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.
Bringing Data Center Management 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
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2. Can you answer these 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?
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G.
Koomey
2014
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4. What do executives need to
know about information
technology (IT)?
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G.
Koomey
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5. Modern businesses can’t succeed
without IT
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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]
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G.
Koomey
2014
7. IT is almost invariably
fragmented and divorced from
business performance
Only management can fix that
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G.
Koomey
2014
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8. Almost all enterprise data centers
are paragons of inefficiency, but
management doesn’t know it, so
they don’t fix it.
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G.
Koomey
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9. Inefficient IT increases costs,
decreases revenues, AND
reduces the rate of innovation
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G.
Koomey
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14. Creating the right metrics is not
as easy as it sounds
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G.
Koomey
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15. How far are you from this?
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Koomey
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Profits
Computation
= (Revenues - Costs)/Computations
16. Complexities
• Some parts 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)
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G.
Koomey
2014
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17. Metrics drive organizational change
• 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
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Jonathan
G.
Koomey
2014
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18. You need a model of costs and
revenues that tracks all
components in the data center
over time!
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Jonathan
G.
Koomey
2014
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19. II. One boss, one team, one
budget!
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G.
Koomey
2014
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20. III. Use IT to 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
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Jonathan
G.
Koomey
2014
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21. Conclusions
• What management 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!
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Jonathan
G.
Koomey
2014
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22. IT should NOT be treated as a cost
center, it should be a cost reducing
profit center that also improves
corporate and customer
environmental performance
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G.
Koomey
2014
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23. For more details on 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
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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
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G.
Koomey
2014
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25. 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]
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G.
Koomey
2014
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