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Research: Larger data centers make considerable savings on operating costs

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In defense of consolidation

The size of a data center has a direct impact on the relative level of operating costs, with larger facilities spending considerably less per kW of IT load, suggests a study commissioned by Emerson Network Power (soon to be sold to Platinum Equity) and carried out by Ponemon Institute.

Researchers looked at 41 data centers in the US and found that cost per kW for small data centers (500-5,000 sq ft) stood at approximately $26,495, but large facilities (50,000+ sq ft) were expected to pay just $5,467 per kW.

Las Vegas SuperNAP 8 data center

Source: SuperNAP International

Switch SuperNAP data center in Las Vegas, Nevada – a colocation campus with more than 2.3 million sq ft (210,000 sq m)

Economies of scale

The first ever Cost to Support Compute Capacity Benchmark Study analyzed annual data center costs in four categories: physical plant, IT assets, operating and energy costs. It also collected data on IT load, number of racks and average rack density.

Using this data, Ponemon Institute calculated an average cost to support 1 kilowatt (kW) of compute capacity for each of the five data center size ranges. It was evident that cost/kW decreases as data center size increases, but the real surprise was the disparity of costs.

Table 2

Source: Ponemon Institute / Emerson Network Power

Ponemon Institute said economies of scale were observed in all cost categories, but were most evident in electricity pricing, with a 180 percent difference between energy costs for smallest data centers when compared to the largest.

The research organization also found that cost per kW decreases rapidly with increased rack density. Data centers with an average rack density of 8.5 kW had a cost per kW that was 68 percent lower than data centers with an average rack density of 4.5 kW.

Figure 3

Source: Ponemon Institute / Emerson Network Power

“With the variety of outsourcing options available today, it’s more important than ever for data center operators to understand the costs associated with supporting compute capacity and the major components of those costs,” said Peter Panfil, vice president of global power for Emerson Network Power.

“This report provides a template for data center operators to get a handle on their costs and make informed decisions about future outsourcing, while evaluating technologies and best practices that can lower their costs.”

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