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Data center modernization is a coordinated effort to update IT equipment and the power, cooling, airflow, and operating practices that support it. The right mix depends on workloads, rack density, climate, water availability, reliability needs, and the existing facility; replacing servers alone does not guarantee lower total energy use.
What data center modernization includes
A data center is a coupled system. Servers, storage, and networking consume electricity and release heat; electrical and cooling infrastructure must support their loads, while operators must keep the whole facility reliable. A change in one area can affect the others: more efficient IT may reduce power and heat, while denser equipment may require changes to power delivery, airflow, or cooling.
The U.S. Department of Energy’s Federal Energy Management Program (DOE/FEMP) covers IT equipment and its environmental conditions, airflow, cooling and electrical systems, heat recovery, and measurement in its Best Practices Guide for Energy-Efficient Data Center Design, dated July 26, 2024. It cautions that no single design is best for every facility. The guidance is intended for a range of scenarios; local codes, utility conditions, and facility requirements still govern a project.
How to plan a modernization
Start with the workload and the facility, not a preferred piece of equipment. DOE/FEMP’s guidance treats IT efficiency and environmental conditions as early considerations because they can affect mechanical and electrical systems downstream. A practical assessment should connect capacity needs to the infrastructure that can support them.
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- Define the objective. Establish what the facility needs to improve—such as capacity, efficiency, reliability, or support for denser workloads—and which requirements cannot be compromised.
- Assess current and expected loads. Consider workload, utilization, IT efficiency, required capacity, resilience, and rack density across compute, storage, and networking.
- Check infrastructure headroom. Evaluate electrical capacity, power distribution, rack layout, cooling approach, and operational constraints against the planned IT load.
- Compare site-specific options. Account for local climate and water conditions, lifecycle cost, and the cooling and power changes each option would require.
- Plan implementation and operations together. Include commissioning, maintenance procedures, and operator readiness in the project rather than treating them as post-installation tasks.
Modernizing compute, storage, and networking
Compute: fit equipment to the workload
Compare compute options by workload fit, required capacity, utilization, and IT equipment efficiency. A hardware refresh may change the electrical and cooling load, but it does not automatically reduce total facility energy: the result depends on the equipment, how it is used, and the infrastructure supporting it. There is no universally best server generation for every operator.
Storage: match capacity and performance to the application
DOE/FEMP’s storage acquisition guidance, updated in December 2024, recommends selecting ENERGY STAR-certified data-center storage to match the application. Capacity-optimizing approaches listed in that guidance include thin provisioning, data deduplication, compression, and delta snapshots. Avoiding unnecessary storage capacity can also reduce storage energy use, electrical-infrastructure losses, and the heat the facility must remove.
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Storage media involve performance and cost trade-offs. DOE/FEMP notes that solid-state drives (SSDs) offer faster read and access speeds than conventional hard disk drives (HDDs), but cost more. That comparison does not make either type the right choice for every application; capacity, performance needs, and project economics matter.
Networking: account for its load without assuming a standard upgrade
Network equipment contributes to IT electricity use and heat, so include it when assessing electrical and cooling capacity. The guidance cited here does not establish a preferred topology, switch, or model-level upgrade. Network architecture decisions therefore need to be based on the facility’s actual requirements rather than a generic modernization prescription.
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Cooling: manage airflow before adding equipment
Improve air management
DOE/FEMP recommends arranging racks to distinguish hot and cool zones and keeping warm exhaust air from mixing with cool supply air. Correcting that mixing can make better use of existing cooling capacity; simply adding cooling equipment without addressing airflow may miss a major part of the problem. A rack cabinet is one example of equipment used to organize IT gear, but the cited guidance does not establish a particular cabinet’s compatibility, load rating, or suitability for an enterprise installation.
Use economizing where the site permits
Air-side economizing uses suitable outdoor air in place of mechanical cooling when conditions allow. Whether it is appropriate depends on climate, outdoor-air quality, humidity tolerance, and control strategy. Water-side economizing can bypass or reduce chiller load when the system is configured for it. These are site- and system-dependent approaches, not guaranteed savings measures for every data center.
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Consider liquid cooling for dense AI retrofits—but treat examples as scenarios
Higher-density AI equipment may prompt a cooling redesign. ASHRAE’s AI Data Center Energy Performance Framework describes hybrid retrofit systems that use direct-to-chip liquid cooling for processors alongside existing computer room air-conditioning or air-handling systems (CRAC/CRAH) to handle residual heat. Its guidance also addresses power transients, structural review, commissioning, and workforce readiness.
ASHRAE’s rack-density, power-spike, and equipment-weight figures describe scenarios in its framework; they are not universal thresholds or specifications. Whether liquid cooling is needed depends on the equipment and facility design. A retrofit assessment must also consider the existing cooling system, electrical capacity, structural constraints, commissioning, and the staff who will operate and maintain the new setup.
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Compare options using both facility and workload measures
For a meaningful comparison, use the same workload and capacity assumptions for each option. Consider the following factors together rather than treating any single efficiency score as a complete verdict.
- IT: workload fit, utilization, equipment efficiency, required capacity, and resilience.
- Facility: rack density, electrical headroom, airflow, cooling approach, and heat-management requirements.
- Site: local climate, outdoor-air quality, water conditions, and applicable requirements.
- Project: lifecycle cost, commissioning, maintenance procedures, and operator readiness.
DOE/FEMP defines power usage effectiveness (PUE) as total facility energy divided by IT equipment energy. Water usage effectiveness (WUE) is site water use divided by IT equipment energy, expressed in liters per kilowatt-hour (kWh) in its guidance. Both can help track facility performance, but neither by itself explains the value of the workloads delivered, resilience, or every environmental impact. Interpret them in context, including climate and water availability.
A storage cost figure—and what it does not mean
DOE/FEMP’s 2024 guidance gives an illustrative break-even premium of $525 in 2023 dollars above the less-efficient model for a specific 1,500-terabyte (TB) ENERGY STAR-certified data-center storage system: under the page’s assumptions, a more efficient system could cost that much extra and still save money. Those assumptions include U.S. federal electricity prices as of July 2024, a five-year product life, and efficiency data from December 2024. This is an example for that modeled system, not a current market price or a general estimate of storage-project savings.
Modernization includes ongoing operations
Power and cooling changes have to work as designed after installation. Commissioning, maintenance procedures, and training operators to handle new equipment are part of modernization, especially when a retrofit changes how cooling systems interact or introduces liquid cooling. Planning these operational requirements alongside the hardware and facility changes helps ensure the upgraded systems can be maintained and used as intended.
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