IT should pay the power bill, reasons eBay exec

While not a common practice in most organizations, having IT departments pay their power bills would lead to far more efficient data centers, argued Dean Nelson, senior director of global data centre services for eBay Inc.

Why? The potential money saved from upgrading to more energy-efficient equipment would all but ensure that the chief information officer or the IT executive in charge design the most energy-efficient data centres possible, Nelson reasoned.

“When the CIO is paying the power bill, (he or she) really understands the impact of the decisions being made,” he told an audience of data centre managers at the Uptime Institute Symposium 2010, being held this week in New York. “You’re self-funding the activities (you wish to pursue) by becoming more and more efficient,” he said.

As proof, Nelson pointed to eBay’s newest data centre, a US$287 million facility that just opened in Salt Lake City last month. EBay lumps the facility bills in with the IT budget, and as a result, the company has aggressively looked for ways to cut power consumption.

And the payoff is the new data centre. According to Nelson, the facility was “paid for by the cost savings we’ve achieved within the last two years.”

Until the past few years, eBay’s growth was closely followed by its operational costs, Nelson explained. The company sought to break this correlation by looking for ways to support growth of the business while keeping the IT budget flat.

Today, the service has about 90 million users, in addition to the 72 million users of the eBay-owned PayPal. All totaled, these users make 93 billion database calls a day. When the auction site goes down, it costs eBay about US$2,000 a second. There are about 250 million items being auctioned actively on the site at any given time, and the company is gunning for a worldwide rate of a billion items.

The key to increasing efficiency is rethinking your metrics of success, he said.

“Our metrics have changed. It’s not just about transactions per second. It comes down to transaction per watt as well as dollar per watt,” he said. “All the new platforms that came up were measured to those metrics.”

With this metric in place, eBay has applied various techniques to reduce cost on a per-watt basis. It delved into virtualization and moved non-mission-critical applications, such as search, off the “Tier 4” data centres. These centers offer the highest level of availability, but also cost two to four times as much to operate as standard data centres.

It also has pursued an aggressive upgrade cycle, in order to take advantage of the gains of Moore’s Law. Nelson said the company now uses Intel’s Nehalem processors, noting that the chips, on a per-watt basis, would provide up to five times the performance of previous Intel server processors.

The older the equipment is, the less efficiently it uses power, Nelson said. Yet IT managers might be reluctant to upgrade, given the cost of new equipment. However, this approach may actually cost more in the long term.

“We replace our equipment every two years, in a leasing model,” he said.

The worlds of physical infrastructure management and IT management are converging, agreed Martin McCarthy, CEO of the 451 Group, which owns the Uptime Institute. Today’s data center operators have to think more holistically, he said. “Energy efficiency is ultimately economic efficiency,” he said.

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