Posted by: Greg Ness | February 6, 2011

The Cloud and the New Economics of Electricity

Having just read Google’s Schmidt’s Telegraph interview on the future of computing, one cannot help noticing the ripple effects of Moore’s Law now being played out on a grander scale:

“Now, the math of that is interesting,” he says. “Doubling every 18 months is roughly a factor of 10 in five years. In 10 years that’s a factor of 100. In 25 years it’s roughly a factor of 100,000.

“So when you go back and you look at things 15 years or 10 years ago, understand that we were operating in the context of 1,000 times less computation, thinking, networking, data analysis – we just couldn’t do it.”

Eric Schmidt in the London Telegraph, Feb 6, 2011

According to a 2009 Ars Technica article as servers get more powerful electricity becomes a more critical cost factor.  As we move to more powerful blade servers and virtualization and cloud, what happens to all of those data centers built more than say 5 years ago?  And what happens to enterprises experiencing post meltdown “capital crunch” who are trying to migrate from less powerful legacy gear into denser environments?

Brazil amassed massive debt decades ago to build out a hydro infrastructure when oil prices started rising.  Some enterprises may end up in similar shape as they mortgage their futures in order to keep up with IT innovation, only to emerge years later as beneficiaries of their sacrifices.

“Jonathan Koomey, who’s affiliated with LBL and Stanford, said that power use by US datacenters doubled between 2000 and 2005, despite the fact that the period saw the dot com bust. Uptime’s Kenneth Brill told the audience that, currently, the four-year cost of a server’s electricity is typically the same as the cost for the server itself, while John Haas of Intel said that 2010 is likely to be the point where the electricity costs of a server over its lifetime will pass the price of the hardware.”

John Timmer, Ars Technica, October 1, 2009

I think it is now fair to suggest that we’re now entering an age where the data center facility (and its energy efficiency [and vertical scalability]) will become as strategic to enterprise IT as the gear it contains.  It is the delivery mechanism for power and cooling to the infrastructure.  Attendees to the last Gartner Data Center conference had the opportunity to see Gartner VP David Cappuccio talk about a new generation of “extreme” data centers.  I think he’s right.

A few days ago Data Center Knowledge’s Kevin Normandeau also addressed energy efficiency and its relationship to server expense:

“Currently, the typical 3-year cost (operating expenses + amortized capital expenses) of powering and cooling servers is approximately 1.5 times the cost of the server hardware itself, and the projections for 2012 go much higher. Energy efficiency measures are thus of high importance for data center designers, operators, and owners.”

Kevin Normandeau, Data Center Knowledge, February 4, 2011

True, we have more domestic options for producing electricity than we did for oil during the energy crisis, but are we not on the same road today as we watch every new generation of more powerful servers appear, more devices communicating with servers than hard drives (see recent Boom forecast of 180 million tablet PCs ( by 2014) in GigaOM), and the rise of a new generation of gaming, social media business models fueling incredible growth?

Perhaps the economics of alternative energies could be enhanced by demands for more energy needed to fuel ever more powerful business models? This assumes that electricity will be able to scale as fast as data center energy demand does.  Perhaps we’ll experience a few bumps along the road yet again.

You can follow my rants in real time at



  1. I’d be keen on opening a dialog on this. Suggest a couple of dates and I’ll match one. Perhaps we might also explore how we might complement our endeavors.


  2. […] This post was mentioned on Twitter by Randy Bias, Joe Williams, Michael Stanton, Electricity Savings, Affiliates and others. Affiliates said: The Cloud and the New Economics of Electricity « ARCHIMEDIUS […]

  3. […] Pro Tweets The Cloud and the New Economics of Electricity randybias – Sun 06 Feb 5:48 previous […]

  4. […] Ness has a great posting about the “new” economics of the data center, especially around electricity. In it, he […]

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s


%d bloggers like this: