Data Center

A Better Approach for Cost Justifying Data Center Technology Investment Decisions

How to Sell Your Boss on Data Center Upgrade Projects

Data center management teams support business corporate goals through the deployment and operation of technology innovation. In most cases, the data center is considered a strategic asset, the core engine block that helps to drive business growth. When data center managers are asked to justify their spending plan, however, achieving buy-in from business executives can be a challenge.

A critical success factor for gaining support of funding for data center solutions and technology upgrade projects is the ability to communicate the functions of new technologies in terms that reflect business value. Improved data center operational efficiency, resiliency, and capacity have to translate into a language that reflects cost reduction, faster delivery of business innovation or competitive advantage, and a higher return on investment.

meeting on data center solutions

Three Approaches to Justifying Data Center Investments

When selling data center innovation to business executives, focus on these three key points:

  1. Highlight the practical business benefits of the applications being supported by the technology modernization or additions being proposed. For example, in a healthcare scenario, benefits such as improved reliability, traceability, and liability management might emerge as key hot buttons. Also try to make clear what the business implications are if those applications are not supported with the new technology investment. Help them visualize the negative impact of downtime, increased latency, and/or the security risks if certain investments aren’t made. Quantify the cost of downtime for a given application, if possible, if electrical and mechanical-related investments are being considered.
  2. In the case of physical infrastructure systems such as modernizing an aging UPS or upgrading the cooling plant, promote how these innovations not only improve IT application reliability, but also drive sustainability by consuming much less energy. These increased efficiencies improve TCO while driving competitive advantage and boosting public image.
  3. Remind stakeholders that deploying the innovation in question is not a one-time, one project benefit by discussing or showing how the investment will continue to pay dividends and have positive impacts into the future. Here are a few examples:
    1. Modernizing legacy equipment to modern scalable, modular systems offers the agility to more quickly capitalize on emerging business opportunities by being able to deploy supporting infrastructure much more quickly.
    2. Successful upgrades that reduce operating expenses can be predictably replicated at other sites.
    3. Infrastructure modernization can provide the opportunity to consolidate and downsize, allowing more room for business generating IT applications or sellable space if you’re a collocation vendor. That value should be quantifiable by you. Modern infrastructure equipment is smaller, lighter, and much more energy efficient. These benefits will provide value throughout the lifecycle of the data center.

Practical Tools that Help Make the Data Center Infrastructure Investment Case

Business stakeholders will be looking for information that communicates how business risks (like downtime) can be reduced. They are also eager to size up the quantity of resources required to support the new technology, and are interested in any metrics that can show return on investment.

In preparation for the cost justification discussion, several tools can help present the financial trade-offs and a convincing presentation:

  • Capital cost calculator – Estimates the cost to build a data center based on several factors; allows project stakeholders to compare costs between different data center architectures.
  • Cooling economizer PUE calculator – This tool compares seven common cooling architectures and calculates their expected annual Power Usage Effectiveness (PUE), energy cost, and carbon emissions. As the user inputs the data center location, and the characteristics of their power and cooling environment (such as IT inlet temperature, % load utilization, and type of power and lighting) results are calculated.
  • Data center efficiency calculator – This tool shows how various design decisions and operating conditions affect the efficiency and electrical costs of a typical data center. As the user inputs details regarding the power and cooling configuration, results are calculated based on a tested and validated three parameter model.
  • Virtualization energy savings calculator – This tool illustrates the energy savings resulting from the virtualization of servers within a data center. The calculator allows the user to input data regarding load, number of servers, energy cost, and other data center elements. Both the “as is” and “to be” characteristics can be entered as inputs.
  • IT carbon & energy allocation calculator – This tool helps data center operators assign carbon and energy costs to IT users. It helps IT users to make smarter decisions regarding costs as they consider options such as virtualization and server retirement.

Research-backed Trade-off Tools at Your Fingertips

Tools such as these foster more agile, service-oriented data centers to help staffs better control both capital costs and operating costs. The data extracted can also help build a financial case for justifying data center upgrades or for funding data center modernization projects.

To learn more about how to better quantify data center investment benefits, access my team’s library of data center trade-off tools, from the Data Center Science Center.


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