As Published In
Oracle Magazine
March/April 2009

COMMENT: Analyst's Corner

The Next-Generation Data Center

By David Baum

Cost and environmental considerations motivate more-efficient operations.

Oracle Magazine spoke with Phil Fersht, research director in the global services practice at AMR Research, about how service providers are creating data centers that are both more efficient and more environmentally sustainable.

Oracle Magazine: What exactly is a next-generation data center?

Fersht: Most people use the term next-generation data center to describe a variety of more-efficient IT operations. Today’s data centers take advantage of renewable energy sources, better cooling systems, commodity hardware, and efficient systems—management practices that reduce costs and minimize the impact of IT operations on the environment. These new data centers often rely on renewable power such as solar, wind, and geothermal, which has a big influence on where data centers are located. From a functional standpoint, next-generation data centers commonly embrace the concept of virtualization, which refers to the pooling of IT resources such as computing power, storage, and network capacity. These virtual environments deliver more computing power for less overall cost.

Oracle Magazine: What motivates businesses to use these modern data centers?

Fersht: Many businesspeople have realized that the cost of purchasing and maintaining hardware is astronomical. In many cases, 60 percent of total hardware costs are devoted to powering and housing IT equipment. We talk to a lot of clients who are retaining service providers to host their hardware and move it into third-party data centers where they can run it more efficiently. Today’s software applications can be delivered in a hosted fashion, and that’s changing the paradigm as well. Oracle is a major enabler of providing applications through the data center. Offerings such as Oracle On Demand are becoming more cost-effective as networks get faster and more capable of working quickly and securely with offsite operations.

Oracle Magazine: What practical steps can today’s businesses take to reduce waste, conserve energy, and minimize the adverse affects of IT operations on the environment? 

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Fersht: Companies can install power management software to reduce internal energy consumption for desktop PCs and monitors, which consume a lot of power. They can also create a recycling program for used computer equipment. Lots of companies are quick to demonstrate that they are adopting greener business practices, so this market is actually accelerating. We see a lot of adoption of these new data center models. Embracing a sustainability strategy is a major consideration among CIOs, and overall power consumption is a significant factor in locating and managing IT facilities.

Oracle Magazine: What are the benefits of building a green data center?

Fersht: Obviously it’s an environmental responsibility, but there are economic benefits as well. One of the big monetary savings comes from more-efficient use of hardware. Traditionally, software applications are sized for peak loads, which means there’s a lot of extra capacity that isn’t used effectively. Virtualization in the data center has a huge impact on efficiency by using each server more judiciously. By running multiple applications on the same server, average capacity can be increased. This results in fewer servers used, less floor space needed, less transportation and recycling of those servers, and less manufacturing energy expended. Additionally, because many data centers are investing in renewable energy practices, over time these providers will be able to deliver resources less expensively.

Oracle Magazine: What remains to be done to achieve more-efficient, less-resource-intensive IT operations?

Fersht: We need government-driven mandates to encourage responsible data center practices, perhaps driven by tax breaks that reward companies for using data center resources efficiently and adopting renewable energy sources. There’s clearly a drive to invest a lot of money in renewable energy, and the data center is one area where that can be addressed immediately.


David Baum
( is a freelance business writer based in Santa Barbara, California.

AMR Research ( provides advisory services and networking opportunities to operations and IT executives in the consumer products, life sciences, manufacturing, and retail sectors.

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