Data centre scene heats up with introduction of carbon pricing

With the impending introduction of Australia’s carbon tax on 1 July, the data centre and its escalating running costs are coming under the spotlight.

This month, VMware’s MD Duncan Bennett hosted an oblong table (as opposed to a round table) discussion on what the introduction of carbon pricing on 1 July this year will mean for technology. Ovum’s research director for the Public Sector, Dr Steve Hodgkinson, led the agenda, and was joined by Macquarie Telecom’s MD, Aiden Tudehope.

Hodgkinson was the IT guy who headed up the Victorian Government’s first report on the cloud in 2009, so he knows a thing or two about the cloud and the public sector.

“The four C’s - namely cost, consumption, carbon and communications - all had to be considered collectively when talking about productivity gains from the cloud, with the carbon pricing regime only one way of thinking of carbon.

“Survey after survey show that ICT is more and more a driver of productivity, but it is also a constraint. Cloud is a genuine catalyst for productivity and can be used as needed.

“Cloudy is as cloudy does,” in essence, said Hodgkinson.

Bennet said, “There is more going on than the consolidation of servers. For example, cloud, with its three variants: public, private and hybrid - a combination of the two. Australia is second only to New Zealand in being the most virtualised country in the world. Macquarie Telecom, who has green hosting centres, was the first VMWare customer in Australia.”

Introducing a carbon pricing scheme is nothing unusual in the global context, but it just means that Australian organisations will need to do better at energy management, which means measurement. The use of energy consumption sensors will be an option for organisations.

Tudehope said, “With power prices set to increase by 40-50 % over the next three years - and that doesn’t include the added carbon price - the cost of power will be more than [that of] a server.

“A CFO is going to ask what is going on. VMware allows an enterprise to have fewer machines on a server so you have to make it as efficient as possible.”

This month, Hewlett-Packard opened its AU$200 million, Tier 3 Aurora data centre at Eastern Creek, with a power usage effectiveness (PUE) target rating of less than 1.3.

HP’s Aurora data centre offers its clients its Carbon Emissions Management Service, an assessment service that helps organisations calculate estimated energy consumption and greenhouse gas emissions from the use of IT, and will assist with compliance-based carbon footprint reporting.

VMware’s Bennet made the point that IT consumes 7% of the global energy consumption, which is on par with the airline industry. CIOs are going to need all the help they can get as Hodgkinson says he suspects most Australian CIOs are not accountable for energy consumption yet.

“One of the clearest examples of cost savings from an energy perspective is using the public cloud,” said Hodgkinson.

While opening the HP Aurora data centre, Senator Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, remarked that CBA’s CIO Michael Harte had saved millions of dollars using the cloud.

"But it's not only big organisations that can benefit, as SMEs like the Australian Life Saving organisation - which is a not-for-profit - had saved up to 25% of its IT costs using cloud computing. It is estimated that over the next three years there will be AU$1.5 billion worth of savings using cloud computing," he said.

Downer EDI, Origin Energy and Elders Limited are three large enterprises which are all in the process of transforming their ICT businesses to take advantage of the cloud, using HP’s data centre.

Joseph Amoia, Downer EDI’s CIO said, “Downer EDI has selected HP Enterprise Services to build, manage and host its technology infrastructure from Aurora. This will streamline the existing IT facilities and systems from eight data centres, 260 server rooms and 17 service desks into a single virtual data centre, operating system and network, freeing up a lot of real estate.

“This is a fundamental component of Downer’s transformation, and will allow the company to focus on business outcomes rather than IT,” said Amoia.

Olaf Pietschner, Group CIO, Origin Energy, said the decision points for using Aurora were the carbon tax, smart metering and the digitising of oil fields.

“This data centre addresses our scale and complexity and is a much better choice than building a data centre ourselves. Moving away from CAPEX-intensive ICT is part of the mobile strategy to deliver IT services to customers.”

Shaun Hughes, CIO of Elders Limited, said, “We are going through a significant transformation to use SAP on the cloud. Using HP’s facilities means we can progress much quicker than [if we did it ourselves].”

Hughes likes the fact that Elders can ramp up when it needs IT resources, saying, “It is fundamentally a cost paradigm shift.”