Calculating Power as a Cost Component

James Hamilton from Microsoft has put together an interesting analysis of power costs as a component of overall data center expenses. James makes the point that electric power is often described as the number one cost in a modern mega-data center, but actually trails servers and the power and cooling infrastructure in the overall percentage of monthly data center costs.

But he also provides a broader context for the hard numbers, defining the “fully burdened cost of power” as the sum of the cost of the power consumed and the cost of both the cooling and power distribution infrastructure: “Since power and infrastructure costs continue to rise while the cost of servers measured in work done per $ continues to fall, it actually is correct to say that the fully burdened cost of power does, or soon will, dominate all other data center costs,” James writes.

James has shared the Excel spreadsheet he used for his calculations, so you can plug in your own numbers. His analysis is also being discussed at O’Reilly Radar.

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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  1. This is a really interesting issue, and definitely something that garners this kind of cost analysis. In my experience, I've found that a lot of businesses are confused by these cost figures. The most important takeaway is James' conclusion that the fully burdened cost of power does, or soon will, dominate all other data center costs. So while servers right now may represent the largest datacenter cost, businesses need to look at how they can improve the other side of the equation. James also writes that "power distribution costs are functionally related to power." In other words, if you find a way to increase power distribution efficiency, you will decrease power costs (and subsequently decrease cooling needs). This is exactly why DC power distribution is more important than ever in the datacenter. Quite simply, because of the 5 conversions (AC to DC) and transformations (higher voltage to lower voltage) in an AC powered datacenter compared to 2 in a DC powered environment, DC power distribution equates to roughly 25% to 50% better efficiency end-to-end compared to legacy AC architectures, and up to a 50% lower total cost of ownership (lower power and cooling costs, less equipment, greater reliability). With issues like energy efficiency and power costs only expected to rise in coming years, compounded with a weakening economy that leaves businesses tightly scrutinizing their bottom line, these are the kinds of vast efficiency and cost differences that are hard to ignore.