Cut Data Center Costs Without Sacrificing Performance

If you feel like the budget for your data center is shrinking even as performance expectations are increasing, you’re not imagining things. While IT spending overall is expected to grow 4.5 percent this year, data center spending is projected to see increases of just 0.6 percent – and 2019 projections actually show decreasing budgets. Meanwhile, demands on data center capacity are only increasing, especially as new technologies like IoT, blockchain, and AI become more common in business settings.

The good news here is that most data centers can actually cut costs without sacrificing performance if they know where to look. Here, I’ll outline four strategies that can keep your budget down and your output high.

Get smarter about maintenance

Vertiv estimates the average cost of downtime for a data center is $9,000 per minute, meaning that keeping your machines up and running is essential for maintaining a positive ROI. But following a manufacturer’s recommended repair or replacement schedule can hurt you in two ways: If you update too early, you unnaturally shorten the lifespan of viable equipment; but if you wait too long, you could trigger an outage, which is almost always more costly than the work that would have prevented it.

The solution: adopt smart trackers that offer proactive alerts when equipment needs attention. For example, real-time monitors for UPS batteries can ensure that you maintain a more reliable data center with reduced maintenance efforts and cost.

Consider brand-agnostic equipment

No matter how well you maintain your equipment, of course, you’ll eventually need to replace it. There are two specific cost-savings strategies to consider when you do:

Try virtualization

Virtualization is kind of the Mary Poppins’ bag of data center technology. Instead of running just one application per server, virtualizing lets you optimize underused servers by running virtual instance of machines. The potential upside here is significant: You’re able to run more applications while decreasing the amount of hardware you have to maintain. An estimate from 2008 suggests that data centers can reduce overall costs by up to 40 percent through virtualization.

The caveat here is that transitioning to a virtualized or para-virtualized environment requires a careful review of the data center. Some servers aren’t good candidates for virtualization (e.g., if they have regulatory or security restrictions). If you go virtual, take the time to group servers logically. Energy Star also offers some energy-focused guidelines on how to think about this transition and the savings it can bring your company.

Boost employee retention

The cost of employee turnover has been calculated to be between 16 and 213 percent of the employee’s annual salary. Costs rise with a worker’s education and experience level. IT workers in a data center fall at the high end of the range, which is important to remember if leadership is looking to “go lean” on salaries to keep costs in check.

In some cases, reminding leadership of the cost of replacing a valuable worker can be enough to empower you to counter a better offer and prevent an employee from leaving.

Ideally, you won’t even get to the point that your team is looking for other jobs. Even if you can’t offer the highest salary or best benefits out there (and let’s face it, the competition in tech is pretty stiff), you can foster an environment and culture that people love.

The following efforts can increase retention rates, which can lead to noticeable savings at your data center:

Manage up: Educate the C-suite about the cost of downtime

Cutting costs in a data center is an achievable and often necessary goal. But, as the saying goes, to everything there is a season. When you see an absolute need to spend money on new hardware or an additional team member, be ready to communicate the value of the data center to leadership.

Knowing that downtime costs $9,000 per minute can strike fear into the heart of even the most budget-conscious CEO. Remember: data centers are not a cost, they’re an investment. Showing leadership how properly funding yours is the only way to support larger business goals is the key to getting what you need (though probably not a penny more).

Tim Dixon is CEO of InterOptic, a data interconnect company that helps Fortune 500 and government institutions manage the bandwidth, interoperability, and complexity in their IT networks.