Higher Ed, Lower Costs: Colleges Remake Data Centers
Driven by the lean economy, large enterprises have been cutting data center costs for the past three years, but higher education has generally not followed suit. This year, that looks to change.
Wed, February 17, 2010
CIO — Driven by more austere state budgets and shrinking endowments, universities and colleges are looking for ways to improve the efficiency of their data centers. For technology vendors, that push could mean big business.
In the past two years, two significant sources of incomes for schools have dried up. Declining tax revenues have forced 43 states to cut their budgets, at least 37 of which are reducing their assistance to public universities, according to a report by the Center on Budget and Policy Priorities. Endowments are similarly suffering, with the average university's fund losing nearly 19 percent of its value in 2009, according to the recently released NACUBO-Commonfund Study of Endowments (NCSE).
The combination has led to pressures on the operations staff, including IT departments, at colleges and universities across the United States, says John Bennett, worldwide lead for Hewlett Packard's (HPQ) data center transformation solutions group.
"The issues in state budgets are 18 months old," Bennett says. "They (schools) have been more reactive to this than many businesses have been. Many of them are just coming to these conclusions."
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The federal government has, for the most part, not come to the rescue: Most universities and colleges are not seeing stimulus funds, according to Thom Rubel, vice president of IDC Government Insights. "They are not enjoying new money, with the exception of some higher educational institutions who might see some money out of research dollars in some stimulus funds," he says.
For enterprise technology firms, the trend bodes well for sales. Reduced budgets have left higher-education CIOs looking for ways to cut costs and many schools continue to run their data centers inefficiently, which means that more modern equipment, cooling infrastructure and monitoring systems could result in immense savings. Moreover, cutting costs in the data center does not mean losing capabilities, says HP's Bennett.
"The increases in efficiency of servers, generation over generation, is pretty stark," he says. "The current [HP ProLiant] G6 servers, if you compare them to the servers from 10 years ago, you can replace them at 10 to 1, save $3,000 a year and still have room to grow."
One client, the University of Utah, reduced energy costs by 25 percent, paying back their modernization efforts in three months, HP's Bennett says.
"If you can have an ROI in the same planning period, it is a significant bonus," he adds.
