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SEC ruling could spur data center change

The Securities and Exchange Commission recently clarified data center reporting requirements for current and future climate change regulation, which could spur behavioral change among data center managers.

As if data center pros didn't have enough to worry about, a recent Securities and Exchange Commission ruling could affect how they do their jobs.

In February the Securities and Exchange Commission published a ruling on climate change that clarified reporting requirements it expects public companies to make regarding climate change legislation.

For more on data center energy efficiency:
Understanding green IT and data center energy efficiency regulations

The top 2010 data center trends

The Obama effect on IT operations

The SEC says that there has already been significant federal and state regulation around climate change. One example is the Environmental Protection Agency's requirement starting this year that large producers of greenhouse gases must collect and report data on their greenhouse gas emissions.

The ruling also indicates there will likely be more climate change legislation, such as a carbon cap-and-trade or tax program. Those changes could affect a company's financial performance, and the SEC wants to ensure companies are aware of the reporting requirements.

Though it's still early, data centers have begun to prep for climate change legislation.

"[We just want] to make sure that we're not caught off-guard as an industry," said Chris Crosby, senior vice president at giant data center real estate company Digital Realty Trust. "If the broad brush on carbon emissions comes into play, it's going to affect everyone."

Making data center energy efficiency matter
The data center industry must stay in front of the issue and work to differentiate itself from other industries, Crosby said. Along that line, data center leaders have discussed forming a data center lobbying organization to make their case.

"I think in all these cases, data centers get into this broad swath and grouped with smelting plants," he said. "We need to promote the positive impact that IT has from a holistic perspective. If I don't have to drive to the bank because I have online banking, what is the benefit there?"

The biggest impact [of the SEC ruling] is [that] ... it will make upper management pay attention to climate change-related risks.
John Stanley,
research analystthe 451 Group

John Stanley, a research analyst at the 451 Group, recently wrote about the possible effect of the SEC ruling on data centers.

"I think the biggest impact is going to be that it will make upper management pay attention to climate change-related risks in a way that maybe they didn't before," Stanley said. In the past, it has been facilities managers who were concerned about electricity prices.

But climate change legislation might create higher energy costs. Along with the recent SEC ruling, the trend could make corporate executives watch companywide energy use more closely.

The Uptime Institute recently found that data center energy use accounts for a large chunk of a company's total energy consumption. For one financial company, data centers consumed one-third of the company's total energy consumption.

With that in mind, Stanley suggested data center managers (1) become more energy efficient; and (2) become able to justify the business case of certain inefficiencies.

The latter task could be tough. A corporate executive might look at a data center from a nontechnical point of view, see a bunch of redundant equipment, and deem that it needs to be shut off. But that equipment might be important to data center uptime and meeting business service-level agreements.

"Data center managers needs to say, here are places where we do use energy, and here is why it's important to spend energy here even though it looks like waste," Stanley said.

Some companies already do that, in part to save money on energy, and in anticipation of regulations. Ron Pepin, the VP and general manager of data center operations at Pittsburgh-based PNC Financial Services uses tools such as HP OpenView and Nlyte Software to decommission unused or underutilized servers and automatically calculate power usage effectiveness, or PUE to be more energy efficient.

In his view, the government will probably require businesses to show that their data center operations have become more energy efficient. "The EPA's report to Congress was just the first step. So eventually, yes, there will be some kind of regulation coming out. That's why the first step for me is to measure what I'm doing now," Pepin said.

Mark Fontecchio can be reached at

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