Reducing Data Center TCO Is A Critical Business Objective For Your IT Clients

By Richard Jenkins, Vice President, Worldwide Marketing and Business Development, RF Code

For the majority of global enterprises, the data center is now the strategic hub of the business. This has led many organizations to re-evaluate facility efficiency, accountability, and cost management. When tasked with reducing capital and operating expenditures, most focus on optimizing cooling and power infrastructure as it is an operational area simple to understand and a management strategy with an immediate impact on a data center’s operating expenditure (OpEx).

While environmental efficiency is certainly important, there are many other cost-saving strategies that can create equally impressive financial outcomes. These include:

• effective resource utilization to maximize existing IT capacity
• asset lifecycle management and change management
• audits and asset-related compliance
• preventing downtime with proactive management

If overlooked or mismanaged, the total cost of ownership (TCO) of a data center can manifest — and thus increase — itself through any of these strategies. For example, with effective resource utilization, higher rack densities equate to more compute power in less space, while dynamic temperature controls and airflow management are required to prevent sophisticated systems from failing. These control solutions provide limited returns if they are not configured efficiently or function on aged data. Additionally, there are costs associated with inaction and data center failure. The financial impact of downtime can rapidly overshadow any cost savings that had been realized until that point.

The most effective way for operators to mitigate potential failure points is through accurate operational data. Real-time insight into asset location, temperature, humidity, air pressure, power use, and CPU utilization is critical if an organization is to transform operational risks into business opportunities. This intelligence can also be utilized to reduce over-provisioning. Any company that purchases new compute capacity because it lacks the data to identify that it has sufficient capacity already, is redirecting funds from initiatives that could otherwise drive business growth.

Asset Savings Span Years

The same strategies apply to an IT asset’s cost over its entire lifespan. Modern servers require a higher capital investment compared to older equipment: however, their corporate value is greater. Technology advances have slashed server refresh cycles from five to seven years to just two to three years. Consequently, it is hardly surprising to see IT departments focused on replacing older hardware for newer, more efficient models.

This practice alone can yield savings from lower energy costs and reduced software-related licensing fees, but shorter refresh cycles mean operators must wring every cent of value from their purchases. From the moment an asset is purchased it is depreciating in value. Time spent in the staging area rather than supporting the business is a lost investment. This can equate to thousands of dollars per asset a day. Implementing asset lifecycle management processes can immediately reduce this asset under-utilization, ensuring that once an asset arrives in the loading dock it is deployed and effectively managed until it is eventually decommissioned.

Global system integrators also play a crucial role in this process. They have a responsibility to their end users to recommend solutions that maximize existing investments and reduce operating expenditures. Integrators should consider setting the management agenda by clearly demonstrating the value of effective asset lifecycle management practices and technologies. There are many compelling examples of financial returns that benefit both the end user and integrator.

The argument moves from compelling to critical when the broader effect of losing an asset is considered. Not only is the equipment’s functionality instantly wasted, but while the asset is misplaced its warranty period is expiring. The asset might miss scheduled maintenance, which could compromise service availability once located and redeployed. Highly paid professional staff have to spend valuable time searching for the missing equipment and it could likely have a negative impact on regulatory compliance.

The risks of non-compliance are clear. The Health Insurance Portability and Accountability Act (HIPAA) is designed to safeguard any hardware or portable devices on which personal information is stored. Similar rules govern the Payment Card Industry (PCI). Noncompliant corporate behavior or submitting inaccurate audits can result in million-dollar fines, while the associated class action lawsuits can extend into billions of dollars. A missing asset might turn out to be the most expensive asset a company has ever owned — a guaranteed way to increase a data center’s total cost of ownership.

To meet the challenges of the global market, organizations need to adopt a holistic, agile and business-orientated approach to data center total cost of ownership. The lean times of the last decade have brought about a renewed focus on enabling business growth and extracting value from every business unit and every asset. It is time enterprises approached data center cost management with the strategic importance it deserves.