Although many data centres are taking a wait-and-see approach to determine what effect Eskom's proposed 34% tariff hike would have on business, the hike could result in more companies moving to outsource data.
Greg Montjoie, hosting manager at Internet Solutions (IS), says should the cost of electricity be increased, this would be passed onto the consumer. However, while IS's bill would see a measurable increase, at end-user level, the cost increase would be negligible.
He says other costs, such as capital expenditure in networks and the physical site, are more costly than the electricity aspect of data hosted for clients.
However, as load-shedding previously resulted in more companies moving to outsource their data due to the important nature of data, a power hike could also encourage companies to outsource data.
Montjoie expects an increased move to data centres as companies try to avoid spending large amounts on capital to ensure continuity of power supply. He says a big driving factor towards using a data centre instead of onsite storage is the cost of landing power due to the cost of items such as transformers.
In addition, as bandwidth costs come down and bandwidth becomes more available, accessing remote data will be made easier, says Montjoie.
Wally Beelders, executive director of Vodacom Business, says the cellular company is monitoring the electricity hike proceedings.
“However, it is too early at this stage to speculate on the impact until the price increase is confirmed by the regulator, the National Energy Regulator of SA (Nersa) and Eskom,” he says. A decision on the hike is expected towards month-end.
He says using a data centre can help companies cut down on energy costs. Vodacom Business has a data centre in Midrand.
“By using the data centre, companies can reduce their energy costs by up to a third as it removes their need to run expensive cooling and power systems for their server rooms. It also allows companies to minimise both capital and operating expenses by making better use of technology assets, and can reduce a company's hardware and operating costs by as much as 50%,” Beelders says.
Wait and see
Noah Greenhill, senior GM of marketing and business development at the JSE, says the company keeps its data on site as the share trading information is of a critical nature. He says an electricity increase is not likely to immediately push up the cost of trading. Eventually, however, a higher cost would have to be passed onto customers.
Neotel, which unveiled its new R100 million data centre in Johannesburg this week, and expects to open its Cape-based centre over the next few months, tries to minimise its electricity use.
The second national operator's head of product and solutions, Rajeev Sinha, says the company designed the centres to be as energy-efficient as possible, considering power is the largest cost for any data centre.
He says it is not yet clear whether Eskom will receive the go-ahead for its 34% price hike, which makes it difficult to say whether there will be an impact on Neotel's customers.
“We will be assessing the situation. Obviously, the real impact will only be known when there is an outcome to the situation. If an increase is granted, we will go back to our budget. If it exceeds what we have set aside, then we will have to relook at our situation, but if not then there will be no impact for customers.”
Sinha says there will likely only be a real understanding of the situation in six months' time.
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