate their standard infrastructure expenses based on servers, telecommunications gear and desktops. Few consider the cost of the electricity required to power and cool the equipment. With today's rising energy prices, companies can no longer ignore the cost of power. In some markets, the electricity bill for a server facility can run four to six times the cost of renting the building space.

The ratio of power costs to hardware costs can be staggering. According to BusinessWeek , when Intel chief executive Paul Otellini joined Google 's board, he learned that electricity for its "white box" servers cost Google more than the servers themselves. (White box is a computer reseller term for a device made by a lesser-known manufacturer on behalf of a major manufacturer, which then imprints its logo on the outside). Even with a typical branded server, the cost of electricity can be 2% of the total expense of the rack over its life. This can rise to 25-30% in configurations with poor power utilisation.

It is possible to reduce energy costs by taking a proactive approach to energy management, including the following steps:

1. Operate your UPS, batteries and power-distribution systems in their most effective load range Historically, load capacity could be expanded only in massive blocks. Increases were both expensive and disruptive, so power equipment was frequently sized for the server room's maximum eventual load. As a result, a UPS might operate at 20% capacity for years. Unfortunately, at low percentages of rated capacity, a UPS is very inefficient; 1 kilowatt input may yield only a half-kilowatt output. Newer UPS, battery and power-distribution systems are modular and can be expanded with little or no disruption to the server centre as power requirements grow.

2. Design server layouts for cooling While blade servers are generally more energy-efficient than traditional servers, more computing power per square metre translates into more heat (and cabling) per square metre, requiring additional cooling. Poor rack placement and cable mazes can hinder airflow. Facilitate cooling by fixing your layout flaws.

3. Enforce power-saving mode for unused equipment Many desktops, monitors and printers are never turned off. Hibernation can save considerable power. This is not rocket science, but it does save money.

4. Select energy-efficient software As energy costs rise, software designers need to consider energy efficiency. Tests of the preliminary version of Windows Vista reportedly indicate that it consumes 25% more power than Windows XP. Games are energy hogs too. On a recent trip, my daughter played a game on my laptop and was disappointed when the battery died after only 45 minutes — the game kept the CD drive spinning almost continuously.

5. Participate actively in server center design In many companies, the facilities department designs, constructs and manages all physical space. In some cases, it even pays the power bills. But as power costs increase, some companies (especially those with charge-out systems) are charging IT for their power consumption. If your organisation is designing a new server centre, be sure to put someone on the design team who understands the special energy needs of today's server environment.

6. Keep current on emerging technologies Savvy manufacturers are starting to address energy efficiency concerns. Both Intel and AMD are touting the energy efficiency of their new products based on dual- and quad-processing chips. APC, Socomec Industriel and others now manufacture UPS hardware that adds capacity incrementally. This allows power capacity (and cost) to be matched to current needs — rather than to 10-year projections. Don't pay for more power than you actually use.

Bart Perkins is managing partner atLeverage Partners and is a former CIO. He can be contacted at

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