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Volume 22 | February 2012

Build or Buy

your Data Center?

IT Outsourcing

and the Latest Trend

Check out the new

onl

ine editi

on of

the Data Center Journal

www.datacenterjournal.com

Risks of

Outsourcing

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FACILITY

Corner

Your Data Center?

Same Dilemma, New Facts

by PeTer berg

There are two schools of thought when it comes to updating your

datacenter facilities: build it yourself or outsource it to a colo provider.

Many factors point toward giving colocation serious consideration.

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aDDressing The sTaTe of The

DaTa CenTer

a

s IT demands escalate, many data center managers are playing a con-tinuous game of catch up with their infrastructure. Capacity limitations, however, pose serious challenges. It turns out those “as-needed” refinements are no longer sustainable. In fact, more than a third of all US data centers will run out of space, power, cool-ing, or all by the end of 20121. Let’s take a fresh

look at the state of colocation, before your data center becomes part of this statistic. The primary goals here are to avoid each of the biggest night-mares facing an IT manager: being “offline” in general, inability to conduct commerce, cascading systems failure, or widespread data loss. When you need more space, power, or staff but your budget only has room for one of these three, it’s time to address the state of your data center.

Weighing The oPTions

While expansions are one obvious solution, their high costs and required lead times don’t ex-actly contribute to a competitive advantage – or your own anxiety level, for that matter. Fortunate-ly, while corporate data centers are nearing capac-ity, options abound to address these constraints.

By opting for enterprise-class colocation, a company can place their business-critical IT equipment inside a facility purpose-built to run it – think of it as a better home when the old one is no longer suitable. Best of all, you can choose to maintain a full, partial, or virtually no day to day level of management. In other words, you can simply lease facility space and put your equipment inside it, or you can let your provider manage it for you. Most providers offer managed services like servers, firewalls, storage, data backup and net-work monitoring, along with advanced technical support a la carte. Any approach is better than no approach, as top colocation facilities are designed to ensure 100% uptime, and many of your com-petitors are already there. For nearly all businesses, the right colocation provider is a cost-effective, safe, and permanent solution to capacity concerns.

1 Brill, Kenneth G. “Special Report: Data Center Capacity and Energy Efficiency Survey.” Uptime Institute. March 14, 2008.

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aPPrehensions To ColoCaTion

Despite its repeatedly demonstrated benefits, colocation is accompanied by misconceptions which potentially influence well-meaning decision makers in the wrong direction.

Misconception: Colocation costs more.

Reality: Colocation costs more than basic webhosting, but is

significantly cheaper than building and maintaining a data center. The average costs to build a data center for small-to-medium sized businesses (SMBs) are up to 1800% higher at start-up and 130% ongoing than the average costs of colocation2. This imbalance ex-ists because colocation allows companies to leverage vast econo-mies of scale. For example, the initial expenses associated with acquiring bandwidth, power, cooling, staff salaries, and machinery are enormous. With colocation, however, tenants share recurring utility expenses without ever paying for the costs of construction.

Misconception: Current employees lose their jobs.

Reality: Same staff, new workload. In today’s IT

environ-ments, most companies are understaffed to begin with. Outsourc-ing your data center frees up your scarce staff for other projects, strategy, and governance—in other words, the things you aren’t doing today but wish you could. When supplementing existing

2 Baltimore Technology Park. “Case Study: Building Your Own Data Center vs. Buying Colocation Services.” 2007.

data center(s), colocation can actually replace the need to hire new operational staff. When colocation replaces existing data center operations completely, the company may simply lease the space and have their current staff working inside the new environment or manage it remotely.

Misconception: Colocation providers are inflexible.

Reality: Most colocation providers let you put your

equip-ment into their data centers and retain full manageequip-ment respon-sibility. The old shared access/disaster recovery centers have been replaced by new, flexible providers accommodating today’s modern computing environments like yours.

And to all who insist they can do it alone: consider yourself lucky, because you probably have a very large and growing budget, plenty of staff, ample time, and great patience from your senior management to adapt at today’s speed of IT change.

CorPoraTe aDvanTages Driving The

ColoCaTion TrenD

Based upon recent market research and widespread industry buzz, the benefits listed below actively contribute to colocation’s ongoing victory over traditional build-outs. While not comprehen-sive, they are intended to provide valuable insight with which to guide an informed decision.

coLocation

constRuction

initial Expenses • Server migration • Cooling, power, backup generator • HVAC mechanical • Security systems • Obtain certifications • Electrical systems • Static discharge protection • Fire detection & suppression • Cross-connect installation • Cabinets • Cages • Architect & engineering • Project manager • Property taxes • Liability and property insurance ongoing Expenses • Power • Bandwidth • Managed services and technical support fees (optional add-ons) • Hire, train new staff • Integrate modern technologies • Interest on CapEx • Building upkeep • Compliance (Tiers, SSAE 16 SOC 1) • Building Monitoring Systems and Equipment • Salaries for security staff, data center technicians, NOC personnel, etc. • Power Maintenance (UPS, transfer switches & generators) • HVAC Maintenance • General repairs • Annual leasing

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Financial Stability

In most cases, it costs more to run a data center than it does to build one3. IT decision makers must consider not only the initial

property and construction costs but also the ongoing operational costs, as these can be prohibitively expensive for some organiza-tions. As demonstrated in the chart below, outsourcing IT opera-tions presents a profitable alternative to building or expanding a data center from the ground up.

