tco in the data center - intelligent infrastructure · consult + engineer + commission key industry...
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TCO in the Data Center
July 17, 2012
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TCO in the Data Center
July 17, 2012
CONSULT + ENGINEER + COMMISSION
www.syska.com
© A
ll Rights Reserved
Mission Critical 7x24 Exchange Webinar
Presented by Cyrus J. Izzo, PE
Co-President, Syska Hennessy Group, Inc. July 17, 2012
CONSULT + ENGINEER + COMMISSION
www.syska.com
Key Industry Trends
TCO Concept
• IT Operations
• Design of Modern Data Centers
Changing End User Requirements
Questions and Answers
Agenda
CONSULT + ENGINEER + COMMISSION
www.syska.com
Key Industry Trends
• Do more with less
• Economic trend = fewer IT, Operational and Facilities Staff
• Focus on growing Data Center Efficiency
Optimizing Power Usage Effectiveness (PUE)
Increase critical load density
Reduce resource consumption
• Increased awareness of TCO (Total Cost of Ownership)
CONSULT + ENGINEER + COMMISSION
www.syska.com
TCO Concept
• Why is it becoming more important?
Managing operations with restricted budgets
Manage OPEX and balance CAPEX to optimize long-term financial impact
CONSULT + ENGINEER + COMMISSION
www.syska.com
Design
Construct
Commission & Turnover
Manage & Operate
Site Selection
TCO CAPEX
OPEX
CONSULT + ENGINEER + COMMISSION
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TCO Concept effect on IT Operations
• Lowering TCO and making the right decisions for IT Operations
Should we build, operate, and own our own facility
OR
Outsource and colocate our data center?
CONSULT + ENGINEER + COMMISSION
www.syska.com
TCO Concept effect on IT Operations
• Largest capital expenditure is site infrastructure - 70% is operating expenses and energy costs, the balance is actual IT equipment
• Options to allow IT staff to focus on projects rather than operational support
Colocation
Outsourcing
Cloud computing
• Various industries are following different strategies
CONSULT + ENGINEER + COMMISSION
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TCO Concept effect on Design of Modern Data Centers
• Site Selection
• Design choices
• Energy efficient design and modeling tools
• Time and resource commitment necessary for OPEX opportunities
• Future state
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Changing End User Requirements • Smarter, faster and cheaper
• Zero tolerance for downtime
• Clients are interested in modular buildouts – build what you need, as you need it – just in time
• Focus on emerging opportunities and retaining clients
• New baseline: Uptime and Reliability
CONSULT + ENGINEER + COMMISSION
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Changing End User Requirements
• ASHRAE expanding the range for IT equipment thermal envelope allows us to accept new opportunities for efficient design
Figure 2. ASHRAE Environmental Classes for Data Centers
© 2011 American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. All Rights Reserved
CONSULT + ENGINEER + COMMISSION
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Changing End User Requirements
• Design should provide a robust model to help:
Operate and maintain facilities over lifetime
With less staff
At lower cost
With the tools necessary to succeed
Total Cost of
Ownership
Terry Rennaker
Skanska Mission Critical COE
Mission Critical Magazine
July 17, 2012
Agenda
− Identify the costs
− Expand the boundaries
− Identify the target you are solving for
Identify the costs
18
Identify the cost – Costs are often siloed
IT Costs
Labor Other Utilities (gas, water,
sewer, etc.)
Energy
Maintenance
Capital
Life of system
Identify the cost − Capital and expense
− Direct capital cost − Cost of space − Depreciation annual/remaining − Cost of capital
− Energy − Time of day − Demand − Power source
− Other utilities − Gas − Water/Sewer − Carbon tax
Identify the cost
− Labor − Facility operations − IT operations
− Maintenance − Internal maintenance labor − External/vendor maintenance
− Life of system
− IT
Expand the boundaries
22
Offsite
Entire Facility
Exterior Back of house
Expand the boundaries
White space
Power supply
Energy Storage
Generators
UPS
Pow
er d
istr
ibut
ion
Racks
Servers
Cooling Towers Chillers
CR
AC
Other facilities Other facilities Other facilities
Identify the target
24
Identify the target you are solving for
− What is important to your organization?
Identify the target you are solving for
First Cost Operating Cost
P&L Impact
Payback Period
Balance Sheet Impact
Environmental
Identify the target you are solving for
− First cost
− Avoided capital expense − If you spend this you avoid…
− Operating cost reduction − Energy − Utilities − Labor − Maintenance
− Balance sheet
− Accepted term of payback
Identify the target you are solving for
− P&L impact − Generally Accepted Accounting Principles (GAAP) − Depreciation is an expense − Capital vs Operating lease (FAS 13 tests)
1) There can be no ownership transfer as part of the lease agreement. 2) Does the purchase option cannot constitute a bargain as defined by FAS-13. 3) Lease term must be less than the useful life of the asset 4) The net present value of the rent cannot exceed 90% of the Fair Market Value of the asset 5) The lease term must be less than 75% of the remaining economic life of the asset
Identify the target you are solving for
− Accepted measurement − Net Present Value (NPV) − Return on Investment (ROI) − Return on Equity (ROE) − EBIT − EBITDA
− Environmental − LEED − Energy efficiency − Water efficiency − Carbon impact
Conclusion
− Identify the costs
− Expand the boundaries
− Identify the target you are solving for
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