A New Methodology
I’ve been with eBay Inc. since 2009, and even just in the past four years, I’ve witnessed a significant change in the growth and importance of data centers, and the way we, as an industry, measure their efficiency. The Green Grid’s Power Usage Effectiveness (PUE) metric – as well as the water and carbon equivalents of the same metric – have spurred organizations to track and report on these measurements, demonstrating greater data center efficiency for their businesses and in many cases even sparking competition between companies.
The PUE standard for data center efficiency has brought immeasurable benefit to the industry; however, it’s only one piece of a larger puzzle that transcends data centers and energy efficiency. In fact, if anything has become clear over the past several years, it’s that technology decisions are inextricably linked to business performance. We can see more clearly now than ever before that our designs, purchases and operating decisions have real, tangible effects on the key indicators that are important to running a business: cost, performance, environmental impact and, ultimately, revenue. If we believe this to be true – and I certainly do – then we can no longer make choices regarding our technical infrastructure in a piecemeal, isolated, component-by-component manner that ignores the larger context of the decision. And yet the way we analyze and optimize the efficiency of our technical infrastructure – our very ability to measure our value to business leaders and stakeholders – hasn’t, until now, connected these indicators in a meaningful way.
At eBay Inc., we’ve spent the past two years developing a new approach to address this gap. Today, we’re releasing the Digital Service Efficiency methodology, or DSE for short. As you’ll see below, DSE is essentially a dashboard for a company’s technical ecosystem – the data centers, compute equipment and software that combine to deliver its digital services to consumers. Much like a dashboard in a car, DSE offers a straightforward approach to measuring the overall performance of technical infrastructure across four key business priorities: performance, cost, environmental impact and revenue. Similar in spirit to the miles-per-gallon (MPG) measurement for cars, DSE enables executives and technical professionals to see the results of how their “engine” performed with real customer consumption – or, rather, how the ebay.com engine performed as our users drove it. Like its vehicular counterpart, the DSE dashboard equips decision-makers to see the results of their technical infrastructure choices to date (i.e., what MPG they achieved with their design and operations), and serves as the flexible tool they need when faced with making new decisions (i.e., what knobs to turn to achieve maximum performance across all dimensions). Ultimately, DSE enables balance within the technology ecosystem by exposing how turning knobs in one dimension affects the others.
Here’s what it looks like:
In the case of ebay.com, what you see is how we’ve combined all of our customer-initiated requests into two distinct services: buy and sell. DSE measures how many business transactions are completed per kilowatt-hour of electric power consumed for these services. Or put another way, it shows how much energy is consumed to deliver each transaction. Transactions divided by kilowatt-hours reveals the performance of each service. Once these two variables are established, a family of interconnected metrics can be derived to provide further insights for optimizations — for example, the cost per transaction, tonnes of CO2e generated per transaction and revenue created per transaction. See more of these details by clicking around the dashboard for yourself.
With this information, we’re able to see and do things that we simply weren’t equipped for previously. As an example, by using the DSE dashboard, some of our software engineers saw that by slightly decreasing the memory allocated for an application in a pool of servers, they could remove 400 servers from the pool. This insight helped us eliminate nearly a megawatt of power consumption and avoid spending more than $2 million to refresh the servers. This simple software tweak helped us lower power consumption, decrease costs, and increase system performance, ultimately increasing our revenue per transaction. And that’s just one example.
Thinking bigger-picture and longer-term, DSE is enabling us to project forward and build tangible plans for what we as a business need to do today to realize the results we’re looking to achieve tomorrow. In essence, we’re able to balance and tune our technical infrastructure to optimize how effectively it’s driving core business performance. And as business priorities fluctuate over time – envision a scenario in which, say, federal or state climate change legislation passes in a couple of years and we’re forced to be even more aggressive in the way we address our environmental impacts – we have the flexibility to model the various choices and trade-offs we’ll need to face, from an IT infrastructure and operations perspective, so that we can help propel the business forward to achieve its goals.
By releasing DSE, and our corresponding data, our intent is to establish a baseline for 2012 and then to set productivity and efficiency goals for 2013. These are our goals for the year ahead:
- Increase transactions per kWh by 10%
- Reduce cost per transaction by 10%
- Reduce carbon per transaction by 10%
We’ll be updating and reporting out on all of the numbers in the dashboard and on our progress toward our improvement goals each quarter. As we continue on our course to fine-tune our own technical infrastructure, we hope to encourage other companies – particularly those that deliver their services digitally – to explore the DSE methodology and see how it can help expose the business value and performance of their own technical infrastructure. And while each company is different in terms of the services they provide and the variables that can be tuned to balance the cost, performance and environmental impact of delivering those services, DSE provides a framework for how other companies can begin.
Our DSE Solution Paper is just the beginning of what we hope will be an exciting new chapter in how we, as an industry, think about measurement and value. By sharing our methodology and progress, we at eBay Inc. hope to start that conversation. And as other companies are inspired to make their technical infrastructure as efficient and productive as possible, together we as an industry can drive the digital economy to even greater heights.
To comment or continue the conversation, feel free to email email@example.com.
Also posted on Ebay Tech Blog.