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Optimizing Data Center Redundancy Using Life Cycle and Cost-Effective Analysis

Abstract

The major questions addressed in this paper are: What is the optimal tradeoff between capital cost and downtime/reliability for a data center? How much redundancy is justified?

Owners of data centers need to choose an engineering design to decide how much capital to spend in order to minimize the life cycle costs and maximize reliability. Data Center costs include the initial capital for building and equipment, electrical usage, equipment maintenance and periodic upgrades. Downtime can be measured in hours or in monetary terms.

A case study will be presented to explore the problem of optimizing data center redundancy. Capital and operating estimates will be provided by a major engineering design firm. Downtime for each design was estimated by a nationally recognized source.

An overall decision process is presented which combines cost and benefit estimates with economic and non-economic analyses to arrive at an optimal solution. Three decision process scenarios are identified that are caused by how downtime is measured and whether downtime is considered a dependent or independent attribute in the final decision. One scenario is presented in the paper that uses After Tax Analysis (ATA) to estimate the Life Cycle costs (EUAC) without downtime included and downtime (hours per year) as an independent variable. This scenario uses Cost Effective Analysis (CEA) as the decision analysis approach.

The ATA decision process described could be used in an engineering economy course. The scenario could provide a practical example for when and how to use various Figures of Merit (FoMs) and associated decision processes.

The case presented illustrates limitations in teaching engineering economics. One limitation is that decision processes like CEA and Multi-Attribute Analysis (MAA) are generally not taught to undergraduate engineering students; they are only covered in some graduate engineering programs. Yet, as this case illustrates, these techniques are important to select among various engineering designs and to make capital selection decisions.

Future research efforts are identified that will more fully explore the case presented.

Keywords: Capital Projects, Cost / Benefit Estimation, Data Center Redundancy, Life Cycle Analysis, Cost-Effective Analysis, Multi-Attribute Analysis, Engineering Economics.

Introduction

An organization’s computer network is critical to the operation of the enterprise. While the attack on the World Trade Center may be a dramatic example of how the loss of a computer

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Merino, D., & Carnemark, J. (2008, June), Optimizing Data Center Redundancy Paper presented at 2008 Annual Conference & Exposition, Pittsburgh, Pennsylvania. 10.18260/1-2--3524