Will higher electricity prices fuel virtualization?

TORONTO – The day may come when customers pay for electricity separately from their data centre space, according to Dave Dobbin, president of Toronto Hydro Telecom Inc., which runs fibre optic networks throughout Toronto.

Dobbin was part of a panel that discussed return on investment and the business benefits of running a virtual environment at the forum on virtualization hosted by Toronto-based IDC Canada held here late Tuesday afternoon.

The company, which offers co-location services through its data centre, is a strong advocate for virtualization. As the cost of electricity increases, the way server farms are being deployed is becoming problematic.

“This summer we had fewer hot days in Toronto, but consumed 2,000 mega-watts more than our system is capable of carrying,” said Dobbin. This meant the company had to import mega-watts from New York, at a cost of up to $1 per hour.

One of its customers wanted 10 mega-watts in one rack. “That’s enough for a small apartment,” said Dobbin.

And this kind of power consumption is going to become a big issue for everybody, he said, because it will cause the business model to change as the price of electricity fluctuates. One possible scenario is that companies will buy data centre space, but pay for electricity separately – which means they’ll rent space and try to jam as much as possible into it.

This is one argument for virtualization, which can move server farms into a virtual environment, cutting down on hardware and automating business processes.

For those who have yet to be convinced, Ian Penny, director of strategy and architecture with Pfizer Inc., said companies have to look at virtualization over a three- to five-year period. “Virtualization is a strategy, not a product,” he said. “There does come a point when you just run out of data centre space or, more likely, you run out of power.”

Pfizer had a “burning platform for change,” he said. The choice was to spend its money maintaining what it already had or spend it on more strategic investments.

The pharmaceutical company began its virtualization strategy three years ago and now 10 per cent of its Intel server fleet is virtualized. It plans to grow this to 30 per cent over the next two years.

In a virtual environment, the company can buy servers on a farm-to-farm basis (100 virtual machines make up one farm). “If you have to go through hardware procurement, that’s highly problematic,” said Penny. Now servers can be provisioned up front, so there’s no mad scramble when a business unit firms up its requirements. “That’s a non-issue,” he said.

For PricewaterhouseCoopers, it was costing $1,000 to $2,000 just to get maintenance done on a server. The firm decided to pursue a virtualization strategy to consolidate some 50 to 60 servers across the country and ultimately reduce costs.

“The problem was management delegation,” said Frank Boesche, manager of technology infrastructure and operations with PricewaterhouseCoopers MSLP. The firm upgraded its infrastructure and cut back on the number of servers it was using, bringing them into a virtual environment. “Each office got the same infrastructure,” he said. “We could actually lock down servers the way we wanted to.”

Companies should start with a strategy and look at it from all angles, he said. Are you looking at saving money or do you want to improve operations? Look at it three to five years down the road, considering both hard and soft cost savings.

His IT team sold virtualization to upper management as a benefit to operations, such as speeding time to market – but also one that would improve security and compliance.

Comment: info@itbusiness.ca

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