Data center costs and other (lost) details

A new survey indicates organizations don’t really know the detailed cost breakdowns of their data centers.

A new IT study found that the majority of organizations did not have a detailed breakdown of costs for their data centers. A majority as in 72 percent. A detailed breakdown of costs as in how much money they are spending on power, facilities, hardware, software, storage staffing, maintenance, etc.

I don’t know about you all, but that surprises me.

The study, “A Peep Into Data Center Economics -- Analyzing Challenges & Opportunities,” was conducted by Indian IT services provider Wipro Technologies and Outsourcing Center, an online site that provides articles, insights and other resources and is part of the Alsbridge Company. The survey interviewed 75 CIOs and heads of IT from Fortune 1000 companies across the United States, Europe and APAC and focused on gleaning insigts about the current state of their organizations’ data centers and better understand their the attitudes and challenges towards data center optimization. The participants represent a range of industries including retail, financial services, transportation/logistics, manufacturing, healthcare and telecommunications.

So on to the findings. Again, nearly three-fourths of all the participants said they don’t know the detailed cost breakdown of each data center. And most only know portions of the costs, not the whole cost picture. In the report, Rajan Sampath, Wipro’s head of data center transformation services, says he doesn’t think it is surprising that organizations don’t know. Maybe it isn’t. But clearly the information is something they should know, as Sampath astutely points out. “If these organizations don’t know where the costs are going, how can they know where to invest money to make improvements in efficiency? It’s likely that these organizations have been spending money on things that are less critical or important,” he said, in the report.

By the way, a little less than a third (31 percent) said their current data center costs are worrisome for their business. Nearly half, or 44 percent, said that data center costs were not a concern for them! Survey participants that did have a handle on their data center costs said their biggest costs were related to the facility itself – building allocations, for instance.

Of course, you’d think the organizations would make it a priority to know cost details. After all, 53 percent said they believe a data center strategy impacts their business. I would think anything that impacts business would be important enough to analyze and understand, particularly regarding costs, particularly in this day and age. Interestingly, 16 percent said such a strategy had no impact on their organization. Now, 16 percent may be small, but still! Also interestingly, respondents from the manufacturing industry did not feel that a data center strategy had the potential to impact their business, while representatives from other verticals either believed that such a strategy either clearly impacted their business – or possibly had an impact.

The survey also found that a lack of measurable return-on-investment (ROI) is holding organizations back from moving to alternate data center management models. A majority cited lack of measurable ROI as a challenge they face in moving to alternative data management models. Of course, the report points out, since most don’t know cost details, it can be tricky to determine whether or not alternative models are benefitting them in terms of cost. Another challenge in moving to alternate data center management models include resistance to cultural change within the organization and a lack of employees with necessary skillsets. Security and privacy also played a part, with 29% identifying data security as an issue, and 2t percent citing privacy concerns.

By the way, of the survey participants, most from multiple data centers but owned fewer than half of their data centers. According to survey, a majority of organizations currently operate from more than just one or two data centers: 42 percent said they operate from three, four or five data centers, while 13 percent said they operate from more than 20 data centers. More than half of survey participants (56 percent) said that they owned fewer than half of their data centers.

I’d love to hear how you all stack up compared to these survey participants. How many data centers do you operate from? Do you own them? Are you well aware of the details of your data center costs? Are you looking at new data center models? If no, why not? What’s holding you back?

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