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Datacenters: Friend or Foe?

Presidio Economics | Saturday November 19th, 2011 | 4 Comments


3p is proud to partner with the Presidio Graduate School’s Macroeconomics course on a blogging series about “the economics of sustainability.” This post is part of that series. To follow along, please click here.

By: Jeff Rangel

Datacenters in the cloud are the backbone of today’s innovation economy and social platforms; they have taken us from paper and pen into the sky – and they are big business. A US Wireless Industry Overview projects that the 4G network alone could create more than 500,000 jobs and grow GDP over $100 billion by 2016. Worldwide network devices are forecasted to approach 15 billion units by 2015 – that’s more than 2 devices per person. The growing App industry is expected to be $57 billion that same year. U.S. Census Bureau data indicates that more than 140,000 establishments comprise the trillion-dollar data processing, hosting and related services industry.

All this growth is enabled by the cloud. From the cloud I can update my status on Facebook, post photos on Flickr, share my location on FourSquare, announce my every thought on Twitter, download nearly anything on my iPad – even pursue an MBA in sustainable management. Oh, yeah, I can call home too. And if that isn’t enough, cell phones, Apps, and Twitter can have a social benefit too. The cloud can transform learning and benefit the environment, education and equality. Sounds to me like datacenters are my friend.

But, not so fast; a 2011 study reports that datacenters consumed about 1.3 percent of worldwide electricity use in 2010. By region, the consumption rate grows to 2 percent for the U.S. alone. That’s an increase of nearly 3 times since 2000. According to McKinsey, worldwide datacenters produce 80 metric megatons of carbon emissions. By industry, carbon emissions from datacenters are approaching outputs of the airline industry. If datacenters were a country, they would produce the equivalent of 60 percent of the emissions generated by Argentina. If that’s not bad enough, the same McKinsey study projects that datacenter carbon emissions will increase to 340 metric megatons by 2020. And the financial price tag is big too. Gartner reports that energy consumption of a 25,000 sq. ft. datacenter can run $4.1 million a year.  This is significant – enough to consider datacenters a Foe.

I know that there is an argument that we simply have too much stuff. But it’s hard to set aside the overall value of responsible use of technology and its related advances. So how can I reconcile these extremes? Answer: Green Data centers.

Smart networking companies are creating new products that are more energy efficient. Smarter companies are making capital investments in these products and services to reduce their energy consumption and carbon emissions – which by the way also improves their bottom line. Smarter yet, consumers are realizing that the entire equation is better for the environment and their voice is driving behavior; that’s a win-win-win.

Within the industry, companies like Fujitsu and Oracle are conducting life cycle assessments to understand and improve the environmental impact of their network servers and management systems. These new products are more efficient – reducing energy use by 37 percent. Further environmental benefits can be obtained by addressing the entire datacenter infrastructure. For example, Brocade’s LEED Gold San Jose Headquarters combines the company’s own technology offerings with innovative design in space planning, cooling, water and electrical systems. The company’s systems approach to design reduced the datacenter’s physical footprint by 30%, rack footprint by 20%, water consumption by 40% and energy consumption by 14 million kilowatt hours per year. Green IT design delivers more than environmental benefit. Business is reaping considerable returns as well – earning multi-million dollar energy rebates and improved bottom line results.

What do you think? I say, pull out that mobile device, look to the cloud and enjoy all that the green datacenter puts at your fingertips.

[Image Credit: massdistraction, Flickr CC 2.0]

Jeff Rangel is an MBA Candidate at Presidio Graduate School and manages Corporate Affairs at Brocade Communication Systems, Inc. Jeff’s passions include: corporate responsibility, employee engagement, leadership, ethics and human resources – being a father, partner & lifelong learner.


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  • http://www.facebook.com/people/Margaret-L-Greene/771200272 Margaret L Greene

    I enjoyed this article. This is the kind of analysis that should be applied to every industrial undertaking. For example, if it had been applied to making ethanol from corn, that mistake could have been avoided.

    This country needs to change its mind set. Industry can use facilities like the National Center for Supercomputing Applications (NCSA) at the University of Illinois to help us build sound industries that manage and extend our natural resources without creating new problems for the environment.

    Above all, in our rush to conquer emissions and provide new sources of energy, we must protect our potable water supplies.

    Good job, Mr. Rangel.

    • Jeff Rangel

      Thanks Margaret for your comment. I’ve written before but this is my first 3P post. So important to consider cost/benefit and risk of unintended consequences in any undertaking. For me, there is always a bit of a stuggle between “simple living” and technology – but that’s why I specifically included the word “responsible” in my post. I’ll look forward to reading more about NCSA.

  • Matt Schnackenberg

    With storage space, processor speed, processor efficiency, ram efficiency, and ram size data centers will grow but eventually start shrinking in terms of power use and space requirements every time their servers get upgrades. Technology always improves year over year.

    • Jeff Rangel

      Thanks for your comment Matt. Agree that YoY improvements in technology will alter the landscape. There is similar data that energy use is actually lower than some earlier predictions (Koomey’s 2007/2008 work for example). The ball is alwasy moving – and hopefully forward.