Is Wall Street's Datacenter Headache Curable?

Tuesday Mar 24th 2009 by Alex Goldman
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Datacenter pros at financial services firms deal with new challenges as the bottom line demands cheaper yet still more efficient IT support.

Datacenters
NEW YORK -- It's no surprise that datacenters consume power and money, and IT teams are being asked to make do with less of both.

Fortunately, there are plenty of strategies, from co-generation to virtualization, that can help them meet this challenge, experts told the financial industry during last week's seminar of the Wall Street Technology Association.

Energy efficiency starts with energy monitoring: You have to know what you're using before you can decide how to save, said Johna Till Johnson, president and senior founding partner of Nemertes Research. She said that far too many companies are not measuring energy usage, and added that those that aren't should start doing it now.

The challenge comes at a time when many companies are facing a datacenter crisis. Many enterprises need increasing amounts of storage and computing capacity but are trapped by small, inflexible datacenters. The solution has become a mixture of building more datacenters while conserving energy in existing ones.

The largest firms are consolidating multiple datacenters, said Ron Bowman, executive vice president of Tishman Technologies, a datacenter subsidiary of the Tishman real estate firm. He said that his company has developed a matrix consisting of over 80 variables to help companies choose which datacenters to keep.

Cutting power costs

Such an elaborate process is necessary considering the heavy power use and the consequences of that power use that make datacenters a headache. On the other hand, the construction itself is far less of a factor.

"Datacenters are just bent metal," said Bowman.

Nemertes' Johnson said that a datacenter is like a machine that takes in power and uses it to generate heat and bits. But machines fall into disrepair and out of date for the latest tasks: Companies with old datacenters find their buildings are not designed to handle the heat generated by the latest blade servers, she said.

The problem is not the servers alone, though. Johnson admitted that when she was CTO of a company, she made a basic error in designing a datacenter: She neglected to factor in the power used by the routing equipment.

But servers are where the easiest power savings are found. Even the most savvy may not know how much energy they use. Nemertes tracks a few hundred companies that it calls its "benchmark group" -- early adopters that she said "tend to self-select when they choose to participate."

Nevertheless, even this elite group is in the dark about its power usage. Johnson said that 87 percent of the benchmark group do not know their datacenter energy costs and don't turn off servers when they're idle.

If you don't know how much you're paying for electricity, hire an intern, Johnson said. One of her clients hired a college student over the summer and put him in charge of the company's "green project." He went throughout the company, gathering the utility bills, and presented the data at the end of the summer. "He was motivated," she said. There are other expenses businesses should weigh when thinking about reducing power costs. For one thing, while energy is a big expense if you have a large number of servers in several datacenters, it's more expensive than it needs to be if they're located on prime real estate.

Bowman noted that the financial industry has located the majority of its datacenters in the most expensive real estate in the U.S. -- which is often where electricity is also the priciest: New York and New Jersey, Washington D.C. and Northern Virginia, San Francisco, Chicago, and Los Angeles.

He said companies can save millions by building datacenters near cheap energy and land. Electricity is over $0.20 kilowatt-hour (kWh) in the New York area and nearly that high in California, but far lower in other places. Dominion Power in Northern Virginia provides electricity at $0.08 per kWh, he said. Locations that use geothermal or other renewable energies can deliver even lower prices, he added, and companies should consider locations as distant as Iceland, Russia, and Dubai in the United Arab Emirates, as well as places that are closer such as Greensboro and Nashville in the U.S. Real estate is also cheaper in Greensboro and Nashville than in the urban areas that house so many datacenters today.

Bowman said that companies should also consider the dollar savings that can be earned by moving to low tax areas. Tax law is changing, he said, and some states may waive sales taxes on equipment to make them more attractive to companies building or improving their datacenters. Others already have low taxes.

Companies should also learn about state and federal subsidies for fuel cells, said Kathy Perone, president of First Element Technologies. She said that a 400 kW fuel cell could cost $2 million to install, but could be eligible for $1 million in state grants (depending on the state) and a $500,000 federal tax credit.

Page 2: Virtualization... and the nuclear option.

Virtualization

But even if you're not ready to move your datacenter, there's plenty you can do to save energy and money. Johnson said that her first recommendation to everyone is to use virtualization, and to use more of it if you're already doing it.

"Virtualization is good for you," she said. "It is the broccoli of technologies. If you want more agility, virtualization can deliver it. If you want to cut costs, virtualization can do that. You want to lower power use? Virtualization!"

She noted that although many enterprises have virtualized some applications on their servers, few have virtualized desktops -- and that's not always a mistake.

"Desktop virtualization won't necessarily lower costs," she admitted. Other related aspects of virtualization deliver also fewer benefits, but are still valuable, she said. They include virtual applications, live migration, OS standardization, and implementing network storage.

Among the firms she surveys, 55 percent use fibre channel for storage, and 27 percent use iSCSI, but iSCSI is gaining traction, she said.

She had one word of warning, however: She said that some organizations are so eager to implement virtualization that they are neglecting virtualization security.

Looking ahead

Experts also had a range of suggestions for future technologies and approaches that enterprises should consider when it comes to their datacenters.

Take flywheel technology, for example. Johnson said that a company from her home state of Texas has developed a product that was initially intended only for the most demanding customers, but that it has adjusted its product line to meet demand from every market segment. Active Power's flywheel product stores energy under normal conditions and converts it back to energy when power is cut.

"Flywheel devices bridge the gap between line power and backup and help during brownouts," Johnson said. Additionally, Tishman Technologies' Bowman said that datacenters need to plan to generate a portion of the power they use.

"The best way to protect the integrity of data from shortages in the market is to generate at least 25 percent of the load with a green energy solution," he said. "Enterprises should consider cogeneration, solar power, wind power, geothermal power, bio waste, and hydrogen fuel cells."

Bowman also discussed a more radical solution: the use of nuclear technology. He said that a 600 kilowatt (kW) or 700 kW nuclear generator could cost $1 billion to $3 billion to build (with full quadruple redundancy in the equipment) but that the electricity it generates would cost only $0.04 per kWh.

"I'm a fan of nuclear," he said. "It's fossil fuel on crack."

But some new approaches are far less radical. If you're building a datacenter now, Bowman added, you should raise the ceilings, especially if you're building on cheap land.

"Let's think about getting the heat out as much as we think about getting cooling in," he said.

Getting IT on the ball

All these plans might be easier said than done at most firms, Johnson said, since doing so involves new responsibilities for the IT team.

In many enterprises, IT has already taken over facilities management. But she added that the union of the two groups was initially more about security than about energy management.

"IT was the only group willing to step up to handle the infrastructure risk," she said. "Security might be video over IP or biometrics, but all of a sudden, it required the IT team. With today's smart buildings, IT is even more involved in facilities than ever before."

Still, if cheaper and more efficient datacenters are on the horizon, IT will have to take at least one key page from the playbook of the traditional facility management organization.

"Few IT teams plan as far ahead as five years, and many don't plan farther ahead than one year," Johnson said. "Datacenters have to last for 20 years. If the IT team had to forecast that far ahead, they'd have no idea. They'd say, 'We'll be flying around in little jet suits or something.'"

This article was first published on InternetNews.com.

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