Flash Paper 1
Implementation of Tier 3 Data Center
Our company can save over 24 million dollars a year with the introduction of a Tier 3 data center. Unscheduled outages to our ERP system are costing us over 25 million dollars a year, and this number can be greatly reduced with the implementation of an upgraded data center.
As of right now our company is using a Tier 1 data center with no redundancy, meaning if any part of our data center goes down there is no backup to prevent a disruption in operation. With the implementation of a Tier 3 data center we will have a center that has n+1 redundancy, which is essentially a form of resilience that ensures system availability in the event of a component failure. A Tier 3 data center is composed of multiple active power paths, meaning that a loss of power to part of the data center wouldn’t result in an outage, but rather a redirection to a separate power path. The addition of at least one backup component will help lower our company’s unscheduled outages and save us more money in the long run.
The project will cost a total of $35 million to implement, however within three years it will pay for itself. As of right now unscheduled outages are costing our company around 29 hours of downtime a year that our data center is non-operational. This equates to almost $900,000 per hour, or $25.6 million dollars a year. With the Tier 3 data center in place we cut the number of hours down from 29 to under two, costing the company approximately $1.5 million a year. This results in a $24 .1 million savings per year after the center is put in place. Our company’s net savings over a three-year period would be $13,229,056, with an ROI of 37.7%. It is clear that our company has to do something about its unscheduled outages, and installing a Tier 3 data center is the answer.
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“Tier Standards Overview | Data Centers | Colocation America.” Colocation America. N.p., n.d. Web. 07 Sept. 2014.