Earlier this summer (July 2011) the US federal government announced plans to shut 40 percent of its data centers over the next four years. With more than 2000 data centers, the Obama Administration realized that data center consolidation was part of a broader strategy to become more IT efficient and make substantial savings (predictions run into billions of dollars a year).
Many large organizations today find themselves in the same boat, albeit on a smaller scale, where they are choosing to make economies of scale by running fewer data centers and reducing their overheads.
Over the past 20 years, the commoditization of computing in the datacenters has seen physical servers shrink in size.  Initially, their combined bulk took up the space of a room, which then reduced to the size of a fridge and now to the size of a ‘pizza box’.  Add to this, that for the past 40 years processing capacity has been doubling approximately every two years and this trend is expected to continue until at least 2020.
These factors of power density and increased processing capacity have contributed to the higher power and cooling demands in data centers. In fact it may be cheaper, in some instances, to build a new datacenter to accommodate such energy demands than to retrofit an old one.
Want to hear more?  Continue on  to our Server Efficiency: Make significant savings in your data center page where you can download a free Gartner paper.