BUY OR BUILD
DATA CENTRE BEST
PRACTICE GUIDE
White
Paper
Morris PentelBUY OR BUILD
DATA CENTRE BEST
PRACTICE GUIDE
EXECUTIVE SUMMARY
For most large organisations there is a growing need for data centre capacity. Shaped by competing data trends, this need has become the heart of one of the most significant decisions for IT Directors. Providing data centre capacity to meet the growing needs of the organisation has become a higher priority and its importance is likely to increase over the next few years. The drive towards the use of Big Data applications and personalised content is shaping the consumer landscape and will see a dramatic increase in the amount of data that organisations will need to manage.
With massive growth in data centre capacity being delivered by third party suppliers to meet the increasing demand, the role of the privately-owned data centres is reducing.
HIGHLIGHTS
The key drivers for most organisations are security, availability and cost
Data Centre design is now significantly more sophisticated and this is impacting operational costs through the delivery of more efficient data centres
Buying services:
Significantly lower risks than building
Benefits come on-stream much faster You can buy in increments as you grow
No or little capex required
Building your own
Much higher risk of delays and cost overruns
Capex may be expended 12 – 18 months before any deliverable and ROI is likely to take significantly longer.
The facility is unlikely to be fully utilised for a lengthy period Skills and locations are now at a premium
The growth in the third party supply market means that state of the art data centres are being commissioned.
IMPORTANT CONSIDERATIONS
In a recent study as part of this series, ‘The Data Centre Power Efficiency Study 2012’, we asked what factors are driving the internal agenda around data centres. For most of 125 respondents, security, resilience and cost were the top three drivers. However this does not mean that other factors such as location were not considered but were a slightly lower priority. We also found that there is a significant level of misunderstanding about the role of new data trends, such as Big Data and personalisation among IT professionals. These trends are both helping to shape the customer experience of the next three years.
BUY -V- BUILD
There has been a significant change in Data Centre best practice over the last three years. The viability of building your own data centre has been reducing over the last few years, driven by complexity of data centre requirements and design, scarcity of resource and the increasing range of offers from third party suppliers in a maturing market. The decision drivers around BvB have in some ways become much simpler as conditions have changed. These trends mean that best practice is now focused on how to get the best from third party suppliers rather than the question of BvB.
One of the key decisions at the heart of the data centre agenda has to be the question of BvB. For many, this is a relatively simple decision on the use of opex over capex. Third party suppliers will offer opex pricing models which are based on usage. In challenging financial conditions this has some key advantages around cost including ability to pay for additional capacity when it is brought on stream rather than paying for space which lies empty in anticipation of future need. Such flexibility means that cost is more predictable as needs change.
SECURITY RESILIENCE COST FLEXIBILITY SUPPLIER REPUTATION PUE ABILITY TO PROVIDE NETWORK SERVICES ABILITY TO PROVIDE OWN MANAGED SERVICES SUPPLIER TYPE LOCATION 4.50 4.27 4.18 3.87 3.82 3.73 3.69 3.66 3.47 3.37
Base: 125 data centre decision-makers working in large organisations, mean score if you were considering working with a new data centre provider for the first time, how important are the following in your
selection criteria? (1 not at all important, 5 very important)
As the growth in data centre requirements increases across all enterprises, scarcity of qualified resource with skills in all of the disciplines required to deliver the solution is also a significant barrier.
The viability of building your own data centre has been reducing... driven by complexity of data centre requirements and design, scarcity of resources and by the increasing range of offers from third party suppliers in a maturing market.
It is also worth considering that only the very largest data centre requirements are likely to see a theoretical lower cost with Build. That lower cost may produce only minimal benefits considering the effort and resource involved. With a very active market of third-party data centre providers opening new facilities, there has never been a better time to look at what’s on offer in the market. However the theory that it might cost less is unlikely to provide measurable benefits. Given the three to five year cycle of initial return on investment (see costs over leaf) it is debatable whether there are any real benefits, but
significant risk.
BUILDING RISKS
At a time when professional data centre operators are adding so much capacity, building your own makes sense in only a few situations. For most organisations what is available is both cheaper and built to a better standard than is economic to build by the average enterprise.
As the growth in data centre requirements increases across all enterprises, scarcity of qualified resource with skills in all of the disciplines required to deliver the solution is also a significant barrier.
In some ways this is the tipping point of a quiet revolution, like the use of cloud services or the move towards BYOD (Bring your Own Device). As we move into the age of Big Data, less and less organisations will be able to justify the cost and effort involved in delivering the private data centre. It seems likely that only the very smallest and largest organisations will operate in this way in the medium term.
