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Green Is the New Black

Wall Street Firms Reduce Data Center Energy Consumption

When we heard that Bank of America is installing -- brace yourselves, gentlemen -- waterless urinals in the "green" skyscraper it's building near Bryant Park for its investment banking operation, we realized that Wall Street is starting to take energy and water conservation seriously. Not that we've come across many tree-huggers on the Street, but for very practical business reasons, technology executives are looking to reduce the power consumed by their data centers -- the primary electricity guzzlers in any company -- even as their computing needs grow.

"So watt," you say? Following are five reasons why you should care about the megawatts of energy flowing through your data centers:

1. The amount of juice soaked up by giant server farms is growing fast -- it literally doubled between 2000 and 2005, according to a report out of Berkeley National Laboratory. And power consumption by the world's data centers is predicted to increase by an additional 40 percent by 2010, the research found. The growth is fueled by the increasing number of installed, low-end volume servers -- typically systems costing less than $25,000, including racks of blades -- more than the actual energy usage per server.

"Data centers have voracious appetites for the consumption of electricity," confirms Mark S. Nicholls, corporate workplace executive at Bank of America. One culprit is overcooling: In a 2006 study of 19 U.S. data centers, the Uptime Institute found that, on average, they were cooled nearly twice as much as necessary.

2. New York City's power grid is struggling to keep up with such increased power consumption by data centers alongside the city's housing boom and the proliferation of new electronic devices in offices and homes. (See related sidebar, "Don't Panic, but the Grid's Going Down," opposite page.) "In places like Manhattan, there are times when you can't get additional power for a data center at any price," relates Forrester analyst Chris Mines. "The Wall Street firm says we want to expand our data center; the utility says we can't bring you any more juice."

3. Wall Street firms are under pressure from shareholders, environmental groups and local municipalities to reduce carbon emissions for their own properties and for those in which they invest. For example, the Wall Street Journal reported that in February members of the Rainforest Action Network demonstrated outside several Merrill Lynch offices to protest the firm's raising money for some planned coal-fired power plants in Texas. However, the same article reported the opposite problem for Goldman Sachs -- shareholders are complaining that its environmental good deeds, such as donating land for a nature preserve in Chile, are a waste of money. In some cases, there's pressure from within to become more green -- for instance, Credit Suisse has begun evaluating IT managers according to how well they've helped reduce energy use.

4. As firms suffering the effects of the falling housing market and subprime loans seek to cut overall costs, one place to look is the escalating energy bill.

5. The Environmental Protection Agency will soon begin a six-month study of power consumption in data centers and plans to issue guidelines for both the public and private sectors.

For all of these and perhaps other reasons, Wall Street firms are trying to conserve energy in their data centers. Some, such as the New York Stock Exchange, are working to consolidate systems and achieve efficiencies in software as well as hardware, bringing about fewer overall CPUs and lower energy use. Many, including Credit Suisse, are turning to virtualization to make better use of existing servers and storage, and eliminate excess. A few -- such as Bank of America, Goldman Sachs and Merrill Lynch -- are constructing green buildings.

At least one -- Morgan Stanley -- is volunteering for energy curtailment programs. HSBC is building a data center near a hydropower plant. Dozens of firms are collocating parts of their data centers in exchanges, collocation facilities or with on-demand computing providers such as IBM, HP and Sun. And many firms are investing in energy-efficient lighting, air-conditioning and heating to decrease energy consumption and become more environmentally friendly.

A Greener Big Board

Between its mergers with Euronext and Archipelago and the advent of electronic trading, power demands at the New York Stock Exchange, the world's largest stock exchange, have never been greater. On any given day, its exchanges process hundreds of millions of orders, each with three to five associated messages. In its options business, the NYSE is fed, at peak times, more than 1 million quotes per second, all of which have to be processed and then saved. And customers, wanting to get closer to the exchanges and approach zero latency, are collocating their servers on the NYSE's floors.

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