Data Center Execution and Unit Costing

I was recently involved in a project where Intel IT SMEs from disciplines including Server, Storage, Data Center, Network, and Finance reviewed and updated our Data Center Strategy (/javascript:;) for Intel IT.  The primary focus of the paper was to provide an update on value realized, shifts in strategy, and key execution lessons learned.

Our execution highlighted the need for finance to participate as an active partner in the influence planning and internal communications.  At some point, especially in economically challenging environments, cross organization investment decisions boil down to a tradeoff between limited resources and a number of good projects. Being able to clearly articulate the value added by a "portfolio of projects" (like the Data Center Strategy) and how you will track progress doesn’t mean that the project(s) will be funded – but it does increase the likelihood that you will be in the game at the end.  For us, having this coordinated communication strategy for technology solutions,cost efficiency, and operational efficiency was a key consideration for successful execution. 

We currently estimate that the cumulative projected financial impact over eight years will be ~$500-650M NPV - this range has changed in upper and lower limits based on updates to forecasts.  Over the first three years, Intel IT has realized ~31% of the projected benefits through execution to the Data Center strategy.  The primary value driver has been the impact of our server strategies (multi-core refresh and virtualization) that enable demand growth within the existing data center footprint and affordability targets.  Moving into 2010, we are evaluating new forecasting and value metrics to enhance customer reporting of data center activities.  This approach will incorporate our activity driver methodology into comprehensive unit costing and forecasting framework, creating a holistic cost forecasting process to improve future decision making.

One area currently under review is establishing the right unit of measure for a data center infrastructure housing different compute environments.  Is this something you or your business partners are exploring or looking to explore?