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How to Understand the Real Costs of Your Old Servers

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Written by Alaa Bawab, General Manager, Lenovo Infrastructure Solutions Group, META

Technology is changing, and thanks to the arrival of emerging tech such as artificial intelligence (AI), data centre hardware has become even more important. It is therefore time to rethink the cycle with which organisations refresh technology. The benefits of refreshing inventory are immediate and measurable in terms of cost and efficiency while offering business leaders the opportunity to adopt new technologies at speed. In the current climate, it has never been more important to take control of the total cost of ownership (TCO) of data centre hardware and adapt to these new and emerging opportunities.

With regulation increasing in the sector, and the European Union now requiring large organisations to report on their energy use, the pressure to curb consumption has grown. Swedish researcher Anders Andrae predicted in a scientific paper that by 2025, 33% of the total cost of information and communication technology (ICT) will be down to the energy demands of data centres. As a result of ongoing turbulence in energy costs, it has also never been more expensive to run a data centre, or more cost-effective to upgrade to faster, less demanding hardware.

On the other hand, the Middle East region is actively investing in the data centre industry as part of its goals to position itself as a global tech hub. With the tech-hungry region facing an increase in the domestic demand for the likes of social media, cloud and other data-first applications, the region is set to take the lead on data-centre-enabled projects like smart cities, AI, crypto and more.

Organisations in the technology sector are already engaging with this problem, aggressively consolidating hardware to drive ever greater levels of efficiency. But to achieve this, IT leaders need a new way of thinking.

Siloed thinking
IT leaders are often reluctant to buy new servers, and this is a fact of life across every industry. Organisations tend to get servers up and running and then leave them to operate until the day the machines die, almost as if they are frightened of them or fearful of what may happen if changes are made.

This passive inaction usually creeps in due to siloed thinking. In most companies, infrastructure, software and facilities are on different budgets, so it’s incredibly hard to work out TCO for data centre hardware. Forward-thinking business leaders therefore need to bring everyone into the same room to understand the full picture. When organisations fully understand the cost of their old servers, it provides them with a different perspective on the value of new ones. By joining the dots and bringing together different people, everyone will recognise the value of upgrading the company’s IT infrastructure.

The benefits of upgrading
Thanks to Moore’s law, which states that computing capacity will continuously increase over time, businesses that refresh their IT infrastructure will either double the performance of their hardware or half the price every 18 months. For example, if you replace a three-year-old server and deploy a new one, you will get twice the power in-app performance, giving you the option to consolidate and further reduce your costs. Leading players in the sector are already taking advantage of this and being proactive in their IT refresh cycles. Investing in the short term will lead to savings in the long term.

There’s a curve of cost when maintaining an existing server through extending warranties, repairs and energy inefficiency. Companies should ensure that 20% of the data centre has hardware that is less than three years old, as this enables them to take advantage of new technologies and ensure they are not left behind.

For instance, AI might require a 700-watt graphics processing unit (GPU), and if you have old data centre hardware, you might well be sitting there with machines that can’t plug the new card in. Most customers buy three years and then an extended warranty for five, but the correct approach should be a constant practice of refreshing and recycling. This is where an ‘as-a-service’ approach comes in, allowing business leaders to enjoy the latest hardware without the capital outlay.

Maximising efficiency
In the data centre, business leaders should aim to do as much as they can with the least amount of hardware. Refreshing inventory provides the chance to consolidate and drive efficiency. Whatever server you have, you should run it at the highest level you can to maximise your efficiency of energy and cost. Technologies like virtualisation are helping businesses make more use of their servers, but for most, there is still a lot to do.

Large organisations often run their servers at the highest levels they can. People are fearful about doing this, often worrying about redundancy. But if you put in safety features, consolidate, and run the servers at the highest level, you can reap the rewards in terms of efficiency and cost. The key is to drive the number of servers as low as possible, and continually integrate.

Taking control of energy consumption
Refreshing inventory is a key part of taking control of electricity consumption. The electricity coming into your data centre powers heating, ventilation, and air conditioning. Putting that power into the server feeds the fans, memory, and discs, and then the power runs and fuels the processor. There’s also virtualisation, and inside that is where you run your software. By the time you have done all this, you have lost about 40-60% of the electricity you started with because each of these components takes up power. Technologies such as water cooling are therefore crucial and can cut the costs of heating, ventilation, and air conditioning.

This is another reason why consolidation is so important. The first thing to do is to ensure you have measurement systems. You need to work out what is using all this power inside the data centre. Once you have that picture, then you can work out where the low-hanging fruit is. You should look at your data centre like a farmer looks at his fields, aiming to get the most out of every square foot of land. This is the pathway to reducing TCO and extracting maximum value from your data centre.

Servers and the Future
Regulation around energy use is only going to continue getting tighter, and with energy costs remaining high, there has never been a better time for business leaders to rethink their data centre strategy in terms of energy costs.

Big players in the market are already showing the way, aggressively consolidating hardware and pushing every server to the limit. For forward-thinking business leaders, taking a top-down view and rethinking their approach to server hardware is something that can cut costs, boost profits, and help save the planet.

The GCC region has seen the data centre industry evolve in recent years, with more change yet to come. With the region on the right trajectory, the GCC is opening up internationally, inviting a more exciting and profitable road ahead.

Prarthana Mary

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