Revolutionizing Data Center Energy Efficiency

McKinsey & Company Point of View

Data centers are driving rapid expense growth for many technology-intensive businesses. Despite the huge amounts of capital tied up in data centers, significant inefficiencies exist. Average server utilization seldom exceeds 6 percent and facility utilization can often be as low as 50 percent. With average data center costs now threatening to crowd out other technology investments, the matter has become a board level concern.

Here are a few important learnings from the report:

• Data center facilities and electricity cost are growing at 10-15 percent a year with many clients pursuing data center build programs reaching upwards of $500M; this growth shows no sign of stopping due to the increased demand for computing resources.
• Aside from the rapidly rising cost, green house gas emissions from data centers will quadruple by 2020.
• Most organizations remain very inefficient in managing the return on spend of their data centers (very low server and facility level utilization) and operational improvements can (in most cases) lead to a doubling of efficiency by 2012.
• Keys to attaining this doubling of efficiency are taking the following steps (a) making the CIO responsible for all data center facilities costs (b) implementing more mature capabilities for asset management and true total cost of ownership and (c) creation of a new technology "Energy Czar" position to implement an operational and technical plan for driving the required changes across the organization.
• The data center world should establish a single means of measuring data center efficiency, similar to the miles per gallon standard used by automakers.

  


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