Datacentre race heats up

With energy prices spiralling and channel firms under pressure to deliver green solutions, Hannah Breeze examines how datacentre owners can keep costs down and safeguard margins

With the first snow of the season having fallen late last month, the Forum of Private Business (FPB) recently warned that a winter of discontent could be on the cards for UK plc if the temperature falls as fast as energy costs rise.

Last month, British Gas and rival nPower upped their prices for gas and electricity by six and nine per cent respectively. But while businesses tied into long-term, fixed-price contracts may not feel the pinch immediately, the direction in which prices are heading may not spell good news for UK companies when the clock runs out on their deals.

Contending with the increased cost of heating, lighting and powering employees' computers and other office equipment may be a concern for most businesses. But how will channel players with huge datacentres to power fare in the struggle to reconcile heightened energy costs with the need to maintain margins and preserve profits?

Research from the FPB last month reported that 95 per cent of its members said they had experienced an increase in their business costs in the past quarter, with 85 per cent blaming increased energy prices for the hike in expenditure. The report also showed that a third of respondents felt they were unable to pass on the costs to their customers, forcing them to cut profit margins to the bone to keep clients' prices static.

FPB spokesman Robert Downes said: "The issue businesses have with energy is that it is a cost that cannot be ducked; all firms rely on electricity to some degree. Some businesses are more affected than others: the larger the premises, the more
they are stung.

"Just how tough [the coming months will be] depends on what the weather does. If we see a repeat of the 2000 and 2010 winters, it could well be the final nail in the coffin for many traders following what has been another extremely tough trading year. Many firms may not make [it to] spring."

But how much of an impact will the price hike have on resellers and datacentre services providers, and are there innovative ways to keep expenditure low and performance high?

According to Gartner research in 2010, energy-related expenditure accounts for about 12 per cent of the overall cost of running a datacentre and is the fastest-rising overhead.

Simon Daykin, chief technology officer at Logicalis, said energy costs are am "fundamentally important" consideration for resellers and hosters. "In the datacentre, energy is one of the single biggest costs, and being able to keep up is key for staying on top," he added. "The efficiency with which you deliver operationally is affected hugely by energy prices, and [companies] can lose their competitive edge if they do not keep up."

Business energy advisory body Business Juice advises that companies struggling with their energy bills need to compare prices thoroughly and think about signing up for longer tariffs. David Ellis, director of new technology and services at distributor Computerlinks, claimed end users are also feeling the pinch, and this has an effect on which channel firms they choose to work with.

"We are seeing more tenders coming out looking for partners with good green power credentials. [End users] want to know how green [resellers] are, and what they are doing about it. Resellers do not just save [utility bill] costs by looking at more energy-efficient technology, they become more attractive to end users for it too," he said.

"If channel businesses can reduce costs, it has a good impact on bottom-line profits. Resellers are pressurised from a cost perspective and from end users too; [energy costs] cannot be ignored from either end."

Turning green
Whatever the external pressure to reduce energy costs and boast green credentials, internal bureaucracy can prevent companies investing in energy optimisation. While in some smaller firms all costs are managed together, as businesses grow and budgets are divvied up between departments, cost control can often be taken from the hands of those in the know, according to Scott Bradley, 2e2's principal consultant for datacentre services.

He said that in some firms, if a facilities management-type department takes control of the energy budget, it means that bids for more energy-efficient technology are hampered because utility bill evidence is not available to technology professionals to include in the proposals, which can be undermining.

"There is always a struggle to get new [optimised] equipment paid for by the business, and if the energy costs are not part of the bid [due to being run by another department], they cannot be factored into an optimisation pitch," he added.

"It is just red tape that is holding back energy optimisation. The only way to get the whole picture for how to optimise energy costs is to give the billing to the IT department. Energy costs need to be a part of the full picture."

And it is not just powering up the racks of technology stacked up in the datacentre which requires vast amounts of energy: cooling the machines can take up the same the amount of energy as is required to power them in the first place.

Keeping your cool
One channel firm which thinks it has found a way to cut its energy bill by as much as half is Brighton-based reseller and services provider Mason IT. Brighton may be well known for its green credentials, but the company's solution is far from the city's shores. Lured by the prospect of vastly reduced bills, and with the help of its native co-founder Gisli Helgason, Mason IT has built a datacentre in Iceland to reap the benefits of a natural, and, more importantly, free cooling system.

The reseller, which also owns a UK-based datacentre for customers wishing to keep their data close by, said the cost gap between powering the two systems is wide.
Wesley Mezzone, director of Mason IT, said his firm is enjoying huge demand for space in its Icelandic facility due to the cost savings associated with its free, natural cooling.

"In essence, for every kilowatt of energy it takes to power a datacentre in the UK, it takes another kilowatt to cool. So to power a whole rack, you have to pay the same again to cool it down. In Iceland, you can make immediate cost savings as cooling is free. In the UK, you might pay £1,000, for example, to power part of a datacentre, but in Iceland it is only about £700," he said.

"In the UK, the increased energy prices are crucially important. In Iceland, we can guarantee fixed energy pricing, but in Britain there is a year-on-year question mark hanging over it."

While packing up and heading north may seem drastic, closer to home, resellers are finding ways to escape the energy bills with ever-evolving technological innovations.
2e2's Bradley added that new technology is the way forward, and sweating assets just prolongs high spending and stifles the adoption of better technology.

He said: "With the increased pressure that end users are putting on resellers to be cheaper, and energy costs rising year on year, technology gets squeezed and new projects drop off the agenda.

"It is critically important [to replace old, inefficient kit], otherwise you could be going as long as eight years with the same [technology]; imagine how much the bills could have gone up in that time."