Most new independent data centers in India are pitched as green facilities, but customer decisions are still driven largely by cost considerations rather than sustainability factors. A peek into the green DC dynamics, By Mehak Chawla
Until about two years back, Yashpal Soni, CIO of Everest Industries, used to run his own data center. However, the steep rise in power costs soon rendered an own data center unviable for Everest. It was then that Soni decided to host his infrastructure in a third-party Independent Data Center (IDC).
“We shifted our data center under our transformation initiative and decided to go for a tier 3 data center with Tulip. As of today, all our apps, including ERP, CRM and even mobility, are in the third-party data center,” he says. At present, Soni is paying Tulip Rs5 lakh per month for power and service for an uptime of 99.9%. The company’s immediate saving was the 10KW of power that its in-house data center used to consume. Coupled with considerable savings in resource costs, the IDC proposition, according to Soni, made perfect sense for his organization.
Today, a lot of Indian CIOs share Soni’s view when it comes to saving costs by moving their data center infrastructure to a third-party property. As a result, IDCs have managed to flourish in India. According to Gartner, the data center colocation and hosting market in India was Rs2925 crore ($609.1 million) in 2012. McKinsey estimates that the third-party outsourced data center market in India will grow at a CAGR of 32% to touch Rs5,500 crore by the year 2017, with verticals such as banking and financial services, media and entertainment service, manufacturing, telecom and retail accounting for 70% of this growth.
However, as the data center market witnesses considerable expansion in terms of capacity growth, it is also faced with the monster of rising operational costs. As a result, IDCs in India are left with little choice but to optimize their operations and bring in greater efficiencies. Green technology, over the last couple of years, has become the obvious answer to this dilemma. But does green necessarily translate into cost efficiency? And are customers really concerned about how green a data center is? We try to find out.
Energy enthusiasts 
On an average, about 70% of operational costs in a data center today are directly related to energy. Observes Jayabalan S, CTO, Netmagic Solutions, “Energy costs are a big deal for IDCs because savings on the energy front contribute significantly to our bottom-line. So we are constantly monitoring our equipment footprint.”
Though there are a lot of aspects to greening a data center, given the power scarcity and the cost sensitivity in India, power saving has become the predominant face of the green campaign here.
As a domino effect, there are a lot of investments pouring in for green hardware like servers, network equipment and storage. The IDCs have realized the fact that while energy efficient hardware can cost a little more upfront (almost 10-15% more), it can yield better margins in the long run.
“We see the most traction/adoption of green technology in the IT hardware aspects. Increasingly, the energy aspects of green (like less power usage, less heat emitted, etc.) are becoming main stream technologies in the ICT marketplace,” says Venu Reddy, Research Director, IDC India.
The other catch with IDCs is that in most cases, the data center vendors only end up providing the space and other infrastructure like cooling, because customers bring in their own hardware and host it with them. Thus, IDCs have a narrower scope of innovation on the green front and that could be the reason behind active investments in the cooling, space and design technologies that IDCs are now making. There are multiple ways in which an existing data center can achieve energy efficiency. One of them is by closely monitoring power consumption and bridging wastage gaps.
“Data centers also need to approach energy concerns in terms of IT procurement. Green hardware including server, network, and storage equipment that consumes less energy for the same compute is something that IDCs are scouting for,” explains Nareshchandra Singh, Principal Analyst, Gartner.
The most important driver for building a green data center, feels Sanjay Motwani, Country Director, India & ME, Raritan International India, is indeed reduction in power consumption. “In the majority of cases, the cost of power for both IT infrastructure and cooling accounts for about 80 – 90% of operating costs. Hence there is a constant need to monitor and measure power on a real time basis. The choice for computing devices and supporting equipment for a green data center should be driven by efficiency and Total Cost of Ownership (which includes cost of operating the equipment over its tenure of 3 to 5 years) and not by costs paid for equipment and extended warranty only.”
However, if we are to evaluate the sustainability initiatives of the greenfield data center projects, the story is a bit different from simple power optimization, as the green element is now becoming an integral part of data center design.
Greenfield projects
Even though the existing data centers might only have a handful of options in terms of going green, the newer projects are upbeat about green right from scratch. The Leadership in Energy and Environmental Design (LEED) certification for green buildings, developed by the nonprofit U.S. Green Building Council, has a big role to play in this transition. A lot of newer IDCs are chasing the gold and platinum LEED tags for their buildings. While Netmagic already has a gold-rated data center in Chennai, Tulip’s Data City, located in Banglore. is undergoing the certification process.