But it is not just a cost issue. Designs are becoming more sophisticated, leveraging better cooling and more efficient power usage. Quality site locations are at a premium. These factors impact the cost and value of the data centre making the ‘build your own’ solution less and less attractive. As a one-off exercise, finding the site, the people to deliver on time and the budget is a significant risk. With the real value of data centres design being best-in-breed efficiency, most organisations simply cannot afford to match the investments of professional providers. As the growth in data centre requirements increases across all enterprises, scarcity of qualified resource with skills in all of the required disciplines is also a significant barrier.
Best Practice - Third party providers are inevitable more aware of the innovations and best practice of their competitors and therefore able to build those innovations into their designs. They also update their facilities on a regular basis to maintain competitiveness.
COST
When looking at building a data centre you are considering the Total Cost of Ownership(TCO) over a six to eight year period. Front end costs are extremely high and the benefits take a long time to come on-stream with Return of Investment (ROI) thresholds sometimes not appearing for three or four years. The design and implementation costs are paid for well in advance of operational availability of the data centre, and the time period from the search for a site to becoming operational can be 18 months or longer. When looking at building your own data centre, these long cycles for ROI combined with the attendant risks have reduced the attractiveness of direct ownership. Site and building costs together with IT Infrastructure costs need to be funded well in advance of any operational benefits.
However, the largest element in large scale data centre costs is power. Analysts suggest that around 70% of operating cost is power consumption. Therefore operational efficiency and a keen eye on energy pricing is a must. In a recent report around power efficiency in this series ‘The Data Centre Power Efficiency Study 2012’ the Customer Experience Foundation concluded that the majority of organisations were not on top of their energy costs.
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Best Practice – In-house builds are capital-intensive and do not pay back for many years. Working with third party data centre suppliers can change that to an Opex on-demand model, a much more cost efficient route.
PUE (POWER USAGE EFFECTIVENESS)
In addition to this lack of focus on operational cost, very few organisations have a handle on PUE cost impacts. PUE measurements are not universally standard as various different ways of measuring the elements of the PUE equation exist. However this variation is marginal when considering overall cost. A 0.1 point drop in PUE at today’s prices is equivalent to a headcount reduction of 1.5-2 full time staff for a large data centre. Over the lifecycle of a data centre this is a significant reduction. The average PUE in the US according to American Government published figures is around 2.0 and it is probably slightly higher in the UK. Best practice from third party suppliers in PUE now produces data centres with PUE ratings of 1.25. This means that most organisations can save 0.9 points or the cost of 12-20 headcount at today’s prices. However, this is not the whole story. We are all expecting significant rises in the cost of power over the next few years and this will magnify the impact of PUE saving.
It is also worth noting that the impact of PUE reductions is measured in hundreds of thousands of tons of CO2 emissions across UK PLC. Many commentators on environmental issues see the growth of data centres as an additional and significant threat to air quality and public health. It is therefore possible that during the immediate future we will see an increased focus on CRC (Carbon Reduction Commitment) tax schemes. As we head towards the next election it is likely to be higher on the political agenda.
CONTROL
For some organisations the need to have control over every aspect of their computing and data
environment is translated into the requirement to build and operate their own data centre. With the range of offerings in the market place, this need for control may be more an emotional feeling rather than the necessity it was five years ago. Security options from third parties can range from shared server environments to complete secure and dedicated environments meeting the highest government security standards. Not all suppliers will offer a complete range of these facilities but it is relatively simple to find one that will meet your requirements. Where control is a major issue then co-location offerings are more attractive. The third party supplier delivers the physical infrastructure allowing the organisation the opportunity to focus on their core operational skill.
Best Practice – Although control is highly desirable, third party suppliers of data centres now offer plenty
of controls, considered equal to most in-house arrangements. With this barrier removed, working with the supplier to embed SLAs and KPIs that are easily measurable is the best option.
PUE (BASIC EQUATION)
POWER UTILISATION
SCALABILITY
One of the key factors to consider when looking at a data centre provider has to be scalability and the ability to meet changing needs for computing power, storage and network links. The capability to respond to changing requirements, adding space and power density efficiently is essential as is an on-demand model with a sound commercial proposition and clear ROI.
Is the solution capable of providing additional space or indeed less space in a flexible way when and if your needs change? Are you locked in to an inflexible long term contract that means scalability comes at significant cost? A requirement today could be for 10 rack spaces with an option for a further 5 racks that may be needed in the future.