Time to Scale

Many data centers will exceed their capacity faster than construction can replace them4. In fact, 63% of enterprise data

center operators are using or planning to use providers of coloca-tion, managed services, and clouds platforms, driven primarily by scaling concerns5. Rather than wait (and risk) one to three years6

of currently overprovisioned resources for a finished construction project, the proper colocation provider can accommodate scaling needs now and in the future with on demand capacity.

Business Requirements Determine Service Levels

For businesses with well-defined requirements, it is impera-tive to locate a service provider that is willing and able to deliver services that satisfy your objectives. Not all colocation providers are created equal, so it is important to identify one that can meet your desired service levels.

Service level agreements (SLAs) will specify a measurable level of service you can expect regarding things like critical power availability, IP availability, data center temperature and humidifica-tion, critical power capacity, corrective action for unmet commit-ments, and more. In essence, these contracts are a way to hold your provider responsible for the promises your business may rely on. The strongest contracts won’t be built on penalties, but instead your ability to exit without penalty when your provider fails to deliver against their service levels. Ask around. Word travels fast and the providers who know what they’re doing are the ones you want to talk to.

Leveraging Staff

As the recent economic downturn lingers in our wake, the potential for overworked staff advances, making fatigue-induced error – and consequently, downtime – much more likely. Data

3 Kenneth G. Brill, “The Invisible Crisis in the Data Center: The Economic Meltdown of Moore’s Law,” www.lamdahellix.com/%5CUserFiles%5CFile%5Cdo wnloads%5CThe_Invisible_Crisis_intheDataCenter.pdf.

4 Brill, Kenneth G. “Special Report: Data Center Capacity and Energy Ef-ficiency Survey.” Uptime Institute. March 14, 2008.

5 2011 Data Center Market Insight Report, DCK Audience Survey 2011 http://www.datacenterknowledge.com/archives/2011/09/13/2011-data-center-market-insight-report/

6 Responding to the Data Center Crisis: The Build or Buy Dilemma. 2008 Melanie Wise. http://www.wiseexposition.com/pdf_samples/BuildvBuyWhite-Paper.pdf.

center managers are experiencing growing service demands, and a proportional growth in workload presents new challenges. Hiring additional technicians is one solution, but budget constraints are leaving the search stagnant while strained infrastructure prolifer-ates: 61% of US data center owners and operators report their bud-get limits staffing needs significantly7. A similar study reports that

data center staff increases have lagged behind equipment increases, giving more work to the same people8. Colocation, however,

pres-ents a promising alternative. By outsourcing IT, companies are able to hand their extra workloads over to data centers that are already staffed with experienced technicians. Current IT staff may travel to these alternate locations, or the company may decide to choose a fully managed colocation provider that offers remote technical support to relieve time delays and travel expenses.

Purpose-Built Facility

Not only are most colocation facilities typically staffed by technicians that know what they’re doing, the facilities themselves are typically built by specialized data center mechanical engineers. Even if you have enough time and money to fund an internal expansion, locating the site location, power grid capacity, and nec-essary expertise to construct it can be difficult. And do you really have the time? Large scale facilities can take at least a year or more to complete, and in today’s environment, can your environment wait this long?

Data center facilities require highly specialized and very expensive engineering for fire detection and suppression, power, networking, cooling, security, and natural disaster defense. Because a colocation provider’s success relies upon their ability to maintain such infrastructures that keep their customers’ services up and running, outsourcing is especially advantageous. In essence, the right colocation provider provides critical resilience for critical applications.

Supplemental Data Centers Lower Latency

Time-sensitive applications such as those involving the stock market, e-commerce, or live streaming rely heavily upon the speed of their delivery. When supplementing existing data centers, com-panies improve application responsiveness by gaining proximity to distributed users. Many of the best providers are geographically dispersed near the most active Internet peering points, and provide myriad carrier connectivity to ensure both IP speed and uptime.

Disaster Recovery

Depending on a single room to run business-critical applica-tions may be optimistic, but it’s certainly not safe. No one expects

7 Uptime Institute, Inaugural Uptime Institute Annual Data Center Industry Survey, May 2011.

8 Patrick Thibodeau. IT workloads up as tech added sans staff, 2011. http:// computerworld.co.nz/news.nsf/technology/it-workloads-up-as-tech-added-sans-staff

61% of US data center owners and operators report their budget limits staffing needs

significantly. A similar study reports that data center staff increases have lagged behind

equipment increases, giving more work to the same people.

