San Diego Companies Find Data Center Budgets Reduced

by | Data Center Power Rates

San Diego Colocation And Data Center Budgets Reduced

Recently DataCenterAndColocation conducted an informal survey of several companies in San Diego to discuss their data center budgets. What they found was companies have virtually stopped any colocation budget growth in 2009. Looking back at 2008, it showed budgets increasing in the low double digits but this year everything seems to be flat on growth. Many companies are exploring ways to reduce their colocation costs by considering alternatives to California’s high cost of colocation and electrical power. To compound the issue, as companies change equipment to blade servers, many data centers don’t have enough cooling for their equipment.

The responses from San Diego companies revealed:

  • The major focus is on reducing data center costs. There was a significant increase in awareness as executives review the increasing percentage of power costs to support newer equipment initiatives. As companies try to squeeze out every excess dollar spent on IT, power costs in California keep negatively impacting bottom-lines and efforts by IT and CFO’s.
  • Systems management software spending continues to decline in 2009.
  • Virtualization has continued at a much slower rate than in 2008. Many companies are evaluation the got-to-have factor versus the must-have as they navigate through this down economy.
  • San Diego companies spending money on new servers are doing so because of their equipment refresh schedule and server virtualization deployments but less on supporting new applications due to the economy.
  • There has been a reduction in the use of blade servers as companies become more aware of the cooling and power costs of these servers. Many in-house data centers can not support increases in heat generation by this equipment.
  • Many companies are exploring hot-aisle/cold aisle containment configurations to support in-house data centers. The driving force of this expenditure is the increasing need to control heat generation.

Cost Cutting Solution

So the solution might include efforts to relocate their data centers and servers to states with significantly lower colocation costs. Let’s compare some major states close to California.

Commercial Power Rates (Cents per Kilowatthour)

March 2009 March 2008
California 12.25 11.54
Nevada 10.47 10.45
Montana 8.29 8.33
Arizona 8.86 8.2
New Mexico 8.82 7.72
Colorado 7.5 7.69
Oregon 7.58 7.37
Washington 7.21 6.89
Wyoming 7.03 6.59
Utah 6.62 6.34
Idaho 6.13 5.4

As you can see, all states close to California have significantly lower power costs and also cooling costs. Approximately 60% of all data center costs are associated with power and cooling. Many San Diego colocation customers are evaluating these differences and making cost savings choices to relocate their data centers to reduce overall costs.

About DataCenterAndColocation: Our company, located in San Diego California, represents approximately 3000 data centers and colocation centers across the US. At no cost to our clients, we identify specific space, power and security requirements, solicit proposals, professionally analyze them, compare the strengths and weaknesses, negotiate pricing and deliver highly competitive bids for colocation. Whether you are moving your existing primary site, adding data center sites or establish a disaster recover site, our service is your best solution to reduce costs and free employee valuable time. Our specialty is identifying very high quality and low power cost data centers.