This is one example of a research assignment I completed for my Enterprise IT Architecture course. I was presented this business case: A small, but quickly growing manufacturing company was having problems with its data center. It spent too much time offline. While the data center was down, the company could not create, process, or ship its products. I created a solution that decreased system downtime and created exceptional financial benefits for the company. My solution is explained below.
The Benefits of Upgrading to a Tier III Data Center
We could earn a net benefit of $34.2 million over three years if we upgrade our data center from the Tier I to the Tier III standard. Implementing a Tier III data center would decrease our downtime because it would increase component redundancy and independence. Over 3 years, it would cost the company $38.1 million to transition to a Tier III data center.
A Tier III data center uses redundancy and independent components to decrease the risk of downtime. For example, a Tier III data center has multiple sources of power. If the main source of power stops, expectedly or unexpectedly, another source of power immediately turns on. Having backups ready to deploy in an emergency reduces overall downtime. Additionally, a Tier III data center is made of independent components. One component can be removed or repaired without affecting data center operations. Continual maintenance decreases overall downtime.
Including cost of installation and maintenance, this new data center will cost $38.1 million over 3 years. However, we would earn a total benefit of over $72.3 million in downtime costs over 3 years if we switch to Tier III. The net benefit of implementing a Tier III data center would be $34.2 million over 3 years.
|Downtime||$ 14,800||per minute|
|Implementing a Tier III Data Center|
|Year 1||Year 2||Year 3||Total|
|Installation||$ 35,000,000||$ –||$ –||$ 35,000,000|
|Maintenance||$ –||$ 1,555,776||$ 1,555,776||$ 3,111,552|
|Total Cost||$ 38,111,552|
|Cost of Downtime Comparison|
|Availability||Downtime (%)||Downtime (min)||Downtime ($)|
|Tier I||99.67%||0.33%||1734.480||$ 25,670,304|
|Tier III||99.98%||0.02%||105.120||$ 1,555,776|
|Benefit||$ 24,114,528||per year|
|Total Benefit||$ 72,343,584||over 3 years|
|Net Benefit||$ 34,232,032|
Cecci, Henrique. “Select the Right Data Center Design Standard to Reduce Risks and Save Money.” Gartner, 10 Mar. 2015. Web. 15 Feb. 2016.
Pultz, Jay E., Federico De Silva, Naveen Mishra, Henrique Cecci, Tiny Haynes, David J. Cappuccio, and April Adams. “Critical Capabilities for Data Center Infrastructure Management Tools.” Gartner, 24 Dec. 2014. Web. 15 Feb. 2016.
Turner, W. Pitt, IV, and John H. Seader. “Data Center Site Infrastructure Tier Standard: Topology.” Uptime Institute, LLC (2012). Web. 15 Feb. 2016.