Best Practice – Suppliers who provide scalable options built into their offering without adding cost until those options are invoked. A good supplier should also be able to identify additional impacts of any expansion. Denser racks will have additional power and cooling needs and these should be clearly articulated by your supplier. The impact of getting this part right is that you are less likely to need to move location quickly and in the future that improves the return on investment.
SECURITY AND PROTECTION
Our research programme suggested that security is one of the highest priorities in any decision around the data centre, so physical security is an important consideration. A data centre provider should offer a range of security options to ensure your information is protected at all times. Biometric security, keypad, card readers and digital camera placement are some of the physical tools.
Best Practice - Sophisticated Data Centre designs will incorporate motion sensors and thermal cameras which have an impact on overall energy efficiency, switching off lights in unused areas and identifying hot spots. Security procedures for highly secure facilities will include tactics to ensure that mobile devices with recording capabilities are not allowed in secure areas. It is important to understand that technology is only part of the security picture. Physical security starts well beyond the server room and will include an approach with un-named buildings that are protected from ram raids by appropriate physical barriers behind fences that prevent visibility of the site.
RESILIENCE AND REDUNDANCY
A supplier will have an N+1 design providing redundancy in power, cooling and network Infrastructure, to give the maximum uptime. Separate diverse routes for power and networking tend to be more expensive to get right. When delivered as a service (by a third party), the costs are shared and with opex options this becomes attractive. It is important to understand the design and SLAs offered in order to recognise the benefits of a third party. Sometimes diverse routing is built into a design but the power or network joins a single track or pipe to the cabinet. This is not real redundancy.
Other factors to be considered are the design for backup power generation and UPS (Uninterruptable Power Supply). A third party supplier should be able to identify how long backup systems will to keep running in the event of a major failure, and in most cases this will mean the number of gallons of diesel they have in their on-site tanks.
One of the other cost factors involved in the resilience and redundancy picture is replication to a second site. Where mission critical applications and data are involved, best practice should include the ability to respond to a complete loss of a site. In this case the only solution is a second site where data is constantly replicated. Few organisations can produce a business case to build that second site and
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PRACTICE GUIDE
therefore turn to third party suppliers for a solution. Given this reliance on outside organisations for part of the solution, the value of ownership of the primary data centre is less clear. A single supply relationship is likely to produce more financial benefits.
Best Practice – A good design should have completely diverse routes to the data centre site for key services. A great design will have diverse routes to each cabinet. It is important to understand if there are any single points of failure in the design where diverse routes may meet in the same physical location or trunking. The acid test should be to identify if there is a single point on the way to the cabinet where an interruption will cause failure. In best practice, services only meet at the actual cabinet. There will also be layers of physical security noted above.
COOLING
Cooling is one of the key cost factors because it forms a significant part of the power cost. The best practice focus is on efficiency. This can mean that the cooling units are the most modern and energy efficient but consideration must also be given to what is being cooled. Some designs will cool servers rather than rooms, saving money.
Best Practice Strategy - The cooling strategy should focus on the server rather than the whole room. This is much more energy efficient and has a direct impact on cost. Good strategies will probably involve several strands of coordinated activity including techniques for the dissipation of heat as well as refrigeration. As a strategy, free air cooling (using cooler outside air) is becoming common and doesn’t require refrigeration for many days of the year cutting power consumption further.
LOCATION
Location selection is driven by ease of access and convenience of travel. The ideal data centre location must be close to rail, motorway and airport links with zero flood risks. It should take account of power and network connectivity availability. Land costs vary significantly according to location and this has an impact on budgets. Connectivity speeds have an impact on customer and staff experience potentially raising costs. Ensuring both diversity and speed is a key challenge with which a third party supplier can help.
Best Practice - To deliver real resilience, power and connectivity must be available from multiple suppliers. The need for high security combined with this profile means that good sites are few. One third party supplier’s search for the right site in South East England took nearly two years. Issues such as planning permissions must be considered which again raises questions around the practical viability of building a facility from scratch rather than finding one that has already been commissioned.
MIGRATION RISKS
Moving a data centre is a technically risky event (by definition because it is a change of state) but good practice amongst the experts results in few real failures so experience and good planning are obviously key. One of the most common concerns during a data centre migration is around service interruption. Another is around loss of data during the migration process. This applies to any move whether internal or to a third party site. However, there is an advantage when working with a third party supplier. You should be able to access their experience of moving data centres on a regular basis. Your data centre supplier should be well practiced in managing a variety of infrastructure challenges. Internal moves are far less frequent so the risks can be higher.