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16 | THE DATA CENTER JOURNAL www.datacenterjournal.com

disaster, but floods, earthquakes, power outages, routine mainte-nance, and flat-out equipment failures happen. Duplicating critical applications at another site means an unexpected disaster extends no further than the confines of that data center. In other words, if a facility is completely destroyed, your company won’t follow suit because Internet traffic and critical applications will automati-cally switch to the alternate site without downtime. With costs for compute, IP, and storage at today’s low prices, running an “active-active” architecture is now both operationally commonplace and economically feasible.

Extended Equipment Lifespan

Office cooling systems are built to cool an office. What they are not built for is 24/7 temperature control over the extensive heat output of dense servers and networking equipment. The average lifespan of a server ranges from 4-5 years with regular mainte-nance, but inadequate heat removal and unstable power largely shorten that estimation9. With strained budgets pushing servers

to their limits, uptime-threatening server failures become a matter of “when” instead of a hypothetical “if.” The proper, temperature-controlled operating environment achieved through a colocation provider can extend the longevity of your infrastructure and your budget.

ConsiDeraTions

Outsourced IT is now mainstream and here to stay, particu-larly as it relates to datacenters. With today’s world class colocation facilities, impressive cost efficiencies, and the fact your computers can never be down, companies are hard pressed to justify build-ing or upgradbuild-ing their existbuild-ing computer rooms. The 17 percent of companies worldwide who outsource IT today is expected to increase to 64 percent by 202010. While every organization has

unique requirements, it is also true that the right colocation pro-vider is a near-immediate solution to the unsustainable data center. And with the number of established, quality providers out there providing great service for hundreds of satisfied customers, there’s no need to settle for good enough.

making a DeCision

When initiating your provider search, approach the process as though you’re an architect designing the blueprint for hypotheti-cal developers. Define the measurables like current and future power, cooling, and bandwidth needs. Once you’ve assessed critical requirements, you can list out desired features in a provider. These may include proximity to your headquarters, a global presence, a carrier-neutral IP network, spare parts on-site, 24/7 data center technicians, multi-level security, or anything else that meets your standards.

Don’t worry about overdoing it - when you request propos-als from potential providers, their responses will buffer anything unrealistic. As a guide, the criteria below are good things to look for in a service provider:

9 Onsite Logic, “How long should my server last?” 2011. http://onsitelogic. com/news/how-long-should-my-server-last/

10 Commissioned by data center operator Savvis and conducted by indepen-dent research firm Vanson Bourne 2011.

Core Competency:

Is colocation what the company does, or is it another page in their product book? Today’s best colocation specialists have a several year track record, strong references, are customer-oriented, and employ talented support personnel.

Compliance:

Providers with the best data centers offer more redundancy and uptime, while Type II SSAE 16 SOC 1 audits validate the in-tegrity of data center operations – both of which contribute to the strongest uptime SLAs.

Personalized Services:

It takes a high level of technical expertise to adapt services to customer requirements rather than offer basic packages to which customers must adapt. Will their services really meet your needs?

Service Offerings:

n Managed Services

4 Firewalls, networking, an array of storage offerings,

monitor-ing, reportmonitor-ing, and remote hands at a minimum

n Cloud Services

4 Dedicated (private), shared (public), and hybrid options n Network Services

4 IP Transit (Internet)

4 Data Transport (point to point) 4 Support for IPv6 (for next-gen Internet) 4 Carrier diversity options

Clients:

A stable and diverse customer base (e-Commerce, Web 2.0, Fortune 500, brand name clients, etc.) speaks to the provider’s expertise and reliability overall. Also pay close attention to customer retention and referrals. Again, if you ask around, you’ll quickly discover the best providers in your area.

ConClusions

Five years ago, unless you were running an Internet related business, chances are you didn’t have colocation top of mind. But today, thanks to a confluence of several factors, datacenter coloca-tion is not only mainstream but here to stay. If you’re faced with any of the challenges we’ve pointed out, it’s time to consider a datacenter partner for this critical piece of your IT infrastructure. You’ll be happy you did. n

about the author: Peter Berg has more than 20 years of sales and marketing experience with IT infrastructure and outsourcing. He has held sales leadership positions at a variety of service providers, including AT&T, France Telecom, Global Crossing, and CompuCom Systems. For the past three years, Berg has led the global sales and marketing efforts at ServerCentral and nLayer Communications, focusing on colocation, IP networks, and cloud computing.

about servercentral: ServerCentral provides highly reliable IT infrastructure in secure facilities across North America, Europe, and Asia. Delivering industry-leading service levels on colocation, cloud, IP connectivity, and managed services, ServerCentral is a trusted name to a wide range of global companies seeking highly customized, mission-critical data center solutions. For more information, please visit www. servercentral.com.

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