What is a Watt Worth?

That’s why every business and IT organization needs to be asking: What is a watt really worth?

Yes, a watt is a watt is a watt – until an organization evaluates the cost savings associated with reduced energy consumption in the context of its data center operations. Then, organizations begin to identify and acknowledge the tradeoffs and decisions to make when tackling the energy challenge. While more energy efficient hardware will create opportunities to save on energy costs, there may be upfront capital expenses to recoup before you begin reaping the savings benefits. For example, an upfront platform investment for a power upgrade from Platinum efficiency PSU to Titanium efficiency PSU would reduce energy consumption, operating expenses, total cost of ownership and carbon footprint over the platform’s lifecycle.

Data center environments are complex. Addressing sustainability and cost saving goals include aspects beyond adopting more energy efficient hardware. If power management settings could save 100 watts, for instance, how is that savings considered in the context of some corresponding performance tradeoff? What is a reduction in performance worth to an organization when compared to the financial savings, or how does an organization consider the financial savings from a 100-watt reduction when some performance is also reduced?

Regardless of how energy efficient a data center becomes, power will always be the biggest contributor to its environmental footprint. And, of course, not all energy sources have the same cost, and costs can vary greatly by region based upon availability and adoption of more sustainable energy supplies.

The ability to transition to cleaner energy sources will have a dramatic impact on both costs and carbon footprint for organizations with sustainability goals. Unlike electricity generated by high carbon fuels (e.g., petroleum, coal, natural gas), renewable sources of energy offer both a sustainable and cost stable option to meet carbon footprint goals and lower ongoing OpEx.

At the same time, renewable energy sources such as solar and wind bring upfront capital expenses associated with the installation of infrastructure to generate the power needed for data center operations. What a watt is worth will not only depend on where a data center’s power is sourced, but also how a business wants to balance carbon footprint goals with the near-term capital requirements of moving to renewable energy.

The value of a watt – and determining what a watt is worth to an organization – comes down to understanding the tradeoffs it’s willing to make. Let’s look at one example: power supply for servers (PSU). A Platinum power supply at 94% efficiency and a 500-watt load will consume 532 watts from the wall, while Titanium PSU at 96% efficiency will consume 521 watts at the wall, an 11-watt savings. When you consider this at a rack or data center level, the total power savings can be significant. For example, if the data center deployed 20 platforms per rack and had 10 racks, the total power savings would be 2.2 kilowatts. These power savings can reduce energy costs, or organizations could repurpose them to deploy more IT gear within the same power footprint. On top of that, consider the data center’s power and cooling overhead for the IT load, often referred to as power utilization effectiveness (PUE). The average PUE in 2022 was around 1.6, so the 2.2 kilowatts saved becomes 3.52 kilowatts saved from the utility.

When you look at the server’s total cost of ownership, which includes lifecycle and operating costs, the value of the more expensive Titanium PSU becomes clearer. That’s when you can truly determine the cost of a watt in the context of your IT operations and the long-term financial impact.

Dell PowerEdge servers continually introduce features for improved energy efficiency, giving organizations options to manage costs while also doing more work (performance) with higher efficiency (performance per watt) than previous generation servers. Combined with the ability to incorporate cleaner energy sources, organizations can have real impact on their carbon footprint and CapEx vs. OpEx considerations.

Answering the question, “What is a watt worth?” will vary by the nuances of a business, geographic region and organizational sustainability objective. It requires understanding the short- and long-term tradeoffs of IT hardware decisions, which is why Dell is committed to delivering products and solutions that help businesses attain their unique sustainability, energy efficiency and cost savings goals.

To learn more about how our ISG solutions are helping to increase sustainability in the data center, click here.