By Simon Jesenko, co-CEO at Iceotope Technologies
The significant challenges we face today—climate change and the rapid advancement of Artificial Intelligence (AI)—call for creative solutions. As AI alters the landscape at an unprecedented pace, it is reshaping technology, energy use and the economy. These areas are deeply interconnected, each influencing the other.
AI is pushing enterprises to quickly adopt new technologies to meet the growing demands for computing power. It’s also expanding the range of people involved in data center decision-making. What used to be choices made solely by facility teams are now discussions that include IT and the C-suite, reflecting a shift toward comprehensive business-wide strategy rather than isolated departmental decisions.
The C-suite’s involvement is critical to grasping the strategic impacts and advantages of embracing new technologies, from improving cost-efficiency to gaining a competitive edge and promoting environmental sustainability. The CFO plays an important role in these discussions, offering a financial perspective that complements the technical expertise of the data center teams. While they may not always be deeply familiar with the technical details, their input is particularly valuable regarding decisions that impact long-term costs and investment, such as cooling technologies.
The Costs of Air-Cooled Data Centers
Air-cooled data centers have long been the industry norm. However, with rising compute densities and increasing environmental concerns, traditional air-cooling systems are approaching their limits. Constructing these systems involves major upfront investments, requiring large HVAC units and extensive duct networks. In addition, the operation of air-cooled data centers is energy-draining, leading to expensive electricity bills and frequent maintenance.
Companies forfeit the benefits of modern, more efficient technologies by sticking with air cooling. Liquid cooling drastically cuts energy and water usage while also reducing the expenses associated with designing, building and operating data centers.
While traditional data centers consume significant amounts of water for cooling, with a small 1 MW facility using up to 6.6 million gallons annually, advanced liquid cooling technologies, including direct-to-chip cooling, immersion cooling, and Precision Liquid Cooling, have been shown to achieve up to 50% energy savings, support higher rack densities, and reduce water usage by as much as 96%, significantly improving Water Usage Efficiency (WUE) and overall operational efficiency.
Human nature often tends to favor small, incremental changes over larger shifts. While this approach may feel more comfortable, it can sometimes limit innovation and slow overall business progress.
A Call to CFOs: Lead the Charge
CFOs should be encouraged to actively participate in discussions about data center power and cooling solutions. The reason is straightforward: while technologists are experts in their field, they may become too focused on solving specific issues using familiar methods. This narrow focus can make them hesitant to explore new solutions, preferring to stick with tried-and-true methods.
This is where CFOs can play a valuable role. They offer a new perspective when they get involved, emphasizing financial prudence and intelligent investment. CFOs can push technologists to balance problem-solving with the company’s long-term financial goals. Recently, 66% of finance leaders said they expect to increase spending on IT and digital transformation in the next year. And, 58% say they are dedicating more time to business performance than they did a year ago.
Advanced cooling technologies offer a clear example of the financial benefits that CFOs should consider. According to a study from STL Partners, such solutions can reduce energy usage by 3-5%, translating to annual savings of up to $40 million for large operators. Additionally, they can cut carbon emissions by over one million tons annually. This makes liquid cooling both an environmentally responsible choice and a financially sound one, reducing operational costs significantly over time.
By actively engaging in these discussions, CFOs can ensure that investments in technologies like liquid cooling align with both the company’s sustainability targets and its bottom line.
Balancing Priorities for Success
Progress often requires balancing multiple priorities. Data center strategies must address both immediate concerns and future goals. This requires a broader discussion around the ROI of the capital being deployed. Despite upfront CapEx to deploy liquid cooling, the use of these solutions effectively decreases PUE in the long term and mitigates inefficiencies seen with air cooling. A joint study by NVIDIA and Vertiv published by the American Society of Mechanical Engineers sought to show the impact liquid cooling could have on the PUE of a high-density hybrid-cooled data center. In the most optimal results achieved, the companies obtained up to 27% lower consumption in facility power and 15.5% lower usage in the whole data center when increasing the percentage of liquid cooling used, proving the efficacy of liquid cooling on energy consumption.
While it’s necessary to solve current issues to keep operations running smoothly, it’s just as important to think about the long-term and how today’s investments will lead to future efficiencies and cost savings.
The decisions about cooling technology in data centers are now akin to making a long-term lifestyle change. The right choice of technology isn’t just a short-term solution; it has a lifespan of 15 to 20 years. For this reason, decisions and investments should be approached with a long-term view. While small changes can provide short-term solutions, they may not offer the lasting impact needed to meet long-term objectives over the next two decades.
By encouraging technologists to consider both present and future needs, CFOs can guide the company toward more innovative and cost-effective solutions.
Looking Ahead
CFOs have a key role in shaping discussions around technology, ensuring that technical requirements are balanced with financial responsibility and long-term strategic planning. In fact, nearly three-quarters of CFOs say they expect to have the final say on their company’s technology direction, which emphasizes the evolving role of CFOs in shaping digital strategy. With their focus on the company’s financial well-being and overall direction, CFOs can help ensure that investments in data center technologies are both financially smart and strategically beneficial for the long haul.
ABOUT THE AUTHOR
Simon Jesenko is the Co-CEO of Iceotope Technologies. As an accomplished CFO with over 20 years of experience, he has a proven track record of driving growth and scaling fast-growing SMEs and public companies. His expertise spans corporate strategy, restructuring, international expansion, and mergers and acquisitions.
At Iceotope, Simon leverages his financial leadership and strategic vision to drive growth, allocate capital efficiently, optimize business processes and structure, and position the company as a leader in Precision Liquid Cooling technology for sustainable and advanced computing solutions.
