The Buzz: Why (and How) Data Center Efficiency Matters

This is the second in a two-part series on data center energy efficiency. In part 1 we highlighted the recent NRDC assessment and dove into what IO is doing to improve energy efficiency in the data center. Here, we dive into why data center efficiency matters – from the financial, environmental, and regulatory perspectives.

Data center efficiency matters – to the bottom line

Facebook has made headlines with the story of how it developed – and then opened up to others – data center, power management, and server designs specifically geared toward improving data center efficiency (that is the Open Compute Project). The bottom line result: 38% increase in energy efficiency and 24% decrease in cost. For an operation the scale of Facebook, that 24% is huge: Facebook’s full-stack optimization efforts have helped save the company more than $1.2 billion in infrastructure costs over the last three years.

Google, which reports that its data centers use half the energy of typical data centers, says that energy savings has translated to cost savings of $1 billion to date.

Financial savings can be realized by smaller-scale data centers as well. For example, when PulsePoint – a global digital marketing company – was planning a move to a new data center, the company decided at the same time to consolidate its server and storage array, and upgrade its network switch equipment. Through the consolidation (from 348 old servers to 67 new ones) and upgrades, the company reduced its data center energy usage by 1.46 million kWhs annually (enough to power 135 homes)[1] – for an annual energy cost savings of $246,000.

Data center efficiency matters – to the environment

As we all know, data centers consume a lot of power. (If the cloud were a country, it would be the world’s 6th largest consumer of electricity.) The production of much of that power consumes a lot of carbon, and produces a lot of greenhouse gas emissions. (IT-related services now account for 2% of all global carbon emissions – roughly the same as the aviation sector.)

So when data centers can reduce the amount of energy they consume, that savings translates into a smaller carbon footprint and lower greenhouse gas emissions. And the savings can be significant. For example, Facebook’s adoption of OCP data center designs had by April 2011 saved enough energy to power 40,000 homes for an entire year. The associated carbon savings is equivalent to taking 50,000 cars off the road for a year.

Data center efficiency matters – to regulators

Because of the significant environmental impacts associated with energy consumption, governments around the world have implemented, or are looking to implement, energy efficiency-related regulations. For example:

  • In the United States, federal legislation targeting data center efficiency might be in the works. In March 2014, the House passed the Energy Efficiency Improvement Act (H.R. 2126), which, among other things, calls for federal agencies to increase the energy efficiency of the data centers they operate. And the Federal IT Acquisition Reform Act (H.R. 1232), passed by the House in February, tasks federal CIOs with creating data center optimization plans that take into account energy use.
  • In Europe, the European Commission’s Code of Conduct includes guidelines for data center efficiency. But the initiative is voluntary, and reports suggest that it has received less buy-in from major data center operators than was hoped. In the UK, regulators have opted for incentives to promote data center energy efficiency; colocation data centers in the UK can now take advantage of the Climate Change Agreement to opt out of green taxes on the electricity they use.
  • In Singapore, the newly released Green Data Centre Technology Roadmap sets a framework for the reduction of carbon emissions and improvement in efficiency associated with data centers in Singapore from 2015 to 2030. Already, the government standard SS564 provides energy efficiency guidelines for data center operators, and the BCA Green Mark Scheme recognizes buildings constructed for environmental sustainability. “You could say Singapore is the only country in the world which has a national standard for data center energy performance.”

Many people assume that data center efficiency is just an environmental issue, a banner to be taken up by Al Gore and Greenpeace and the like. But clearly, data center efficiency is a critical enterprise issue as well. It’s critical because of the huge financial implications of data center energy efficiency (or lack thereof) and the regulatory compliance implications. So data center efficiency matters – to the bottom line, the environment, and to regulators.

To learn about what data center operators and others are doing to improve data center efficiency and realize the financial, environmental, and regulatory benefits associated, check out part 1 of this series, Yes, NRDC, Data Center Efficiency Matters – And Here’s What’s Being Done.

[1] In 2012, the average annual electricity consumption for a U.S. residential utility customer was 10,837 kWh.

DISCLAIMER: This document is for reference purposes only. The information contained herein should not be relied on and neither IO Data Centers, LLC nor any of its affiliates makes any warranties or representations as to its accuracy.