Averting the IT Energy Crunch

As a threat to operations and the bottom line, corporate computing's fast-growing power consumption is forcing companies to adopt green energy practices

by Rachael King

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Engineers at Hewlett-Packard (HPQ) made a startling realization about the servers running the company's computing systems. Surging power consumption, along with rising energy costs, will soon make it more expensive to keep a server going for a year than to acquire one in the first place. Left unchecked, costs like these could interfere with HP's goal of cutting energy consumption 15% by 2010.

So when HP began constructing a new 50,000-square-foot building to house high-powered computers, it sought advice from Pacific Gas & Electric (PCG). By following the California power company's recommendations, HP will save $1 million a year in power costs for that data center alone, PG&E says.

Like HP, companies across the globe are adding equipment to keep up with surging computing needs—and then are forced to make substantial changes to curtail the leap in costs associated with running the big buildings, or data centers, housing all that gear. "Data centers use 50 times the energy per square foot as an office [does]," says Mark Bramfitt, principal program manager at PG&E.

Industry experts say the power consumption of data centers is doubling every five years or so, making them one of the fastest-growing drags on energy in the U.S. "The IT industry is where the automotive industry was 20 years ago," says Rakesh Kumar, research vice-president at consulting firm Gartner (IT). "We are so backwards when it comes to using alternative-energy and energy-efficient technologies."

Chilling Data

To keep servers at the right temperature, companies mainly rely on air-conditioning. The more powerful the machine, the more cool air needed to keep it from overheating. By 2005, the energy required to power and cool servers accounted for about 1.2% of total U.S. electricity consumption, according to a report released in February by staff scientist Jonathan Koomey of Lawrence Berkeley National Laboratory and sponsored by chip manufacturer AMD (AMD). Gartner reckons that by 2010, about half of the Forbes Global 2000 companies will spend more on energy than on hardware such as servers. Energy costs, now about 10% of the average IT budget, could rise to 50% in a matter of years, Kumar says.

That is, unless companies take some radical measures—soon. The first step is coming to terms with the power constraints of existing data centers and then deciding whether to construct new ones. That's a pricey choice, considering a new data center can cost $1,000 per square foot, by PG&E's estimates.

Another, often more alluring option: operating current centers in a more energy-efficient way—a tack taken by a growing number of companies, including Sun Microsystems (SUNW), Verizon Wireless, and Wells Fargo (WFC). They're lowering energy bills by making better use of existing gear and harnessing advances in cooling techniques and data-center design. "We've avoided roughly $20 million in build-out costs by being more efficient," says John Hinshaw, chief information officer at Verizon Wireless. The joint venture of Verizon Communications (VZ) and Vodafone (VOD) cut its number of data centers from 10 to 3, he says.

Who Gets the Electric Bill?

But if cutting costs isn't enough incentive, some executives may soon have little choice in the matter. Before now, at many organizations, the chief information officer didn't even see the utility bill, and operations or facilities departments often picked up the energy tab. But at a growing number of companies, reducing energy consumption is becoming part of the CIO's job description. "More [chief financial officers] are becoming aware of the energy bill and are starting to hold CIOs responsible," says David Douglas, vice-president of eco-responsibility at Sun Microsystems.