Monthly Archive for June, 2008

There’s an interesting post over at the Green Datacenter Blog which references an article on computing.co.uk.

In it, the CIO for DTZ Holdings, a large real estate management company, recommends that customers stay away from per kWh pricing for colocation services for the moment, stating that due to the volatile energy markets at the moment customers may be exposed to massively increased power bills which they can’t forecast and budget for.

He’s heading in the right direction, but misses the central point. Colocation providers should exist to provide a colocation service to customers – their job is not to hedge their customer’s expenditure against price increases on energy markets. If colocation suppliers assume that extra risk then they’re actually hurting their customers – if the customer has no visibility or exposure towards the energy use of the equipment they’re using then there is no incentive for them to use more energy efficient kit, and colocation companies will just be charging more to cover their bases anyway.

Power Distribution Unit

In any case, customers are proactively coming to us and asking for pricing on a per kWh basis. It’s the only sensible way to compare pricing from different facilities which operate at different power densities. Customers don’t look at their requirements and say “well, it’s obvious that we need 500sq ft”. They look at their requirements and say “well, that’s 60kW of IT load, what do we need in order to support that?”.

We’re by no means the biggest colocation provider in the world, but even at an average load of 1MW at the moment, we still eat through around 730,000 kWh of electricity per month. Anything we can do to lower that figure is both good for us on a financial basis, and is good for the environment. As such, all of our large colocation deals specify a rental figure for the floor space, which tends to be fixed over a period of time (with RPI+X% capped increases once per annum), and a separate figure for kWh of power used, which is backed off against the utility power charges. We make our money from the colocation service itself, not from marking up power charges!