Sydney hosting company to charge per kilowatt

Sydney-based hosting company ac3 has started charging its customers on a per-kilowatt basis, moving away from the traditional per-rack rental model.

The company, which if half owned by the NSW Government and several universities, has installed power usage readers to measure how much power each customer uses within the data centre in a given month.

Customers are charged on a per-kilowatt basis according to the average power consumption over the month, to account for peaks and troughs.

"Data centre space is no longer the problem in Sydney. But power per square metre in Sydney at the moment is very limited," said ac3 chief operating officer, Eric Whitehouse. "So we've moved to a model where you pay only for what you use."

The per-kilowatt pricing scheme has a fallback option, however. Should a customer not switch on its equipment at all, they will still be charged a minimum monthly fee of $1100 per rack, which simply reflects the cost ac3 incurs to lease space from data centres at Global Switch and the Australian Technology Park in Sydney. This fee is waived when a customer uses more than $1100 worth of kilowatt hours.

Whitehouse said customers were initially "very wary" of the pricing change.

"We had to agree on a time to install the metering, which required a small outage," he said. "We really had to work with customers to get permission. Needless to say we did a lot of work very early on Sunday mornings."

But customers "now understand" the value of the pricing model.

"We measure usage across the month and charge them an average," he said. "We show them the charts, of their peaks and troughs, and they are then comfortable that if they don't use [power], they don't pay for it."

Preparing for a greener future

Whitehouse said the new pricing model will help customers prepare for a future where excessive power use will come at considerable cost.

Already it has encouraged several customers to use virtualisation technologies and blade servers to fit their operating environments into smaller spaces.

One of ac3's largest customers had some legacy off-the-shelf rack servers "used for grunt" that were "very hot and very inefficient." The customer has now replaced these rack servers with blades and "cut their power usage considerably," Whitehouse said.

"We have also encouraged some customers to adopting the kinds of technology that manages blade servers, such that if a blade isn't required on the load, it shuts down," he said.

"This kind of technology will become very important in the carbon emissions trading environment we are all heading for. It is important we get customers used to that future. They are off-setting their carbon footprint by outsourcing to us, so we need to get customers concentrating on their power use and investing in new technologies to manage it."

For smaller customers, ac3 offers both shared hosting services and virtual servers.

"People unfortunately still argue that you can't run production systems on a VM, but that will change," Whitehouse said.