Robert Heiderscheidt, President & CEOAsk Robert Heiderscheidt, President and CEO of MDI Access, Inc., what he thinks is the next big innovation in the data center industry, and he doesn’t hesitate. “Data center users will begin using financial modeling as the main tool for reducing yearly operation expenses.” It’s the natural consequence of the industry’s limitless appetite for lower costs. “The path to sub $100/kW rates will come from financial modeling rather than value engineering.”
“We’ve seen the industry morph from central offices with densities of 30 watts a square foot, to higher density data centers consuming 300 watts a square foot,” says Robert. “As power densities grew, data center users wanted better operational efficiencies. The equipment has gotten better, air side and water side optimization has helped, and there’s more collaboration between data centers and power companies in terms of energy consumption savings. The only fruit left to pick is lowering operational standards—i.e. increasing data center temperature requirements from 70 degrees to 90 degrees. It’s pretty clear to me the next wave of significant OPEX reduction will come from innovative financial modeling rather than value engineering.”
Robert’s vision for the importance of financial modeling didn’t come to him overnight. It is the byproduct of almost 25 years spent as a design build data center contractor, and more recently, a push into data center development. MDI knows the data center business from every angle. So Robert is convinced you can accomplish more in terms of OPEX reduction through a creative lease agreement than with trendy products like cloud services.
“Cloud services have generated a lot of buzz in the industry recently,” Robert points out. “Dive deeper than the buzz and it’s a less impressive product. Transitioning to the cloud is much harder than advertised. It usually requires a retooling of IT architecture. The cloud also affects your IT staff competencies.
A 1 MW requirement on a ten year lease can save $6 million in OPEX with financial modeling tools
Especially in light of how little control you retain over the infrastructure supporting your cloud service. If you have a small power requirement that’s ok. If you have a power requirement between 500 kW and 3 MW, it’s a different story.”
“Now, consider using a tenant participation lease as a different method for shaving OPEX,” says Robert. “Your company gets custom infrastructure without the hassle of rejiggering IT staff competency or IT architecture. Best of all, your company comes away at the end of the project with a sub $100 / kW rate. On a ten year lease for 1 MW, you’re talking—conservatively—about $6 million in savings this way. If you’re size requirement is bigger than that, the savings only get bigger.”
MDI Access, Inc., has worked with technology companies, colocation providers, MSPs, wireless phone carriers, financial institutions, hospital groups, and Fortune 500 companies alike. Any of them can utilize financial modeling in a data center development. “Will we help a customer with an efficiency study, or an energy savings plan? Of course. But financial modeling is the new tool I’m recommending for every customer who walks in the door with a requirement over 500 kW who has a mandate to significantly reduce OPEX,” highlights Robert. “If you’re changing facilities in the next three years, and have the right sized requirement, financial modeling is for you.”
MDI Access offers design build services, colocation deployment services, data center audits, and future planning services to data center users throughout the U.S.