DCA Review Introduction  

AS WE LOOK FORWARD to the third year of the Data Centre Alliance’s existence we can draw breath on a busy 2013 for DCA members - starting with negotiations in Brussels for Project PEDCA, followed by frantic co-ordination of the grant agreement and project launch, meeting with ministers in Parliament, the New Statesman parts 1 and 2, the DCA “bootcamp” training and the launch of the DCA data centre Certifications scheme. On top of that, the DCA has been ever present at most industry conferences in Leeds, Frankfurt, Dublin, London and Amsterdam. So we begin 2014 optimistically with more members and an even greater work programme for the data centre industry.

This month Professor Ian Bitterlin of Emerson raises the issue of the link between energy efficiency and service availability, one area the industry and its stakeholders need to deal with better, the DCA Certifications aims to highlight where and how this balance has been struck, but as Ian shows you can’t always have it all without some compromises. As growth in economies seems to be restarting and confidence picks up, Louise Barth of Altus Edwin Hill, sheds some light on how to ensure data centre investors can ensure they gain all the tax benefits they are entitled to – of course it’s made never as easy as it should be, but I know from talking to Louise that many simply miss out because of either the perceived complexity or though simply not knowing.

Last but not least this month, Roger Keenan of City Lifeline reflects on the dangers of striving blindly to be masters of our technology, does not always guarantee success.

Pan European DCA Project News (PEDCA)

By Steve Hone, DCA Operations Director.

PEDCA held its Project Coordination Committee meeting at Goethe University of Frankfurt over January 14th and 15th the evening of the 14th provided an opportunity for networking with some Frankfurt’s data centre community organised by the University.

Project PEDCA is now moving towards the end of the initial phase and the initial analysis promises to make interesting reading. After the initial scoping work in September, researchers have begun working on researching existing data centre training and research provision, skills and the technology road map.
In addition, this also includes looking at the various industry influences and putting it all into a regional context. The task in hand now includes bringing all the various tasks together to identify the “requirements” for the “Joint Action Plan” work to begin.

The project will also start to pilot the various ideas for further development in the field. For example, after the DCA “Boot Camp” held at University of East London last August, two further similar activities will be held at TU Delft and Goethe University of Frankfurt (right) the aim is to formulate a sustainable model that can be widely deployed to meet the industry’s needs involving universities, employers, training specialists and local authorities.

PEDCA is an EU commission funded foundation project for the Data Centre industry and we are calling on all industry stakeholders who would like to find out more
about PEDCA. Please visit: www.pedca.eu

DCA Committee news
THE DCA’s Energy Efficiency and Sustainability Steering Group is where members can find out about European and International standards developments and initiatives, much is happening in this areas and I would urge all members to join the group to remain informed and better still help with commenting and development.

Other committees are gearing up for activities during 2014 including Building Information Modelling, Security and Access Control, Anti- Contamination, Relocations and Migrations and DCA Certifications – any members who which to join a group simply log in at
www.data-central.org

Agility matters more than technology

By Roger Keenan, managing director, City Lifeline.

CHANGE HAPPENS. Throughout the history of mankind, not just in London data centres, technology has been the main driver of change. Things that were not possible become possible, and those that make them happen gain an advantage over those that were complacent. That is true of today’s fast moving data communications world. Consider, for example, the way that Nokia went from becoming the world leader in mobile handsets to just another subsidiary of a US corporation. But it was just as true hundreds or thousands of years ago. The tribes that developed stone axes out-competed those that did not when they went after the same food. Then they themselves were out-competed by people who added tin to copper, invented bronze spear tips and could then kill mammoths. Technology change is the way of the world; it’s just faster in today’s wired data centre world. And (to paraphrase Charles Darwin), the winners are not those with the best technology, but those who adapt best to changing technology.

The biggest change of our times is the invention of the computer; its miniaturisation and reduction in cost to almost nothing at all. From that flowed modern information technology, London data centres and car engines that no-one can repair at home. Many, if not most, businesses are their technology and their information assets and very few businesses today would survive for long if they lost those assets. Information technology is no longer something peripheral that the CEO can delegate to the CIO. Information technology is the business and it needs that level of attention and understanding from the CEO.

“Servicisation” is a clumsy word, but it concisely describes an IT-based movement from making things to providing customers with a service which is more valuable than a product. MAN, the German lorry (truck for US readers) maker is an example. Faced with cheaper and successful Far Eastern competition for manufactured lorries, MAN looked at what their customers really wanted. They concluded that the cost of the lorry over its life was less than 10% of the total costs, but that fuel, repairs, drivers and insurances were more than 90%. So they re-focused the business away from making things to providing a total service, based on detailed real-time operational monitoring and analysis in a data centre to help the customer become more profitable. The factory still makes lorries, but they are only a part of the customer offering. MAN used information technology to entirely change the business model, rather than just waiting to be overtaken by cheap competition. It’s not the technology that matters, it’s the ability to foresee, change and adapt, and it can only be done at CEO level. Although it’s about technology, the CIO cannot deliver such change on his own.

