Data center host credits virtualization for power surplus

Data center host 365 Main has excess power capacity because of its virtualization efforts and an incentive program through Pacific Gas and Electric.

Data center operator 365 Main Inc. says that its San Francisco facility has power to burn. For the first time since 2006, 365 Main has surplus power, thanks to its participation in the virtualization incentive program from Pacific Gas & Electric (PG&E).

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Just having power capacity to spare is newsworthy, and it speaks volumes about today's data center challenges. Most data centers are under intense pressure to reduce power consumption and stay within existing facilities' power envelopes while also contending with fast growth.

Indeed, last year, 82% of the 1,600 respondents surveyed in Symantec's State of the Data Center Report 2008 said that over the next 12 months power costs will account for the largest cost increase in their budget. And in the Data Center Decisions Purchasing Intentions Survey , more than one-third of the 660 data center managers and administrators surveyed said they received more money in their virtualization budget in order to free up power and cooling. Another 30% said their virtualization budget had been padded because they had run out of floor space for physical servers.

Virtualization pays
In 2006, northern California's utility provider, PG&E, launched an incentive program to promote energy efficiency in data centers that use virtualization. PG&E promotes the use of virtualization because it allows customers to consolidate physical servers, which increases utilization and reduces overall energy consumption.

We now have capacity to sell for the first time in two years.
Miles Kelly,
VP, marketing and strategy365 Main Inc.

PG&E pays incentives based on the annual accrued energy savings at the rate of 8 cents per kilowatt-hour (kWh). Based on typical x 86 server power use, incentives average around $200 per server removed, up to a maximum of 50% of the virtualization project implementation cost.

"Due to our customers' virtualization efforts, we have had a reduction in energy usage," said Miles Kelly, the vice president, marketing and strategy for 365 Main. "Since those customers need less power than they did before, we now have capacity to sell for the first time in two years."

The data center provider, which has the largest power feed in the city of San Francisco, also participates in PG&E's Critical Peak Pricing (CPP) program, which pays companies that reduce their energy consumption during the summer when power use spikes dangerously high. Through CPP, 365 Main  has reported saving $70,000 in utility costs in 2006 and $54,000 in 2007, which amounts to 7,477 kWh.

But not all 365 Main's newfound power capacity comes from virtualization-related efforts and the CCP program: Some comes from two high-growth customers that moved to a larger 365 Main facility in Oakland, Calif. That said, several of 365 Main's 200 customers in San Francisco showed interest in the virtualization incentive program last year and are expected to participate in the program this year. That would free up even more power, Kelly said.

The lopsided power equation
In the San Francisco Bay area, the newly available capacity is much needed. Industry analyst firm Tier 1 Research (T1R) recently named the top data center market in the United States. In its yearly supply and demand report published in late 2008, New York-based T1R found that data centers in the region were on average 70% full and, by 2012, utilization was expected to reach 95%. The firm predicted that over the next four years, demand in the region will grow at 15% to 18% per year, while supply will grow at only 6% to 9% annually.

With the lopsided supply and demand numbers, most data center hosts, including 365 Main, charge tenants based on the amount of power they use; a model that Kelly said dates back to 2006, when a facility's total power draw became more important than the amount of floor space used.

"If you are an enterprise customer that has not virtualized yet, and you are in a [colocation] facility, you can see up to a 20% savings by virtualizing," Kelly said.

But most companies quickly use the capacity they spare with virtualization, he said. "We have seen customers do virtualization deployments, and any headroom they create as a result of virtualizing usually becomes a growth runway, instead of a way to reduce their footprint."

Kelly would not disclose how much additional power capacity is up for grabs but said, "Now, in San Francisco, we can help both rack-by-rack customers all the way up to an estimated 400 kW … and we expect it to go quickly."

Since PG&E launched the virtualization incentive program, more than 150 companies have applied for server virtualization/consolidation projects. To qualify for the PG&E incentives, 365 Main's customers had to apply to the program before beginning the project, and make their installation available for pre- and post-inspections.

Utility companies in other states, including Massachusetts, New York, Connecticut, Florida, Ohio, Minnesota, Oregon, Texas Washington and Hawaii, have followed with similar virtualization incentive programs.

Let us know what you think about the story; email Bridget Botelho, News Writer. And check out our data center blogs: Server Farming, Mainframe Propellerhead, and Data Center Facilities Pro

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