In an earlier post, my colleague Tom Freeman, Managing Director, Mission Critical Solutions, set the stage for a recent executive exchange in Dallas titled, “Greening of IT and closing the communication gap between CFO’s and CIO’s,” that I participated in along with Kenneth Brill, founder of Uptime Institute and a panel of industry leaders in design and application of data center strategies. I’d like to share with you my key takeaways from that session.
Demand for computer server space is greater than ever. According to Kenneth Brill, the industry is adding a net 1M servers annually which equates to $12-$15 billion in construction value. IT assets represent 50% of total fixed corporate assets and of that, data center facilities represent 50%.
Expenses are also higher than ever. IT budgets are growing at 6% annually. Facilities operating expense is 8% of the IT budget and growing at 20%. Runaway data center costs will marginalize the IT operating expense availability for growth of the business and intensive data center users face meaningful reduced profitability.
What does this have to do with sustainability? Plenty. Energy is one of the primary areas where long-term costs can be controlled via location strategy, negotiation with local EDCs and even thoughtful design. And with C-level executives focused on costs, energy efficiency as a way to reduce costs while also meeting carbon reduction goals which is becoming more important with the new SEC environmental reporting mandates. The connection between IT and sustainability is only growing stronger.
So how do we gain control and create a strategy for managing these assets and expenses?
CFOs need to pay attention to how data centers are being operated. Due to the quick pace of change and complexity of issues, it is difficult at best to know where to begin. We will never be experts, so we must learn to ask the right questions to change behaviors and get results. Start the conversation with your CIO, data center managers and IT decision-makers by asking how data center strategy and overall IT sustainability programs affect costs, energy usage and how those numbers compare against industry benchmarks.
On the flip side, CIOs, data center managers and IT decision-makers must learn to communicate with CFOs in the language they understand. Speak in terms of business performance, return on investment and provide trade-off alternatives. Remember, the CFO is tasked with delivering growth to investors. You must clearly outline the bottom line they need to make decisions appropriately.
Clear communication channels between key decision makers, opens the door for a successful data center strategy.