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Data Center Power Pricing - Open Spectrum Inc - Sean Patrick Tario - DeltaForce IT

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Data Center Power Pricing - Open Spectrum Inc - Sean Patrick Tario - DeltaForce IT …

Data Center Power Pricing - Open Spectrum Inc - Sean Patrick Tario - DeltaForce IT

How Different Kw/Hr Pricing Is Impacting Regional Demand - Who Wins, Loses and Why?

Sean Patrick Tario
www.linkedin.com/in/seanpatricktario
• Seasoned IT professional and entrepreneur. Worked with dozens of start-ups and scaling companies as a general adviser, director, consultant, investor and award winning sales producer
• Currently serves as the CEO of both Open Spectrum Inc., a global IT Infrastructure consulting firm, and DeltaForceIT, which provides tactical sales training for those working within the data center and hosting industries
• Personally negotiated and closed over 100 data center and hosting deals within the past 3 years with over 60 clients and 30 different service providers around the world.
• Intimately familiar with both retail and wholesale data center markets within North America, Europe and Australia

Power Matters
• Sophisticated buyers of retail and wholesale data center space are concerned about:
– Who owns the power grid
– Ratios of Import vs. Export
– Ratios of Power Source
– Rate fluctuations per kw/hour over time – Subsidies Available
– Stability and Priority of Local Sub-Stations

Demand Implications
• DO THE MATH!
– 1 Megawatt in Quincy, WA costs
$21.90 x 1,000 = $21,900/month
– 1 Megawatt in Santa Clara, CA costs $73 x 1,000 = $73,000/month -$613,000 annual savings
• Substantialsavingsforbothowner/operatorsAND clients within regions with utility providers who generate their own power.
Demand Implications
• Taking into consideration PUE, savings are even higher.
• As Retail providers build facilities and provide fully managed services in regions with lower power costs, BIG DATA will migrate (and is migrating) away from the major hubs.
• Cost of living is also much lower in regions with lower power costs.
Fracking, Solar, Wind... Greenwashing
• “Green” power is mostly an illusion and requires user pay a premium
• Private Power Grid Owners are not incentivized to reduce their total cost of delivering services to their consumers... so even if they CAN they likely will not
• Cost is extremely high and timeframes to roll out new energy programs are extremely high
Impact, Ramifications and Timing
• Mostly corporate owned data centers currently built in these low cost regions NOW
– Facebook, Google, Microsoft, Intuit, Yahoo, etc.
• Sabey and Viawest as an example of private
retail and wholesale providers who “get it”
• I know of NO publicly traded data center providers who currently “get it” because, “...2nd and 3rd tier markets are not a priority”

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  • 1. Data  Center  Power  Pricing
 How  Different  Kw/Hr  Pricing  Is   Impacting  Regional  Demand  -­‐             Who  Wins,  Loses  and  Why?   ! Sean  Patrick  Tario,  CEO
  • 2. Sean  Patrick  Tario   www.linkedin.com/in/seanpatricktario • Seasoned  IT  professional  and  entrepreneur.  Worked  with   dozens  of  start-­‐ups  and  scaling  companies  as  a  general  adviser,   director,  consultant,  investor  and  award  winning  sales   producer   • Currently  serves  as  the  CEO  of  both  Open  Spectrum  Inc.,  a   global  IT  Infrastructure  consulting  firm,  and  DeltaForceIT,   which  provides  tactical  sales  training  for  those  working  within   the  data  center  and  hosting  industries   • Personally  negotiated  and  closed  over  100  data  center  and   hosting  deals  within  the  past  3  years  with  over  60  clients  and   30  different  service  providers  around  the  world.   • Intimately  familiar  with  both  retail  and  wholesale  data  center   markets  within  North  America,  Europe  and  Australia
  • 3. Power  Matters • Sophisticated  buyers  of  retail  and  wholesale   data  center  space  are  concerned  about:   – Who  owns  the  power  grid   – Ratios  of  Import  vs.  Export   – Ratios  of  Power  Source   – Rate  fluctuations  per  kw/hour  over  time   – Subsidies  Available   – Stability  and  Priority  of  Local  Sub-­‐Stations
  • 4. Power  Pricing  by  Region
 (cost  per  kw/hour) Region Avg.  Cost Region Avg.  Cost North  Bay  Area,  CA $0.12 Denver,  CO $0.07 South  Bay  Area,  CA $0.10 Dallas,  TX $0.07 Sacramento,  CA $0.10 Austin,  TX $0.06 Los  Angeles,  CA $0.12 Chicago,  IL $0.07 Seattle,  WA $0.06 Philadelphia,  PA $0.10 Quincy,  WA $0.03 Miami,  FL $0.08 Portland,  OR $0.07 Atlanta,  GA $0.06 Las  Vegas,  NV $0.08 Richmond,  VA $0.06 Pheonix,  AZ $0.06 NYC,  NY $0.18 Salt  Lake  City,  UT $0.05 Secaucus,  NJ $0.12
  • 5. Power  Pricing  by  Region
 (cost  per  kw  per  month) Region Avg.  Cost Region Avg.  Cost North  Bay  Area,  CA $87.60 Denver,  CO $51.10 South  Bay  Area,  CA $73.00 Dallas,  TX $51.10 Sacramento,  CA $73.00 Austin,  TX $43.80 Los  Angeles,  CA $87.60 Chicago,  IL $51.10 Seattle,  WA $43.80 Philadelphia,  PA $73.00 Quincy,  WA $21.90 Miami,  FL $58.40 Portland,  OR $51.10 Atlanta,  GA $43.80 Las  Vegas,  NV $58.40 Richmond,  VA $43.80 Pheonix,  AZ $43.80 NYC,  NY $131.40 Salt  Lake  City,  UT $36.50 Secaucus,  NJ $87.60
  • 6. Demand  Implications • DO  THE  MATH!   – 1  Megawatt  in  Quincy,  WA  costs     $21.90  x  1,000  =  $21,900/month   – 1  Megawatt  in  Santa  Clara,  CA  costs   $73  x  1,000  =  $73,000/month   -­‐$613,000  annual  savings   • Substantial  savings  for  both  owner/operators  AND   clients  within  regions  with  utility  providers  who   generate  their  own  power.
  • 7. Demand  Implications • Taking  into  consideration  PUE,  savings  are  even   higher.   • As  Retail  providers  build  facilities  and  provide   fully  managed  services  in  regions  with  lower   power  costs,  BIG  DATA  will  migrate  (and  is   migrating)  away  from  the  major  hubs.   • Cost  of  living  is  also  much  lower  in  regions  with   lower  power  costs.
  • 8. Fracking,  Solar,  Wind…  Greenwashing • “Green”  power  is  mostly  an  illusion  and   requires  user  pay  a  premium   • Private  Power  Grid  Owners  are  not  incentivized   to  reduce  their  total  cost  of  delivering  services   to  their  consumers…  so  even  if  they  CAN  they   likely  will  not   • Cost  is  extremely  high  and  timeframes  to  roll   out  new  energy  programs  are  extremely  high
  • 9. Impact,  Ramifications  and  Timing • Mostly  corporate  owned  data  centers  currently   built  in  these  low  cost  regions  NOW   – Facebook,  Google,  Microsoft,  Intuit,  Yahoo,  etc.   • Sabey  and  Viawest  as  an  example  of  private   retail  and  wholesale  providers  who  “get  it”   • I  know  of  NO  publicly  traded  data  center   providers  who  currently  “get  it”  because,  “…2nd   and  3rd  tier  markets  are  not  a  priority”

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