Assess any industry leader’s corporate structure, and the data center likely will be central to the organization’s success. This has led many businesses to re-evaluate how data center efficiency, accountability, and the total cost of ownership (TCO) of facilities are managed.
When directed to reduce operating expenditure (OpEx) by the Chief Financial Officer, most data center managers will focus on cooling and power efficiencies. This is because relatively minor environmental alterations can deliver immediate and impressive cost reductions.
However, while environmental efficiency is undeniably important, there are other strategies that can deliver equally impressive financial results and are often overlooked. These include the following:
- Maximizing existing compute capacity
- Proactive asset lifecycle management
- Compliance and audit guarantees
- Assuring 100 percent business continuity and service quality
If any of these operational aspects are mismanaged, data center TCO can quickly reach unsustainable levels. For example, with resource utilization, increasing rack densities requires dynamic temperature controls and airflow management to prevent sophisticated systems from failing. However, these temperature control systems deliver limited efficiency returns if they are configured incorrectly, especially if outdated thermal data is used as part of the decision-making process. In addition, there are the costs associated with data center failure, which can immediately overshadow any previous financial savings.
Proactively managing capital assets, however, is by far the most effective and financially diligent method of protecting potential points of failure and unnecessary expense. Real-time insight into asset location, temperature, humidity, power use, and workload management is critical if a business is to transform its operational risks into business advantages. This intelligence also can be utilized to reduce costly asset over-provisioning and unnecessary colocation initiatives.
Recurring Asset Savings
The same attention to detail should be applied to an IT asset’s cost over its entire lifespan. Purchasing new servers requires a greater capital investment than the cost to maintain older equipment, but offers greater value to the corporation. Newer hardware is significantly more efficient, especially with advances in technology reducing average refresh cycles from 5-7 years to 2-3 years.
This practice alone can deliver lower energy costs and reduce software-related licensing fees, but shorter refresh cycles mean that operators must maximize their investments from the moment that the assets are purchased. Any time spent in the staging area can be considered a lost investment. Assets held in storage for redundancy reasons should be assessed to reduce asset under-utilization. Savings can equate to thousands of dollars per asset every day. From a commercial perspective, asset inaction can be as damaging as unplanned downtime.
Consider IBM’s successes achieved from automating the company’s asset management. The company increased asset inventory accuracy from 71.8 percent to 99.8 percent, which has delivered more than $40 million in recurrent savings. IBM has dramatically increased system utilization and performance, automated change management processes, and reduced asset reconciliation time and costs.
The argument shifts from compelling to critical when analyzing the effect a lost asset has on data center TCO. Not only is the equipment’s functionality wasted, but while it is misplaced, the asset’s warranty period is expiring. It might miss scheduled maintenance, which could compromise service availability once the asset is redeployed. Highly paid employees have to spend valuable time searching for the missing equipment and, worse, its loss could affect compliance with industry regulations.
Meeting Auditor Requirements
The risks of non-compliance are great. For example, the Health Insurance Portability and Accountability Act (HIPAA) is designed to safeguard any hardware or portable devices on which personal health-related information is stored. Similar governance applies to the Payment Card Industry (PCI). Noncompliant corporate behavior or submitting inaccurate audits can result in fines in the tens or even hundreds of millions of dollars, while the associated class-action lawsuits can be in the billions.
Sample fines from HIPAA show how substantial penalties can be:
- $1.73 million – Concentra Health Services (April 2014), laptop
- $1.7 million – Alaska Department of Health and Human Services (June 2012), USB hard drive
- $1.5 million – Massachusetts Eye and Ear Infirmary (September 2012), laptop
- $1.5 million – Blue Cross Blue Shield of Tennessee (March 2012), 57 hard drives
A missing asset could turn out to be the most expensive asset a company has ever owned. Businesses are under more regulatory scrutiny than ever before, and auditors are not forgiving. Companies must possess the capabilities to meet auditor requirements quickly and cost effectively, otherwise they might find themselves hit with a massive fine that impacts the total cost of ownership of the data center.
The lean times of the last decade have brought about a renewed focus on enabling business growth and extracting value from every business unit. The data center is no exception. Organizations need to first identify potential cost savings and then implement strategies that provide the capability to act swiftly and comprehensively to reduce data center expenses.
Richard Jenkins is Vice President, Worldwide Marketing and Business Development at RF Code.
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