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Bryce Olson
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First there was the Multi-Billion Dollar Automobile “Cash for Clunkers” program that I wrote about back in early August. Then in late August we started reading more about the planned $300M state-run rebate programs for consumer purchases of new ENERGY STAR® qualified home appliances. Appliance categories eligible for rebates include: central air conditioners, heat pumps (air source and geothermal), boilers, furnaces (oil and gas), room air conditioners, clothes washers, dishwashers, freezers, refrigerators, and water heaters.

The government wants to make cars and homes more energy efficient, while helping to support the nation’s economic recovery.  But what about making Data Centers more efficient?

A couple of years ago the US Environmental Protection Agency reported that the energy consumption associated with data centers had doubled between 2000 and 2006, reaching some 60 billion kWh in 2006, roughly 1.5% of the entire US energy use. The EPA says this is expected to double again by 2010.  The same authors of that report previously calculated that US servers currently use the same level of electricity as all color TVs in the country combined. 

So this got me thinking…which industries have done the most to increase output per energy unit and which products also offer the most attractive paybacks when you invest in them.  The findings were interesting to say the least.  Let’s first look at the sectors creating more energy-efficient products over the last 30 years*.

  • Autos – 1978 (14.3 MPG), 2008 (20 MPG): Energy Efficiency gains = 40%
  • Airlines – 1978 (22.8 Revenue passenger MPG), 2008 (50.4): Energy Efficiency gains = 121%
  • Agriculture – 1978 (0.63 units of output per unit of energy use), 2008 (1.46): Energy Efficiency gains = 132%
  • Steel Mfg – 1978 (63 lbs of steel per MBtu), 2008 (167 lbs): Energy Efficiency gains = 167%
  • Lighting – 1978 (Incandescent light bulb – 13 lumens per watt), 2008 (Compact Fluorescent Bulb – 57 lumens per watt): Energy Efficiency gains = 339%
  • Computer Systems – 1978 (1,400 instructions per second per watt), 2008 (40,000,000 instructions per second per watt): Energy Efficiency gains = 2,857,000%

*Source:  “A Smarter Shade of Green,” ACEEE Report for the Technology CEO Council, 2008.

Next let’s look at some big ticket energy efficient products that offer the most attractive paybacks on their investments. (Note: Buying a hybrid automobile wouldn’t make this list below in terms of rapid payback, hence not included.)

IT industry far exceeds others at increasing output per energy unit… and Intel servers also offer a faster payback on investment than other energy efficient products (including Energy Star Products).  Yet there is not government stimulus package to help encourage these purchases in energy efficiency. Simply, this is the most energy efficient investment that the government won’t help you make.

I would be curious to hear what you think.

bryce

0 Comments Permalink Tags: data_center, eco-technology, energy_efficiency, nehalem, datacenter, efficiency, servers, xeon_5500, payback, energy_star, roi, intel, government_stimulus, datacenter_efficiency, server, cash_for_clunkers
Bryce Olson
2

You’ve seen it on the front pages of the papers lately.  The program that offers consumers incentives to trade in older used cars for more fuel-efficient new cars is pushing auto sales into overdrive.  The $1B in govt. funding for it was burned through in less than a week. The U.S. House of Representatives rushed through an additional $2B in emergency funds just to keep the program going, but will need Senate approval if it’s going to extend beyond Tuesday August 4th. My guess is to make a continuation of the program palatable to the U.S. taxpayer, the incentive will need to be cut (from $4500 for a new fuel-efficient car to somewhere in the $1-2k range) but it’s great to seen people buying cars and stimulating part of the economy – while getting older fuel-inefficient cars off the roads.

 

I saw an interesting article talking about whether a similar program for servers would work…and though I think it’s a creative idea, I’ll argue that Intel and our OEM partners have been offering “Cash for Clunkers” for quite some time now – without any U.S. taxpayer help.  How? Through promoting the benefits of server refresh, a strategy that is proving to be one of the most beneficial investments to IT and business. Using the Xeon ROI Estimator I spent 2-3 minutes modeling potential savings by comparing 4-year old 2P Intel Xeon based servers to new 2P Intel Xeon 5500 based servers – and this is what I found:

 

An investment in one Intel Xeon 5500 based server (~$8.5k including purchase price, migration cost, and software validation) enables up to 10x performance per server, a 10:1 server consolidation opportunity vs. 10 older servers purchased 4 years ago that as an IT manager I can now get rid of.  So where’s the cash for the clunkers? Well, I would save over $4k a year in energy costs and over $11k a year in server / software maintenance costs by cutting out the old and putting in the new.  The 4-year total savings is about $38k, with a break even period of about 9 months. Not bad…and that doesn’t even take into consideration software licensing costs that I probably can save by cutting down the server count. Try modeling this yourself and check out the new PowerPoint report that you can generate from it – really explains the benefits in a way that the finance and facilities folks will find useful.

 

I also found this link that explains why Intel IT decided to move ahead with server refresh in 2009 after current economic conditions forced Intel to re-evaluate the strategy. Analysis found that delaying server refresh for a year would increase costs by USD 19 million.

 

And a refresh strategy also applies to the bigger 4 Socket and above servers as well, as documented in this server refresh brief. 

Server Refresh is a strategic investment for IT – the cash for clunkers program that keeps on giving.

 

bryce

 

 

 

2 Comments Permalink Tags: datacenter, datacenter_efficiency, dunnington, xeon_5500, cash_for_clunkers, nehalem, data_center, energy_efficiency, performance, server, server_refresh, server_room, roi

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