Datacenter Power Efficiency

That split of where the money goes comes directly from calculations and a spreadsheet that James Hamilton has developed. You should check out his Velocity talk for more (about 5 minutes in)

http://www.youtube.com/watch?v=kHW-ayt_Urk

The numbers on the slides modify the assumptions on the spreadsheet at http://perspectives.mvdirona.com/2010/09/18/OverallDataCente...

it depends, I think, mostly on how long you keep your servers: "Data center amortization periods run from 10 to 15 years while server amortizations are typically in the three year range. Servers are purchased 3 to 5 times during the life of a datacenter so, when amortized properly, they continue to dominate the cost equation."

Now, some people say 3 years, but some people say five or longer. The IRS says 5.

Personally, I also figure a 3 year life on servers, which puts my data center (power) costs at about the same as my hardware costs... but I probably pay a /whole lot/ more for data center space than Microsoft, as I buy that 'retail' and I imagine the difference in what we pay for hardware is rather smaller, as I self-assemble (at their scale, it's likely they are paying less for hardware than I am, too... but my operation is fairly efficient when it comes to hardware, and not very efficient at all when it comes to power.) so I can see how for someone who runs their own modern, efficient data center, and who replaces hardware every three years, hardware costs could dominate.