Although LEED certifies only the building, and not the data center itself, the rush to get rated does throw some light on the fact that greenfield data center projects are incorporating sustainability from the ground up. Says Motwani, “The good news is that all new buildings being built have some level of green concept built in – both in terms of functional design and tools deployed for optimizing power.”
Jayabalan concurs that LEED has put a lot of emphasis on green buildings and IDCs are opting for them. “Unfortunately, the rating is only for buildings and we still don’t have any standards exclusively designed for data centers,” he laments.
Sanjay Bhutani, CEO, Data Center Services, Tulip, elaborates on how Tulip Data City went green right from its inception. “Tulip Data City (TDC), though mammoth in size, is in fact lean when it comes to power consumption. TDC is a repository for storage (contiguous isolated rack space of 10,000 sq. ft. per module), management, and dissemination of data. Our mechanical, lighting, electrical (utility power from 66 KV sub-station feeding 40 MVA power with 100% back-up) and computer systems are designed for maximum energy efficiency and minimum environmental impact. With one of the lowest Power Usage Effectiveness factors in the industry, it saves over 40 MW of power with a PUE of about 1.5 to 1.7, which is almost 40% lower than the best data centers in India. At peak power utilization, the data center will use almost 100 MW of power, which equals the utilization of the largest data center in the world.”
A key aspect of greenfield projects is that they are increasingly being designed to better use the cooling technology to control cost. Jayabalan says that IDCs are taking a lot of individual initiatives for green – predominantly in cooling technologies where they are opting for chiller-based cooling as against a gas-based system. Quite a few data centers are also trying to use natural, river water for their cooling requirements. “We struggle to be green when compared to captives because we don’t control the hardware that rests in our data centers. That is why we can innovate only in terms of cooling and space technology,” says Jayabalan.
According to Shrirang Deshpande, Director, Data Center Business, Emerson Network Power, India, “When we talk about efficient infrastructure, we have to look at the whole energy chain that goes into a data center—and cooling is an integral part of it.” He gives the example of HSBC, a company that has recently developed a capacity-based cooling system to save on energy costs.
Although the key measure that IDCs are banking upon right now is PUE, experts are now beginning to argue that a lower PUE might mean power effectiveness, but it doesn’t necessarily mean a green data center or translate into a differentiated positioning in the market. For one, Jayabalan says that although all of Netmagic’s data centers are green and have a PUE under 2, there is hardly any way to distinguish them from any other power-efficient data center which operates at a similar level of PUE.
Beyond PUE
In the absence of any other global benchmark, PUE is the only measure against which data centers are proving their efficiencies. The Green Grid’s PUE creates a common reference point that makes it possible for data center operators to start making important assessments of their facilities, as well as their going-forward strategies for reducing energy usage. However, according to Shrirang of Emerson, “Though the market is demanding a certain PUE , there is a lot of discussion going on as to whether PUE is a holistic measure of sustainability in a data center.”
Though The Green Grid introduced yet another tool called Data Center Efficiency (DCE), which was later refined to Data Center Infrastructure Efficiency (DCiE), it failed to garner acceptance levels equivalent to those of PUE. In India, the new standard is barely heard of. In contrast, the concept of Data Center Infrastructure Management (DCIM) tools (for instance, Emerson’s Trellis) is beginning to gain traction. It is generally believed that once DCIM becomes mainstream, other metrics, including DCiE, will also pick up.
Experts believe that PUE is being used only because we are yet to have an evolved data center standard. Till that happens, IDCs are bidding tightly with ever-lower PUEs to gain customer attention. CIOs, too, are beginning to consider PUEs in their data center decisions. Shailesh Joshi, Head – IT, Godrej Industries, says, “While choosing a data center three years back, we hardly considered the PUE and simply went in for the vendor that offered us the most competitive costing.” Today, however, Joshi would prefer to host with a service provider that not only offers a lower PUE, but also has green elements in its design and construction. “It fits with our company’s sustainability policy,” he says.
According to Prashant Gupta, Head of Solutions, India, Verizon Enterprise Solutions, “The customer awareness about green goes as far as checking the PUE of the data center. A few customers also ask about Greenhouse Gas (GHG) emissions.”
