Data Center Actions That Your CFO Will Love

1. Bob Tierney IBM, Site and Facilities Services March 26, 2010 Data Center Actions That Your CFO Will Love

2. Key messages • The data center environment needs to adapt to be more flexible and cost-effective to meet the unpredictable needs of business and IT. • Simple actions can yield significant operational and capital cost savings. • We are deploying solutions with clients and within IBM. • We can help you determine how to get started.

3. Customers’ challenges are driven by the following… Increasing IT demand Continued cost pressure Responsive to change 20x 18% 6x 69x Growth in server and storage shipments this decade. Technology density increase in servers this decade. Increase in data center energy costs in next year. Of data centers were built before the dot com era (>7 years old). 78% 75% 85% Of CIO’s anticipate a strongly centralized infrastructure in 5 years. Of distributed computing capacity sits idle. Of IT workloads may be cloud-enabled. 5-60%

4. We can help clients in three simple ways.

5. Extend the life of the hardware, software, and facilities. Actions for cost savings with immediate paybacks. Range of cost savings Optimize IT infrastructure Virtualization provides TCO savings. Reduce costs and complexity with 30-40% TCO. Leverage energy efficient IT technology. Reduce on-going IT energy costs over 30%. Optimize data center infrastructure Get the facts with an energy assessments. Reduce costs 15-40% with < 2 year payback. Add cooling capacity with High Density Zone. Cost effectively adopt new technology at up to 35% less than site retrofit. Optimize IT and data center infrastructure Monitor and manage energy use. Integrate IT, data center, and buildings energy consumption to save 15-30% a year. HIGH LOW Server & Storage Virtualization ClientVirtualization EnergyEfficientHardware Data CenterOptimization SoftwareEnergyManagement 0% 40% 60% 20% 80% 100%

6. IBM Lexington case study of an existing data center.Smart execution allowed for 8x IT growth in the same energy footprint. • 2x growth in number of servers • 8x growth in IT capacity • 10x increase in asset utilization Compute Resources Measure and Manage • Establish baseline energy use • 20x more servers than needed Virtualize • 15-20% power savings from actual usage Best Practices • Right size infrastructure to virtualized IT workloads Diagnose Improved Operations • 10% improvement from less over cooling

7. Rationalize IBM’s data center infrastructure.Smart transformation has delivered cost savings and operational efficiency.

8. Rationalize your data center infrastructure.Optimize to adapt to market pressures and changing business requirements. • Reduce operating costs by up to 50 percent • Reduce operational complexity and improve adoption of new virtualization technologies • Meet business continuity requirements through reduction of outages and data loss • Design for flexibility to meet dynamic business requirements • Reduce time to deploy new technology from months to weeks Establish Baseline Decision Model Current State What-Runs-Where Application Growth Forecast Strategic Modeling Physical Infrastructure Threshold Analysis Tactical Projections Relocation – Build - Lease Future State Alternative Scorecard Resiliency Rationalization Alternative Cash Flow Execution Roadmap Future State What-Runs-Where Board Level Deliverables Transition Plan PMO Guide

9. Rationalize to fewer centers for operational efficiency.A major Chinese bank realized $180M savings and improved operational efficiency from data center consolidation. Client requirements • Reduce time to market of new applications • Reduce overall costs, improve resiliency and security Solution • Consolidate 36 mainframe data centers to 2 • Establish enterprise command center Benefits • US$180 million annual savings • Improved time to market of new banking services • Security-rich environment; 99.95% availability

10. New data center infrastructure decisions. Data center requirements Business objectives • Meet business and IT growth • Align capital and operating costs • Flexible to support new technology • Faster time to deploy • Reduce risk • Security • High availability1 • Provide required capacity1 • Optimize capital costs • Maximize scalability • Maximize flexibility for technology and computing model adoption • Minimize capital and operational costs • Maximize scalability • Maximize flexibility for technology and computing model adoption • Minimize capital and operational costs • Digital Realty Trust; Emerging Trends in the data centre market, DCD London, November 2007; US EPA Study, August 2007

11. Defer 40-50% of the lifecycle costs by implementing modular data centers to align business and IT requirements. Data center capital costs 60% costs from mechanical / electrical systems Pay as you grow Modular approach aligns capacity to business need 3 Mechanical 20% 2.5 Instrumentation & Controls 4% Fees24% 2 Power (range of kw) 1.5 Power 36% 1 Fit-Up Costs 9% 0.5 Shell 7% 0 6 1 2 3 4 5 7 8 9 10 Year Source: IBM Estimates

12. Energy Cost Staffing Bldg. Maint. & Mgmt. R E Tax Optimize lifecycle costs & reduce operational costs by up to 50%. $250 Example: One 20,000 square footdata center $200 • Cumulative cost to run a data center • 10% annual energy increase • Data center operational costs are 3-5 times the capital costs • 75% of operation costs is for energy $150 Cumulative Cost of Operations ($Millions) $100 $50 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Year Source: IBM Estimates for $50M

13. Design new infrastructure for flexibility with modularity.IBM’s data center family™ solutions align to your business and cost objectives. High densityzone. Portable modular data center. Scalable modular data center. Enterprise modular data center. Defer 40-50% of capex and opex cost. Up to 20% less than traditional designs. Fully functional data center. 35% lower cost than site retrofit. • Rapidly deploy in 12-14 weeks. • Without impacting operations. • Standardized design starting with modules as small as 5,000 sq ft • Save up to 50% operational costs. • Turnkey center for 500-2,500 sq ft. • Implement in 8-12 weeks. Watch a video at :http://www-03.ibm.com/systems/data/flash/dynamicinfrastructure/datacenterdesignsolutions/

14. Design for flexibility in enterprise class data centers.Pay as your grow: align costs to IT needs with enterprise modular data center. Meet unpredictable business and IT growth • Enable 3x power & cooling growth at one-third cost • Up to 12x power and cooling capacity growth Align capital and operational cost to IT needs • Defer up to 40% capital costs until required • Defer up to 50% operational costs until required • As much as 50% energy savings Provide available and predictable operations • Provide expansion without downtime to operations • Provide standardized operating environment Design to an “open architecture” • Integrated leading vendor's capabilities • Opportunities for OEM innovation

15. For more information

16. Leverage IBM’s experience Green IT:www.ibm.com/green For CIOs::www.ibm.com/cio For facilities managers: www.ibm.com/services/siteandfacilities

17. Rationalize to fewer centers for operational efficiency.Bryant University realized major savings from reducing server room sprawl. Scalable Modular Data Center Servers & Virtualization Scalable Modular Data Center Servers & Virtualization Energy Management Software 26% 30% reduction in capital spend reduction in operational spend 15% time savings in operational overhead annual energy savings 21% improvement in service delivery 12-15%