Even in insurance, already an ultimate service industry, information technology adds value to extend service offerings. The Co-operative Insurance company in the UK is an example. The Co-op pioneered smartboxes in cars for young drivers, or for anyone whose insurance profile earns them high premiums. The smartbox measures speeds and accelerations in real-time and sends those back to a data centre, where they can be analysed and good driving behaviour rewarded with lowered premiums and bad behaviour reported to parents with increased premiums. Annual premiums become quarterly premiums, but could be any timeframe, including real-time premiums. Again, it’s all about the technology running in the data centre, but such a technology change can only be made from CEO level. The Co-op led because it was visionary and agile.

Organisations respond differently to threats and to opportunities. Often, larger organisations are so inwardly focused on their own internal issues and politics that they fail to see the big strategic picture and they often dismiss the few insiders who can see it, as trouble-makers. Twenty years ago, if you had asked who the largest music company in the world would be twenty years on, almost everyone would have produced a list of music companies – EMI, Virgin, maybe even Sony. In fact, the answer is Apple. The largest music company in the world is not even a music company. Now how about banking, one of the major users of modern information technology and data centres? Is there any reason to believe, that, twenty years from now, the largest bank in the world will be a bank?

And does anyone consider banks to be agile and adaptable organisations with strong strategic vision? The computer, the microprocessor, information technology and the data centre are the industrial revolution of our time. But it isn’t the technology that matters, or that which will decide the winners and losers, or who will get to eat the mammoth and who will starve or be eaten. It’s the vision that organisations have of the way they can use the technology and their flexibility and adaptability in the face of change. Agility in using technology matters more than the technology.

Is ‘resilience’ and ‘operational best practice’ possible at the same time?

By Ian Bitterlin, Chief Technical Officer, Emerson Network Power Systems.
WHEN I SAW the theme for this month’s DCA editorial it occurred to me that pursuing Best Practice in the data centre M&E infrastructure, particularly in the area of energy efficiency, could sometimes actually be in conflict with the pursuit of resilience, if that is defined as a form of reliability or availability.

We all know that in the pursuit of energy efficiency the low hanging fruit is still to be found in the cooling system and, clearly, there are some forms of best practice that are good for energy efficiency and don’t impact reliability, the most obvious being airflow management in the form of hot-aisle/cold-aisle layout, blanking plates and hole-stopping. These three actions are well proven to reduce cooling power by reducing bypass-air and it is clear that reliability of the ICT load is not affected.

However taking air management to the next level, aisle containment, can, under certain circumstances, lead to a requirement of ‘continuous’ cooling due to the volume of conditioned (cold) air being reduced to only that contained in the aisle and under the floor. Those circumstances are heightened when the cabinet load rises above 10kW where a momentary cooling failure will precipitate a rapid climb in server inlet temperature. If (and there are lots of those) the cabinet load is high, the set
inlet-temperature is taken to the higher end of the ASHRAE 2011 ‘Recommended’
or, for the few intrepid early-adopters,
even into the ‘Allowable’ range and the cooling system fails for a few minutes
the temperature can rise quickly to the
point where the server shuts down on
‘over-temperature’.

Clearly there is a link (under extreme conditions) between pursuing energy efficiency and service availability when applying close to 100% air separation without continuous cooling. In addition that ‘continuous cooling’ will have been achieved by adding redundancy, even UPS, and will have degraded the systems’ ability to operate at minimum efficiency.
Widening the thermal limits to those recommended in ASHRAE 2011 also has its risks, both real and perceived. Most people refer to the 2011 Guidelines just in terms of the table of temperature and humidity but the other 40 or so pages are well worth a close read. There you will find links between air-quality, elevated temperature and humidity that predict an increased failure rate of the servers themselves. The ‘perfect storm’ of fresh-air (direct economisation, especially with contaminants such as chlorides and sulphides), high temperature and high relative humidity results in accelerated PCB corrosion and the impact on server failure is enumerated in the Guidelines. One solution (apart from avoiding fresh-air in the room) is to refresh the ICT hardware every 2-3 years but not all users can do that for CapEx reasons even though the server energy costs will drastically reduce at the same time.

Another area for saving energy (admittedly a poor second to the cooling opportunities) is in the UPS system. Here ‘best practice’ (a common topic in both the EU CoC and The Green Grid’s DCMM) would indicate that ‘eco-mode’ is the way to go. Here we have an interesting view on the paranoia that most often regulates our data-centre world: Technically, with the more advanced forms of eco-mode operation (where the grid is used whenever its power quality is within the ITIC PQ Curve), there is no doubt that the technology works and every reason to enable eco-mode saving 3-5% of your ICT load energy.

