How to save 67% of data center costs by consolidating and choosing colocation
An international energy company considered consolidating their on-premise data centers and move them to Green Mountain’s SVG1-Renneøy. This would give them several benefits including higher Tier certification, increased security, and improved efficiency. Furthermore, when looking at the saving potential compared to their current set-up there was clearly a very strong economic incentive to move as well. This business case study shows that a cost saving of 67% (64 mill NOK) was possible by choosing to co-locate at Green Mountain.
About the company
The company is an energy corporation with a global presence. They are engaged in oil & gas, wind and solar power. The company employs more than 20.000 persons.
The company has a hybrid strategy with a combination of on-premise data centers and cloud. As more applications have been moved to the cloud, there is less need for their on-premise data centers. Furthermore, especially two minor DC’s were increasingly costly to run. The average PUE of these data centers were 1.7. The total annual cost amounted to 55 mill NOK. (Including operational costs, depreciation, and financial costs.) In addition, there was an annual power cost of 39,8 mill NOK. Furthermore, they knew there were major unrealized gains by optimizing the data centers to a lower IT load. As a result, they started to explore options to consolidate these data centers. One possible solution was to place them with a colocation provider to improve efficiency and save data center costs.
When presented with the company’s challenge it soon became evident that Green Mountain could help. As a professional colocation provider, we could offer several alternatives of how to move and consolidate their data at one of our locations. Firstly, it would give them benefits of reduced data center costs and increased efficiency. Secondly, it would be an improvement in terms of security and reliability. The numbers in this article are based on the business case presented to the client.
A solution with two separate data rooms of a total of 450m2 was estimated to be sufficient. Furthermore, to allow for flexibility and rapid expansion, an option of an added 100m2 to one of the rooms was included in the offer. The data rooms were located in different mountain halls, separated by 70m of mountain rock. In addition, these rooms also have separate infrastructure to secure redundancy.
The Green Mountain business case presented clearly demonstrated a they could save significant data center costs. To clarify, this was mainly due to the three following factors:
- Optimization and automation allowed for a reduction in IT load from 3800 kW to 1600kW.
- Significantly lower operational cost at a dedicated colocation facility as Green Mountain.
- Green Mountain’s ability to offer considerably lower prices on power because of tax reductions etc.