The operating cost of a data centre such as power and cooling, while not so much the capital cost, determines the risk of whether a data centre can afford to survive for the next 10 years or not.
This is according to Mees Lodder, KyotoCooling's CEO, who spoke at a demonstration held at KyotoCooling's test centre in Amersfoort, Netherlands.
Lodder explained that data centres around the world face high financial risk because of the hefty initial investments that are made with no promise on profitability. “Many data centres fail because they run out of capacity when the customer's data storage demand exceeds the current data floor and power capacity.
“To make things worse, there's a long period of vacancy, no financial escape during poor markets, and this results in a data centre becoming less profitable.”
Power demand rises
Lodder noted that the problem comes where technology is advancing at a rapid rate with power-hungry multi-core processors coming in that contain upwards of 40 cores. In addition, he said, servers are increasingly demanding more power as data exponentially rises.
“Data centres designed in the 1980s have now reached the end of their lifecycle and are due for an upgrade in power, cooling and data floor space.
According to Lodder, on average, it takes two years for a data centre service provider to secure a contract with a customer; however, the problem lies with the fact that customers do not want to sign-up without first seeing the data centre working for at least a year.
“A EUR50 million data centre investment with no assurances on return on investment is like playing Russian roulette,” says Lodder. “And the biggest risk is that you don't even know whether you will receive customers or not.”
Start small
Lodder advised that data centre service providers need to be prepared for the future.
“Often, companies find that they spend more money on the building of a data centre than originally planned. Through energy price increases, the capital cost of a data centre will become less of a priority and factors such as saving energy through power and cooling will be on the top of the minds of CEOs,” said Lodder.
Lodder claimed that modularity is the answer to building innovative data centres in order to drive profitability.
“Start with basic building blocks with minimum cooling and power capacity. Expand the cooling, power capacity step-by-step in relation to the customer demand and the growth of the data centre. The system needs to be built according to the growth of the storage demand from customers,” he asserted.
“Less capex [capital expenditure] means less financial risk, especially in tough financial times. It is better to have several smaller data centres than one big data centre. Going modular will result in better time to market and better decision-making.”
Research from telecommunications service provider KPN predicts that the cost of energy usage will increase by 50% in 2012. In addition, KPN claims 85% of the total costs of a data centre stems from operating costs.
According to global research firm Gartner, energy-related costs account for approximately 12% of overall data centre expenditure and are the fastest-rising cost in the data centre.
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