Issue 4, June 2009
FOCUS COVER FEATURE
a unique set of circumstances.
“Who is responsible for carbon production? From a legal perspective, it is not clear; from a contractual perspective, it is not clear. There are a lot of details to be announced. The programme has been announced, but it is very general and broad,” explains Foy.
“If there is a heavy tax being applied on power utilisation in your data center, you are going to fi gure out a way to cut it,” he says.
And there is no shortage of companies willing to help. For example, IBM is already pushing Z series mainframes as energy effi cient and delivering ‘tradeable carbon’ benefi ts.
There are a huge number of carbon impact assessment services emerging from fi rms as diverse as BT and Unite Technologies, which was quick off the mark in late 2008, when it announced its new energy management solution.
ANYWHERE BUT HERE It is also not clear what is happening in certain countries. Will the carbon scheme infl uence where data centers are built? Theoretically, it could happen that stringent tax regimes might push investment to, say, Greenland.
It is certain that many companies in sectors such as fi nancial services are bound to their national territories through data security and compliance regulations, and will have to operate their data centers under any tax regime that any government sees fi t to impose.
For others, could it mean opportunities for competitive advantage? In a globalised economy underpinned by robust data center and network infrastructure, are there opportunities to use carbon trading schemes to best advantage? How will it affect data center strategies and how will it affect data center service delivery contracts?
Take a company such as Syngenta. It is an $11bn global corporation that, among other things, produces more than one in seven of every tomato grown in the world, does a lot of crop development at a genetic level, and expects its data to grow to over four petabytes from 450 terabytes today.
The company opted for an imaginative approach to data center management. A long-time HP customer, it decided to move from a ‘managed server contract to a managed services contract’.
This meant handing over the operation of more than 75% of its 1,200 servers to HP as part of a plan to have all infrastructure capital spend removed from IT as part of a fi ve-year capital plan.
A FOCUS ON LARGE ORGANISATIONS
The UK scheme is due to start in April 2010 and is designed to tackle CO2 emissions not already covered by Climate Change Agreements and the EU Emissions Trading Scheme. The scheme will capture large public and private sector organisations. This sector is responsible for approximately 10% of the UK’s emissions. Around 20,000 organisations may be aff ected by the scheme in some way and yours could be one of them. Organisations are eligible for CRC if they (including all their subsidiaries) have at least one half-hourly electricity meter settled on the half-hourly market, and they will qualify as CRC participants if their total half- hourly electricity consumption exceeded 6,000MWH during the qualifi cation period. The qualifi cation period for the introductory phase is the 2008 calendar year. It is estimated that around 5,000 organisations will qualify to participate. These are likely to include supermarkets, water companies, banks, local authorities (including schools) and all central government departments. Organisations qualifying as CRC participants will be legally required to comply with the scheme. Failure to do so will result in penalties, including monetary fi nes.
Syngenta’s physical servers were decommissioned as the data was shifted to HP-owned/operated data centers. HP owns the assets, but not the data.
The company uses two HP data centers: one in Alpharetta, North Carolina; and another in Grenoble, France. It has a fi ve-year contract with a two-and-half-year opt-out and a three- year extension option.
It has strict service level agreements about performance and availability (one-second response times and 99.8% availability for running applications, from email to SAP).
The deal was signed just last year. When asked whether any thought was given to any kind of carbon production involved in the delivery of the services, Mike Meysner, head of global operations at Syngenta, said: “Carbon was not an issue in the negotiations. It is not my issue – it is HP’s issue.”
TAKING OWNERSHIP HP, for its part, explained that one subject that is increasingly coming up in negotiations is the notion of who owns the carbon.
The fi rm said that in one of the largest outsourcing deals it recently completed, the client stipulated that HP be a signatory to the EU Code of Conduct (COC) for Data Center Effi ciency. An HP representative said that it has signed as a participant and an endorser of the COC, though at the time of going to press no offi cial announcement had been made.
It also said that carbon production and measurement, and who is ultimately responsible for it, is rising up the agenda fast.
The reason it could become very complicated – and very fast – is that a company such as Syngenta, or an indigenous UK company, could stipulate that it wants its services delivered from a data center in the middle of France.
HP’s data center in Lyon is 600 square metres,
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runs at 22o in the server room, has a PUE of around 1.5 and an average power rack of 4KWH. When asked who pays the power bill, and how much it costs annually, one of the data center managers responded: “I don’t know – and I don’t want to know.”
Would a UK company using such a service put it outside the scope of the UK’s scheme and therefore mean that a company can export its carbon emissions and avoid any liability? And that is just France. What if it decides to take data center space in India?
Both Syngenta and HP agree that by the time the option to extend the services contract comes up for negotiation, the issue of who owns the carbon will defi nitely be on the agenda.
Will an agreement such as this be affected by any US carbon cap and trade scheme, or an EU-wide carbon legislation? It is hard to see how it wouldn’t be.
For the moment, the questions keep coming. Is the utility delivering renewable or sustainable power? And how much? Is it a carbon tax, a power tax, or a surcharge?
For as long as there have been taxes, there have been people making a living out of fi nding ways to avoid them. The question is, should you call your utility, your IT company, your data center operator, your lawyer or your accountant?
Given the complexity of the issues and the risk of fi nancial penalties, the answer is likely to be, “Start measuring your energy use now, and speak to all of them.”
MORE DETAILS
Carbon: Risk or Opportunity DatacenterDynamics San Francisco July 17 2009
Visit
www.datacenterdynamics.com for more information and to register
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