With lower PUE ambitions in the background, IDCs are innovating to trim their electricity bills. For instance, Netmagic adopted a container-based approach to reducing energy consumption in one of its data centers. “We built the containers using the same material as they use on ships and realized better PUEs,” reveals Jayabalan.
Gupta of Verizon also gave an example of attaining efficiency in Verizon’s data center operations in Amsterdam. “In our Amsterdam office we are re-using the heat coming out of our data center to heat our office, and that is resulting in a lot of cost savings.”
According to Jayabalan, though a lower PUE might increase the margins of a data center, it is unlikely to play any significant role in clinching deals, except in cases of colocation. “Where the PUE concept really makes sense is for colocation customers. Since these customers buy power, space and cooling and are charged on the basis of power consumption, a green IDC can generate a lower multiplier for them. There, the PUE is a great tool to compete against other vendors.”
Soni echoes the CIO perspective on PUE, “Although we did take into consideration the PUE factor, the fact is that for a customer, there is no way to gauge whether the data center is running at the claimed PUE. However, it does matter how a lower PUE can translate into lower cost for us.”
The green pitch
So does green necessarily translate into higher costs for a data center? In most cases, the answer to that is in the affirmative. “If it is now, then yes. Green is always cost-intensive. However, over a period of two years or more, green is an investment which will help a data center save,“ observes Motwani of Raritan.
Bhutani of Tulip concurs that building and certifying a green data center can be expensive upfront, but long-term cost savings can be realized on operations and maintenance. The interesting bit here is that even though IDCs spend a little more on greening their data centers, this cost never escalates to the customer, thanks to the cost-competitiveness in the data center space. Singh of Gartner opines that companies cannot have an IDC that is efficient but not cost-competitive, since green is not a deciding factor when it comes to data center hosting.
Others tend to agree that while green might attract the attention of the customer, it is unlikely to be the deciding factor in purchase decisions. There, the cost and the depth of the SLAs remain key considerations. As Motwani says, “Green as a pitch is a feel-good factor but not a sales pitch. Being Green is a ‘bonus’ or a ‘freebie’ which a customer gets. It is never the driver.”
Experts also cite lack of regulations in the sustainability domain as a key reason for customers’ reluctance to opt for a greener data center. “IDCs use green for better margins in the long run but it is not yet a marketing pitch for customers. It might attract attention but it doesn’t influence decisions, or the readiness to pay a higher price. Businesses, unless regulated, will only look at the bottomline and the topline,” says Jayabalan.
As a result, green in the IDC space has only gone so far as being a sustainability initiative on the part of the data center vendor—one that can yield RoI in the long run but that isn’t affecting customer decisions as of now.
The question of high availability
Today, going green is a no-brainer for greenfield data center projects. It is maintaining the green factor that is becoming a challenge. A data center not only needs power-saving mechanisms but also real-time power consumption monitoring. The interesting thing to note is that while energy-saving technology in terms of types of lights, air-conditioning, switches, etc., is indeed being deployed, tools that help monitor energy consumption (for instance, intelligent Power Distribution Units or PDUs) are seldom deployed. Hence, going green today is largely a one-time action rather than an ongoing process.
The other big challenge that data centers face is that not only is the upfront cost of going green high, the opex of maintaining green hardware often goes up as well. Billing to customers in IDCs happens on two bases—cost of operations and cost of space. If even one of those parameters undergoes a shift, cost management becomes a complicated affair for an IDC.
However, the biggest challenge in front of an IDC looking to go green is the availability equation. Any data center manager’s top priority, across the world, is high availability. If the green factor, in any way, affects the availability factor, then availability takes precedence and green takes a back-seat.
The problem lies in the fact that availability and efficiency are contradictory terms in the data center space in India. The scenario differs for developed economies since green hardware is mainstream there and their application architecture is designed from a virtualization or cloud perspective. “If people are to look at available and efficient through the same glasses, then it has to begin at the application layer,” believes Jayabalan of Netmagic.
Several green technologies are likely to become mainstream in India only once they come within the affordability bracket of IDCs and also have a positive impact on overall data center availability. Another key driver for green data centers could be the regulatory push, which is yet to happen in India.
However, all said and done, the fact that IDCs are taking baby steps toward green is now indisputable. What remains to be seen is when will green translate into a concrete sales pitch.
