Data centres need to become more efficient to remain economical
Up to 40% efficiency gains possible
London, 22 May 2009 – A new cross-industry analysis of European data centres has shown that if providers carry on with current practices, their already slim profits will turn into losses within two to three years, with the economic crisis only adding to the pressure. By pulling the right levers, however, costs can be cut by as much as 40%, according to a new report from Booz & Company.
Louise Fletcher, Head of the Global IT Practice at Booz & Company, commented: “The demand for data services is on the rise but the data centre is under tremendous pressure to cut costs, reduce energy usage, and develop new delivery models. Those pressures—and the threat of rising factor costs such as energy, labour or real estate—will force every data centre operator to reassess how it does business if it wishes to remain competitive.”
The report, Keeping the Data Centre Competitive, examines the six areas in which companies can work to improve their data centre operations:
  • Improve asset utilisation through virtualisation. As servers typically run below 10% of CPU capacity—and it is not uncommon for more than 50% of data centre floor space to be under-utilised—creating a virtualised server environment using virtualisation technology can bring 15-20% savings.
  • Consolidate the data centre footprint. A careful analysis of the total worldwide footprint of data centre facilities and how operations are organised is required.  Data centres reach scale efficiency at about 10,000 square metres. This ensures operating expenses are minimised and added costs aren’t incurred because of increased complexity of the data centre.
  • Manage consumption to reduce usage and energy costs. Optimised management of energy consumption can cut power bills by up to 25% and reduce carbon emissions at the same time - for example, by using high-efficiency power distribution systems and reducing cooling costs through using district cooling or variable speed fans.
  • Restructure data centre management and operating model. Restructuring the data centre’s operating model can increase efficiency. For example, planning, administration and service management should be integrated across all production platforms to allow for better capacity planning and lower coordination costs.
  • Create a global data services sourcing strategy. Global sourcing models such as remote infrastructure management or outsourcing and process automation can reduce data centre workforce costs by up to 15%.
  • Modularise service offerings and rationalise payment schemes. A demand driven model helps give customers what they want: efficient and flexible computing capacity. By adopting an efficient new way to deploy capacity and shut it down when not needed, the provider can remain competitive.
Stefan Stroh, Head of the Global Transportation Technology Practice at Booz & Company commented: “The data centre is rapidly moving toward a new model in which what matters is delivering as much computing capacity as customers need, when they need it.”