Centralized Management Controls Data Center Costs in Deregulated Energy Markets

June 14, 2002 -- (WEB HOST INDUSTRY REVIEW) -- Centralized energy management is a "must" for hosting service providers that want to control costs within a competitive utility market. While competition promises dramatically lower energy costs, the reality is that electricity deregulation usually brings about uncertainty.

Competitive energy markets create many threats for operators of Internet data center facilities. These threats include volatile prices, less service reliability, more regulatory and technological burdens and a more complex suite of products and services to choose from.

As markets for power open up across North America, the prospect of simply paying a power bill has dissipated. Now complex hosting companies face a litany of decisions concerning the purchase and use of its revenue lifeline, power.

The most rational choice for a Web hosting firm to select within the face of open energy markets is "centralized energy management," a building control mechanism that analyzes and controls electrical systems. The installation of centralized management systems can allow a firm to analyze its power usage in minuscule detail. Data center operators are able to examine how much power they consume, when they use it, how much it costs at any time, and even determine which loads are crucial, and which loads can be reduced.

By collecting this information and then utilizing the control features of centralized energy management, hosting service providers can dramatically reduce energy costs. It is common knowledge that reducing costs is the current imperative driving Web host management. The sector is currently marred by over capacity, rampant competition and lack of capitalization. The result is that many firms have begun to fortify their business models in order to ensure their very vitality. One area that hosting managers are examining is how to sharply reduce energy expenditures.

With centralized energy management, Web host managers will be able to construct a comprehensive and thorough understanding of their company's power consumption. Such systems simplify the tedious, time-consuming job of analyzing consumption.

Competitive energy markets create sophisticated pricing structures where time of day, volume and point of delivery all play a dramatically important role in the fluctuating cost of energy. Centralized energy management accounts for all of these variables and allows managers to determine what they are immediately and how can they can best utilize these variables to decrease energy consumption and expenditures.

By deploying the control function of a centralized management system, data center operators can disconnect non-essential loads during high-priced periods; move power usage from on-peak to off-peak times for non essential equipment; and continue to pursue energy efficiency by monitoring the energy that they are consuming and by continually finding opportunities to decrease expensive consumption.

By using the features of centralized energy management, data center operators can begin formulating cost-efficient, energy strategies to control costs. Such intelligence allows operators in deregulated markets to profile their electrical loads to provide significant leverage in price negotiations with suppliers, and to even create cost models through pricing comparisons of competitive energy service companies.