Like it or not, energy is the yardstick by which data centers are now measured\u2014and many are coming up short.\n\nBetween 2006 and 2007, the energy required by data centers jumped more than 13 percent, according to market researcher IDC. In fact, the cost to power and cool installed servers has doubled since 2000 and is expected to reach almost $40 billion annually by 2012, predicts IDC. \n\nWith high oil prices still fresh in recent memory, companies have focused on driving data center costs down through greater efficiencies. The starting point for the discussion is always reducing the energy requirements, but the need to save energy forces companies to change how they handle their data requirements, says Rich Lechner, VP of energy and the environment for IBM. \n\n"What they are finding is that for every dollar that they save on energy, they can save another six or eight dollars on operational efficiencies," Lechner says. 1. Bad Economy Not Slowing Hunger for DataEnergy requirements will not slow with the economy: The demand for data centers is growing, even in the current downturn. \n\nIn its Green IT study, IBM found that 60 percent of mid-sized companies expect to run out of processing power or storage capacity this year. \n\nEven companies that have never considered data centers in the past, are doing so now, because of the economies of scale, says Lechner. \n\n"Customers are, in fact, not decelerating their investments in this area, they are accelerating their investments, because of the payback," he says. \n\nFor companies that already have data centers in place\u2014including many older facilities that were not planned efficiently\u2014current economic conditions offer hard choices: Build more efficient facilities, renovate the existing facilities with efficiency in mind, or outsource data center needs. \n\nThe trend is not clear yet, whether more companies will decide to lease their computing requirements, says Michelle Bailey, vice president of market researcher IDC's Enterprise Platforms and Datacenter Trends group. \n\n"Data centers have a larger lifecycle to them, so things don't change dramatically," she says. "The need to go to a refresh is pretty profound for a lot of customers." 2. Energy's Only Becoming More ExpensiveSure, oil is cheap now, but $140-per-barrel oil prices are still fresh in executives' minds. \n\nThe fear of another spike in energy prices has many companies considering ways to make their data centers more efficient, said Rhys Amarilli, director of managed services for Tata Communications' European global services division. His company currently has data center facilities taking up almost 1 million square feet of space, and plans to invest more than $2 billion to expand their capabilities to serve customers' data requirements. \n\n"Data centers consume a lot of power, they really do," Amarilli said. "I know efficiency is high on people's agenda." 3. Location Problem ContinuesBecause of a data center's energy requirements, finding the ideal location can turn into a riddle. The energy infrastructure has become overtaxed in many parts of the world\u2014 and not just in developing countries. \n\n"There are parts of the world \u2014London and New York\u2014 where it is impossible to get more power from the grid into their data center," IBM's Lechner says. "It is not an environmental issue; it is an access issue." \n\nThe problem extends to current data facilities as well: More than half the companies polled in a recent study suffered an outage in 2008 due to a power or operational issues, Lechner says. \n\nHow are companies creatively tackling the location problem? For a look at an impressively green data center built from a former church in the Boston area, see "Built Green, Built Right".)4. Carbon Restrictions FearedWhile there is no cap-and-trade system yet, some executives fully expect one. \n\nTata Communications expects both Europe and the United States to have a cap-and-trade system in place in the next five years. U.S. President Barack Obama has already proposed such a system in his 2010 budget. \n\n"Everyone is looking at a reduction in carbon footprint," says Abid Qadiri, VP of data center services for Tata Communications. "It just depends on where they are on the evolutionary spectrum." \n\nIBM's study agrees. The information-technology giant found that 82 percent of executives felt that climate change legislation would impact them in the next five years. 5. Companies Want Green ImageEven without a tax on carbon production, business executives are focusing on going green for its public relations value. \n\nIn addition to reducing energy costs, green initiatives at companies sell well with customers, says IBM's Lechner. \n\nIn its survey of executives, the company found that 80 percent of CIOs felt that having a green agenda would positively impact impact their ability to succeed in the marketplace. Information technology accounts for 2.5 percent of energy use and carbon dioxide emissions world wide and is growing 12 times faster than energy use at large, he says. \n\n"There is lots of room for improvement," Lechner says.