Problem with choosing a path of cost reduction for greening a data center, the end leads to bankruptcy

I am reading a book on FedEx.

Changing How the World Does Business: Fedex's Incredible Journey to Success - The Inside Story

The author is a distribution logistics expert.

About the Author

Roger Frock has conducted numerous projects and workshops dealing with the subjects of transportation networks, logistics operating systems, and responsible and ethical management during his years with A.T. Kearney, as a part of the decade with Federal Express. He has been a guest speaker at the National Council of Physical Distribution Management amoung others on a variety of subjects.

One of my first passions after college was in distribution logistics when I worked at HP and at that time UPS was the dominant shipper and FedEx was a minor player being used for only those few shipments that had to get there the next day.  Focusing on distribution logistics is what got me hired at Apple, and has helped to think about the abstraction of products to delivery of services.

Part of the book tells the story how the board of directors thought it was a time for change in management and was ready to reduce Fred Smith’s authority.  One of my favorite paragraphs is the following.


Watch out for those in the data center/IT space who make cost reduction the #1 goal.  Cost reduction is a temporary move, at some point you need to grow, and growing with cost reduction is not sustainable.

There was actually an executive sponsored study to reduce the # of cities during FedEx’s growth days because those cities were too expensive compared to others.


For those who have been around for a while, we have all heard or seen various projects that feel like this.  The problem is cost reduction is not sustainable for a growing business.  Cost efficacy is a sustainable.

Could you imagine a data center designs were done by someone who focuses on cost reduction?  In fact, that may be a good horror story talking to some designers.  The top two ways typically designed for are resiliency and efficiency.  Who designs for cost reduction?  Willing to compromise resiliency and efficiency.  Not many, but I wouldn’t be surprised there are some designs out there as there are people out there who don’t know data centers/IT who love to hear the words “cost reduction” coming from the data center group.  Until their data center services go out of business with downtime.