When the grid deviates (and before that deviation reaches the load outside of the ITIC Curve) the UPS switches back to ‘normal’ on-line operation. Is there a ‘real’ risk? The answer is probably ‘yes, but minuscule’ to the point where it is impossible to measure the increase in failure rate over the typical 12-15 year life of the plant, however the ‘perceived’ risk (the paranoia) is higher. We are clearly at a point where the ever accelerating cost of energy is increasing the adoption-rate of eco-mode but there is still a reluctance to swap the energy saving benefits for a (perceived) degraded resilience.
The bottom line comes down to the pressure for energy reduction balanced against the need to provide the digital services at the Availability required by the business. No data centre was ever built to save its user energy – their prime purpose is to generate or protect revenues that enable profits to be realised and reputations maintained.

In the extremes we have the bank that loses customers because their ATMs keep displaying a ‘not available at this time’ and POS card-readers that decline purchases – they will not survive unless they invest in redundancy and high availability and energy efficiency is a secondary target. At the other end of the scale we have a social networking site whose costs are dominated by the cost of electricity and whose service can ride-through brief excursions that do not negatively impact their users and sponsoring advertisers. The very first question to ask a new data-centre developer should be ‘what is your appetite for risk?’ whilst the second may well be ‘what is your opportunity for maintenance shutdowns?’ rather than ‘what are your energy efficiency expectations?’

Understanding the data on capital allowance tax relief

By Louise Barth, VP, Altus Edwin Hill.

INVESTING IN A DATA CENTRE can be expensive. Whilst in the UK there is currently no special tax treatment for the data centre industry, knowing your way around the capital allowances minefield can bring substantial tax relief benefits. Louise Barth, Vice President of Capital Allowances at Altus Edwin Hill explains how specialist advice on capital allowances can unlock significant savings to companies in the data centre Industry.

The future is bright for the data centre Industry. It is one of the fastest growing sectors within the UK with growth forecast to continue well into the next decade. It is not all plain sailing, data centres are very expensive pieces of kit in their own right. These buildings are packed full of electrical and mechanical systems and consume huge amounts of energy in order to run the equipment, keep it climate controlled and secure.

With a need for companies to meet their financial requirements coupled with keeping stakeholders happy, reducing expenditure and increasing IRR is always a priority. Capital allowance tax relief provides an excellent opportunity for companies in the data centre industry to set aside significant set up and operational costs, and increase profitability. Regardless of whether you are a landlord, tenant or an owner occupier if you have incurred the expenditure, own and use the asset in the course of your business and a UK tax-paying entity, you are legally entitled to claim capital allowance tax relief.

Capital Allowances is a highly specialist subject, using a mix of surveying skill and accountancy knowledge a consultant will carry out a survey of a property to identify all the claimable plant & machinery and review the cost information in order to allocate the correct cost to each individual item. A typical list of plant will include amongst other items - IT equipment, air-conditioning, lighting, power distribution, fire suppression and alarms, UPS, plenums, controls, security systems and backup generators. To the base cost of each item a proportion of the site overhead costs and design fees are also added. The cost of cutting and carving an existing building to install the equipment is also claimable. A good understanding of how a project is procured and executed helps. Consulting alongside the design team at the planning stage or as the project builds out will ensure higher achievable claims.

A new Tier 3 Data Centre costing c£20m to construct on a Brownfield site in the UK could contain as much as £15 million of allowances, this equates to cash savings of approx £3.25m to a company paying corporation tax, almost double this to an individual paying income tax. The allowances, separated into two pools, are written down against the business’s tax liability over a number of years at 18% and 8%. This represents a huge opportunity for investors to recover a significant amount of their outlay.

In order to benefit from these savings allowances are claimed via a tax return. If a business is unable to take advantage of their allowance in the current open tax year, all is not lost as the allowances are carried forward until the business is in a profit making position. Claims can also be made on historic expenditure as long as the assets are still owned and a claim has not previously been made for these assets.

ECA’s – a Green Advantage
Government policy on Climate change offers a generous tax incentive for installing energy and water saving equipment. Enhanced Capital Allowances (ECA’s) provide a 100% relief in the year of purchase so long as the equipment is sourced from the Government approved list (www.etl.decc.gov.uk).

The list includes UPS, generators, BMS, variable speed drives and many components in packaged chillers. Simply put the tax relief jumps from 8% per annum to 100% per annum. What more of an incentive do you need to go green? Aside from 100% relief, ECA’s can help to reduce the bottom line, running costs, energy consumption and the environmental impact of a data centre.

Whilst capital allowance tax relief is a specialist field, and the methodology complicated, it is not necessary for the process of claiming them to be painful. Expertise in this field can unlock significant tax benefits to businesses within the data centre industry.