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![Modern businesses can’t succeed
without IT
5
Brynjolfsson, Erik, and Andrew McAffee. 2014. The Second Machine Age: Work, Progress, and
Prosperity in a Time of Brilliant Technologies. New York, NY: W. W. Norton & Company. [http://
amzn.to/1gYHEGk]
Copyright
Jonathan
G.
Koomey
2014](https://image.slidesharecdn.com/koomey-dcd-movingitintothe21stcenturydinnertalk-v2-141122101747-conversion-gate01/85/Bringing-data-center-management-and-technology-into-the-21st-Century-5-320.jpg)
![A case study of a company that has been successful at tying
its IT performance to business performance
Schuetz, Nicole, Anna Kovaleva, and Jonathan Koomey. 2013.
eBay: A Case Study of Organizational Change Underlying
Technical Infrastructure Optimization. Stanford, CA: Steyer-Taylor
Center for Energy Policy and Finance, Stanford University.
September 26. [http://www.mediafire.com/view/8ema554a2ho9ifj/
Stanford_eBay_Case_Study-_FINAL-130926.pdf]
Copyright
Jonathan
G.
Koomey
2014
25](https://image.slidesharecdn.com/koomey-dcd-movingitintothe21stcenturydinnertalk-v2-141122101747-conversion-gate01/85/Bringing-data-center-management-and-technology-into-the-21st-Century-25-320.jpg)
Uploaded byJonathan Koomey
Bringing data center management and technology into the 21st Century
The document discusses how to modernize data center management and tie IT performance to business goals. It argues that most companies cannot answer basic questions about their IT infrastructure and servers. The presentation recommends that management focus on three key actions: 1) tie IT metrics like costs and utilization to business metrics to drive organizational change; 2) consolidate IT management under one leader and budget; and 3) use IT to transform IT through standardization, cloud computing, and computer modeling to optimize infrastructure performance and costs. The goal is to make IT a cost-reducing profit center that improves business and environmental outcomes.
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Bringing data center management and technology into the 21st Century
- 1. Bringing data center management and technology into the 21st century Jonathan Koomey, Ph.D. Research Fellow, Steyer-Taylor Center for Energy Policy and Finance, Stanford University http://www.koomey.com Presented at DCD Converged London, UK November 19, 2014 Copyright Jonathan G. Koomey 2014 1
- 2. Can you answerthese key management questions? • How many servers do you have? • How many of the servers are comatose? • What is the average utilization for those that aren’t comatose? • Do you track costs and benefits from data center operations each year? – Total? – At the business unit level? – At the project level? Copyright Jonathan G. Koomey 2014 2
- 3. Most companies can’t! Copyright Jonathan G. Koomey 2014 3
- 4. What do executivesneed to know about information technology (IT)? Copyright Jonathan G. Koomey 2014 4
- 5. Modern businesses can’tsucceed without IT 5 Brynjolfsson, Erik, and Andrew McAffee. 2014. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, NY: W. W. Norton & Company. [http:// amzn.to/1gYHEGk] Copyright Jonathan G. Koomey 2014
- 6. However… Copyright Jonathan G. Koomey 2014 6
- 7. IT is almostinvariably fragmented and divorced from business performance Only management can fix that Copyright Jonathan G. Koomey 2014 7
- 8. Almost all enterprisedata centers are paragons of inefficiency, but management doesn’t know it, so they don’t fix it. Copyright Jonathan G. Koomey 2014 8
- 9. Inefficient IT increasescosts, decreases revenues, AND reduces the rate of innovation Copyright Jonathan G. Koomey 2014 9
- 10. What can managementdo? Copyright Jonathan G. Koomey 2014 10
- 11. I. Tie ITperformance to business performance Copyright Jonathan G. Koomey 2014 11
- 12. How? Copyright Jonathan G. Koomey 2014 12
- 13. Metrics! Copyright Jonathan G. Koomey 2014 13
- 14. Creating the rightmetrics is not as easy as it sounds Copyright Jonathan G. Koomey 2014 14
- 15. How far areyou from this? Copyright Jonathan G. Koomey 2014 15 Profits Computation = (Revenues - Costs)/Computations
- 16. Complexities • Someparts of IT are really cost centers, but some generate revenues • Hard work needed to build up to revenues and costs/computation – Activity based costing (Romonet) – Detailed cost and inventory modeling (Apptio) – Server based inventory and operations (DCIM) • Computations – first order estimate = utilization * GHz * secs/year (good enough to start) Copyright Jonathan G. Koomey 2014 16
- 17. Metrics drive organizationalchange • Focus on the whole system – reducing total costs per computation – increasing total value from computation • “Show back” the consequences of choices to every employee, then “charge back” if needed • Key Performance Indicators (KPIs) for management include both costs AND benefits Copyright Jonathan G. Koomey 2014 17
- 18. You need amodel of costs and revenues that tracks all components in the data center over time! Copyright Jonathan G. Koomey 2014 18
- 19. II. One boss,one team, one budget! Copyright Jonathan G. Koomey 2014 19
- 20. III. Use ITto transform IT • Standardized IT deployments • Move from “sit down restaurant” to “buffet style” IT • Move many users to internal or external cloud • Software should matter more, hardware less • Measure, experiment, learn, and replicate • Use computer modeling to anticipate effects on cooling/power of Δs in existing facilities Copyright Jonathan G. Koomey 2014 20
- 21. Conclusions • Whatmanagement can do – I. Drive institutional change using metrics that tie IT performance to business performance – II. One boss, one team, one budget – III. Use IT to transform IT • Summary: Make IT serve the business! Copyright Jonathan G. Koomey 2014 21
- 22. IT should NOTbe treated as a cost center, it should be a cost reducing profit center that also improves corporate and customer environmental performance Copyright Jonathan G. Koomey 2014 22
- 23. For more detailson the ongoing (Nov 10 to Dec 12, 2014) online class titled Data Center Essentials for Executives, see http://goo.gl/K4kJG2 Also see my 2014 article titled Bringing Enterprise Computing into the 21st Century: A Management and Sustainability Challenge http://goo.gl/WYFBjb Copyright Jonathan G. Koomey 2014 23
- 24. Watch Dean Nelson(eBay) talk about how companies can turn IT into a profit center (35 mins): https://www.youtube.com/watch? v=h6NJpHgReE8&feature=youtu.be Copyright Jonathan G. Koomey 2014 24
- 25. A case studyof a company that has been successful at tying its IT performance to business performance Schuetz, Nicole, Anna Kovaleva, and Jonathan Koomey. 2013. eBay: A Case Study of Organizational Change Underlying Technical Infrastructure Optimization. Stanford, CA: Steyer-Taylor Center for Energy Policy and Finance, Stanford University. September 26. [http://www.mediafire.com/view/8ema554a2ho9ifj/ Stanford_eBay_Case_Study-_FINAL-130926.pdf] Copyright Jonathan G. Koomey 2014 25