Analyst: Enterprises fail to handle data centre costs

Businesses are failing to address the problem of assessing the costs of running the data centre making it near impossible to assess costing according to a senior analyst.

It's an issue that all companies have to address, said Nik Simpson, the Burton Group's senior data centre analyst, in a research report Counting the cost of the elephant in the data center that he has written. He said that most managers were suffering from insufficient information about the costs of their IT infrastructure, making it difficult to predict the return on investment on any technology.

"Part of the problem seems to be that the information seems to be spread out across the organisation," said Simpson. "An IT manager would have to go to facilities manager to get the electricity costs, to accounting to get the level of depreciation of equipment and real estate costs - it's going to be hard to get an accurate picture."

This matters because many of the trends in the current IT environment - such as server consolidiation, virtualisation and cloud computing are based on the idea that businesses can save money, but as Simpson said, there's no way of proving this for sure. "It's faith-based economic - people think it must save money but there's no way of proving it."

Of course, said Simpson, managers can, and do, estimate costs.

"You might not have complete figures, but you can work out an estimate of power costs. That will serve as a rough guide," he said. "Although, If you really want to get really accurate, then you need to get someone like an accountant to put together the estimate."

Simpson knew of one company that had managed to produce an accurate assessment. "They've got an intricate model, that accountants have been involved in creating and maintaining - it's a comprehensive guide to the actual costs.

Such accurate accounting could also help with working out chargeback costs. But there are companies who work on a different model. He said that he knew of another company whose assessment of chargeback costs for a virtual server was the same as the one for the physical one.

"In that case, they'd agreed a chargeback cost for a physical machine and didn't change it when they virtualised, that's a company that's never going to have an accurate figure," Simpson said.

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