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The Catch-22 of Powering Today's Corporate Data Centers

Posted on: Wednesday, 12 September 2007, 12:00 CDT

CHICAGO, Sept. 12 /PRNewswire/ -- If IT leaders hope to operate their infrastructure both reliably and cost effectively, they will need to take an active approach to the immensely power-hungry world of corporate data centers, according to Diamond Management & Technology Consultants, Inc. .

Corporate data centers have become incredibly powerful while also reducing their physical footprints. However, these data centers -- arguably the engines of the U.S. economy -- have played a significant role in bringing to light the frailties of the U.S. electrical grid.

"We are encouraging IT leaders to employ a multi-pronged approach -- one that ranges from demand optimization on site to active participation in the legislative process -- to bring their demand for electricity under control," said Jeff Hughes, a Partner in Diamond and Practice Director of the firm's Technology Operations services. "Failure to do so could have a detrimental impact on the growth of this critical economic sector.

"Power issues -- on both the generation and consumption sides -- have a direct and measurable impact on IT leaders' ability to operate their infrastructure reliably and cost effectively. We believe CIOs have the means and the opportunity to curb power consumption."

In a new white paper, "The Power of IT," Diamond provides a complete picture of how the industry arrived at this power-drained point and provides a holistic approach for how the C-suite and IT managers can fuel the future of more energy- and cost-efficient data center operations. To request a copy of the full paper, send an email to: powerofIT@diamondconsultants.com.

The following points outlined in the white paper illustrate the urgency of the power crunch:

-- 70% of U.S. data centers will require major upgrades or replacement in the next five years to meet future power, cooling, and other demands, according to the Uptime Institute. -- More than 50% of all data center managers and IT leaders plan to relocate facilities or outsource selected applications -- mainly due to growing costs of powering and cooling data centers, according to AFCOM, an association of data center managers and IT leaders. -- The Energy Information Administration predicts an average increase in demand from commercial clients of 1.9% per year for the next 20 years. But data center power demands are growing at an average of 8% a year -- with the most "power-hungry" centers growing at more than 20% a year. A Multi-Pronged Framework for Mitigating Power Problems

Diamond has developed a five-part framework for how CIOs can take an active role in growing industry-wide initiatives to solve this critical power problem, and demand optimization is key.

Demand optimization through active IT portfolio management provides an effective means of reducing energy costs -- rigorously reassessing which assets warrant further investment and which assets can be cut back. "Companies can easily make the mistake of overlooking the benefits of reducing infrastructure to support a more optimized technology portfolio," Hughes said.

Diamond research shows an increasing recognition that optimizing the technology portfolio can yield significant benefit. Eighty-nine percent of CIOs polled were aware of portfolio management practices, and 65% believed proactively managing their IT portfolio would yield cost savings and improved alignment with business objectives.

Oftentimes, demand optimization produces benefits that wouldn't have been apparent at the outset. For example, Diamond worked with a Fortune 500 insurer to help the company simplify a portfolio of more than 500 applications across 200 business functions. Diamond quickly identified 90 simplification opportunities that translated into $10 million in annual savings on maintenance, development, and infrastructure -- which also helped the client improve the effectiveness of its technology governance committees by building a tighter linkage to business units.

In addition to demand optimization, CIOs should work with both hardware providers and utility companies to achieve near-term relief in managing their infrastructure power concerns. IT leaders should collaborate to bridge inconsistencies in electricity production, regulation, and transmission infrastructure. Finally, while industry group can help technology leaders find common ground, these same CIOs must help draft public policy to help the United States' struggles in defining a comprehensive energy strategy that meets demands of cost, environmental responsibility, reliability, and even national security.

Hughes said: "Since information technology is the engine that propels growth across every domestic industry, the nation's IT leadership is uniquely positioned to assist in defining public policy regarding energy production, transmission, and consumption."

About Diamond

Diamond is a management and technology consulting firm. Recognizing that information and technology shape market dynamics, Diamond's small teams of experts work across functional and organizational boundaries to improve growth and profitability. Since the greatest value in a strategy, and its highest risk, resides in its implementation, Diamond also provides proven execution capabilities. We deliver three critical elements to every project: fact-based objectivity, spirited collaboration, and sustainable results. To learn more visit http://www.diamondconsultants.com/.

Contacts: Nicholas Braude Media Relations +1.312.255.5802 nicholas.braude@diamondconsultants.com Margaret Boyce Investor Relations +1.312.255.5784 margaret.boyce@diamondconsultants.com

Diamond

CONTACT: Media, Nicholas Braude, +1-312-255-5802,nicholas.braude@diamondconsultants.com, or Investors, Margaret Boyce,+1-312-255-5784, margaret.boyce@diamondconsultants.com, both of Diamond

Web site: http://www.diamondconsultants.com/

Source: PRNewswire

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