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1 Interested in conducting your own webinar?

2 July 17, 2012 TCO in the Data Center

3 Audio Abstract Presenter Info Slides Handouts Group Chat Q & A Live Twitter Feed Help Survey Archive Add to your favorites

4 July 17, 2012 TCO in the Data Center

5 CONSULT + ENGINEER + COMMISSION Mission Critical 7x24 Exchange Webinar Presented by Cyrus J. Izzo, PE Co-President, Syska Hennessy Group, Inc. July 17, 2012 All Rights Reserved

6 CONSULT + ENGINEER + COMMISSION Agenda Key Industry Trends TCO Concept IT Operations Design of Modern Data Centers Changing End User Requirements Questions and Answers

7 CONSULT + ENGINEER + COMMISSION Key Industry Trends Do more with less Economic trend = fewer IT, Operational and Facilities Staff Focus on growing Data Center Efficiency Optimizing Power Usage Effectiveness (PUE) Increase critical load density Reduce resource consumption Increased awareness of TCO (Total Cost of Ownership)

8 CONSULT + ENGINEER + COMMISSION TCO Concept Why is it becoming more important? Managing operations with restricted budgets Manage OPEX and balance CAPEX to optimize long-term financial impact

9 CONSULT + ENGINEER + COMMISSION Site Selection Design CAPEX Manage & Operate TCO OPEX Construct Commission & Turnover

10 CONSULT + ENGINEER + COMMISSION TCO Concept effect on IT Operations Lowering TCO and making the right decisions for IT Operations Should we build, operate, and own our own facility OR Outsource and colocate our data center?

11 CONSULT + ENGINEER + COMMISSION TCO Concept effect on IT Operations Largest capital expenditure is site infrastructure - 70% is operating expenses and energy costs, the balance is actual IT equipment Options to allow IT staff to focus on projects rather than operational support Colocation Outsourcing Cloud computing Various industries are following different strategies

12 CONSULT + ENGINEER + COMMISSION TCO Concept effect on Design of Modern Data Centers Site Selection Design choices Energy efficient design and modeling tools Time and resource commitment necessary for OPEX opportunities Future state

13 CONSULT + ENGINEER + COMMISSION Changing End User Requirements Smarter, faster and cheaper Zero tolerance for downtime Clients are interested in modular buildouts build what you need, as you need it just in time Focus on emerging opportunities and retaining clients New baseline: Uptime and Reliability

14 CONSULT + ENGINEER + COMMISSION Changing End User Requirements ASHRAE expanding the range for IT equipment thermal envelope allows us to accept new opportunities for efficient design Figure 2. ASHRAE Environmental Classes for Data Centers American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. All Rights Reserved

15 CONSULT + ENGINEER + COMMISSION Changing End User Requirements Design should provide a robust model to help: Operate and maintain facilities over lifetime With less staff At lower cost With the tools necessary to succeed

16 Total Cost of Ownership Terry Rennaker Skanska Mission Critical COE Mission Critical Magazine July 17, 2012

17 Agenda Identify the costs Expand the boundaries Identify the target you are solving for

18 18 Identify the costs

19 Identify the cost Costs are often siloed IT Costs Energy Capital Labor Maintenance Other Utilities (gas, water, sewer, etc.) Life of system

20 Identify the cost Capital and expense Direct capital cost Cost of space Depreciation annual/remaining Cost of capital Energy Time of day Demand Power source Other utilities Gas Water/Sewer Carbon tax

21 Identify the cost Labor Facility operations IT operations Maintenance Internal maintenance labor External/vendor maintenance Life of system IT

22 22 Expand the boundaries

23 Expand the boundaries Offsite Entire Facility Exterior Back of house White space Power supply Generators Energy Storage UPS Power distribution Racks Servers CRAC Cooling Towers Chillers Other facilities Other facilities Other facilities

24 24 Identify the target

25 Identify the target you are solving for What is important to your organization?

26 Identify the target you are solving for First Cost Operating Cost P&L Impact Balance Sheet Impact Payback Period Environmental

27 Identify the target you are solving for First cost Avoided capital expense If you spend this you avoid Operating cost reduction Energy Utilities Labor Maintenance Balance sheet Accepted term of payback

28 Identify the target you are solving for P&L impact Generally Accepted Accounting Principles (GAAP) Depreciation is an expense Capital vs Operating lease (FAS 13 tests) 1) There can be no ownership transfer as part of the lease agreement. 2) Does the purchase option cannot constitute a bargain as defined by FAS-13. 3) Lease term must be less than the useful life of the asset 4) The net present value of the rent cannot exceed 90% of the Fair Market Value of the asset 5) The lease term must be less than 75% of the remaining economic life of the asset

29 Identify the target you are solving for Accepted measurement Net Present Value (NPV) Return on Investment (ROI) Return on Equity (ROE) EBIT EBITDA Environmental LEED Energy efficiency Water efficiency Carbon impact

30 Conclusion Identify the costs Expand the boundaries Identify the target you are solving for

31 Type your question in the box and hit submit

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