Many IT-related decisions ideally hinge — or should, anyway — on the total cost of ownership (TCO) of a company’s data center.
Easier said than done.
“There are no recognized standards for measuring the TCO of the physical infrastructure of data centers,” says a report from American Power Conversion (APC), a Rhode Island-based global leader in network-critical physical infrastructure solutions. “Simple methods of summing various capital and operating expense items do provide insight into total cash outlay, but they do not account for the utilization of the equipment.”
“Consider the case of two data centers, each 100kW capacity and built identically,” the report states. “In one case the data center is fully utilized to 100% of the space and power capability; and in the other case the data center has only a single rack with 2kW of equipment. While the cash cost of operating these two facilities over their lifetime is comparable, the useful return on that investment is totally different.
“In the totally utilized case, the TCO of the data center is spread over a large amount of equipment providing useful services. In the lightly utilized case, the entire burden of the expense of the physical data center infrastructure must be borne by the single rack.
“When TCO of physical data center or network room infrastructure is measured from the point of view of the useful work performed, namely how much IT equipment is supported, underutilization can drive extraordinary cost,” according to the report.
The APC report concludes that the single largest TCO cost driver is the unabsorbed overhead cost of underutilized IT infrastructure.
For companies considering the cost advantages, say, of an internal IT infrastructure versus an outsourced one, it’s important to also remember our recent posts on this blog on “Data Center Overbuilding,” pointing out that the average data center is oversized by three times its design value, and at commissioning, tends to be oversized — read “underutilized” — by up to 10 times.