Ping Power Pipe – Common Spending Mistakes

Spend Matters welcomes another guest post from NPI, a spend management consultancy, focused on delivering savings in the areas of IT, telecom, transportation and energy.

To say that demands on the data center are increasing would be an understatement. Cloud computing, content streaming, new devices and increased mobility have turned the data center into the epicenter of enterprise IT spending. A majority of this spending falls under the collocation staple categories of Ping, Power and Pipe -- categories that represent millions of dollars of overspending.

If you want to reduce data center costs, take these spending mistakes into consideration:

Don't assume fewer servers decrease costs. Fewer servers may increase power costs, and your power requirements determine how much space you need. To that end, ensure your data center is rated >150 watts/square foot for maximum efficiency.

Don't assume 95th percentile billing yields the most competitive rate. The 95th percentile is a widely-used formula that network providers use to understand how much of their over-subscribed network is being utilized and, therefore, an acceptable billable rate. For some companies, it works to their financial advantage as it allows for un-penalized overages. However, for others it represents overspending. Understand your actual inbound/outbound traffic rates and leverage those numbers in negotiation.

Don't assume you have to buy bandwidth from the datacenter. Bring in an outside ISP. In the very least, you'll create more price competition to secure better pricing and terms.

- Heather Barclay, Data Center Expert, NPI

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