Best Practice - A good provider will be able to articulate a clear risk mitigation strategy. They should also
be able to provide you with expert support on any planned move. Some provide internal resources and others work with specialist third parties depending on the size and complexity of the requirement.
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APPROPRIATE SUPPLIERS
If the balance of best practice now favours ‘Buy rather than Build’ then the final question has to be the profile of suppliers? This will depend on the nature and size of the requirements and the type of customer organisation. There are many options. For smaller organisations with relatively simple requirements, shared services with no frills are available. For larger organisations, the choice is a little more complex. It is important to go through a supplier selection process that looks at needs today and in the future. Suppliers must demonstrate their design efficiency credentials as well the fundamentals such as price and service offerings. Good data centre suppliers build facilities that allow customers to deploy services rapidly and in a flexible way.
Our research combined with market intelligence suggests that third party suppliers can be broken down into four groups. (See table)
Each of these groups can provide different advantages but our research strongly suggested that Communication Service Providers are seen as significantly more credible by large organisations. Their expertise in service continuity together with their ability to offer network connectivity clearly impacted this perception.
Organisations like Cable&Wireless Worldwide with new data centre facilities offer a range of options from simple co-location to full managed services. This state-of-the-art centre and others like it are hard to beat in a “build your own” scenario. The expertise available to customers and the location and design mean they have successfully leveraged their years of experience to provide facilities that most
organisations will not be able to match. The competition in the market is driving the delivery of state of the art facilities that have to be considered when looking at Data Centre requirements and the question of Build or Buy.
13% 13%
28%
34%
Base: 125 data centre decision-makers working in large organisations, how credible do you consider the following types of supplier in terms of provision of data centre services?
(respondents who identified supplier as highly credible)
Co-location/data centre providers (e.g. Equinx, Telecity, Telehouse) Hosting providers
(e.g. Rockspace, Savvis)
Systems Integrators and IT companies (e.g. Accenture, Cap Gemeni, Fujitsu, HP, IBM) Communications Service Providers (e.g. Cable&Wireless Worldwide, BT Global services, Colt, Verizon)
CONCLUSION AND RECOMMENDATIONS
In conclusion, data centre best practice nowadays favours working with a third part supplier.
The advantages of scale, reduced Capex and the latest design and technology, high security, a choice of locations makes this the most compelling option. Shown below is a basic best practice checklist:
1. Buy v Build decision – Ensure that you have a clearly articulated build requirement that you have costed realistically before making contact with suppliers.
2. Best Practice – Get advice from third party suppliers on how they benchmark, and the various standards they have to meet.
3. Business Continuity – Has proper consideration been given to service interruption and how has this been articulated to you?
4. Design – A good design should demonstrate security, diverse routing, power efficiency and
consideration of customer needs such as customer facilities and flexible offerings. Where possible visit as many third party data centres as you can to get design ideas.
5. Length of contract – most suppliers will offer a range of contract lengths. Ensure that you take the one that meets your needs for stability with opportunities for review.
6. Location – Your staff will probably have to spend time in the data centre so what are the transport links?
7. Penalties – Ensure there are financial penalties built into the SLAs for any service interruption or security failure.
8. PUE – It is important to understand your stated PUE and that of your supplier and whether it has been achieved. It should demonstrate good design as well as the latest and most efficient technology.
9. Security – Use common standards to define what is the right level for your needs. Paying for unneeded
levels of security can be expensive. Remember physical security is as important as IT security.
10. Growth – Ensure that possible future growth is considered and built in to your business case. This additional space should be delivered on flexible terms.
HOW CABLE&WIRELESS WORLDWIDE CAN HELP
Building and running your own data centre infrastructure puts the onus on you to manage your computing and data, and absorb escalating costs as you add capacity. It ties up your IT employees when they could be contributing to your business prosperity. We provide a range of crucial benefits allowing customers to deploy services rapidly and in a flexible way:
Utmost efficiency saves money – Power Usage Effectiveness (PUE) of 1.25 ensures no money is wasted on expensive power
Ideal locations – Eight across the UK, well connected to road and ground transport
Highest level of security – Secure to Government List X and fully compliant to ISO 27001 Highest quality – The power density enables you to fully occupy cabinets with the best ancillary
equipment and Uptime Institute Tier III accredited
The best connectivity and network options – Our data centres are directly connected to our Multi-Service Platform network, meaning that you are a core component of the secure Cable&Wireless Worldwide Wide Area Network. There is also Internet access.
FIND OUT MORE
For more information about our co-location proposition and how Cable&Wireless Worldwide can enable you to build a more agile platform for growth while driving down your operational costs, and to arrange to meet with a data centre specialist, please contact us: