Global MTDC provider IO introduces London to its modular datacenter proposition
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1 Global MTDC provider IO introduces London to its modular datacenter proposition Analyst: Penny Jones 16 Jun, 2015 US-based multi-tenant datacenter (MTDC) provider IO is looking to shake up the London market with a different recipe for colocation. It offers datacenter modules that can deliver up to 200kW and 400kW of power and are built using IO intellectual property, as well as services based on the provider's IO.OS datacenter infrastructure management (DCIM) software. IO says the 112,000-square-foot Slough datacenter is already significantly pre-sold, with an anchor tenant already on-site. It says its carrier-neutral facility will drive significant customer savings through the incorporation of technologies that allow for high levels of energy efficiency and that customers will also be attracted to its offering of free remote-hands services and free cross-connects. However, IO's 'datacenter as a service' offering is not yet well known in London; the company's success has been largely driven from the US. This may pose a challenge for IO when it comes to attracting regional business, but we expect that at first, IO will largely draw on its existing customer base, which includes many US-headquartered companies that now demand a presence in Europe for proximity and data-regulation purposes. The 451 Take IO has a strong following of US-headquartered customers with global operations. This will be its first port of call as it opens its new London datacenter. Because IO has a standardized product offering based on datacenter modules and its proprietary IO.OS operating system, it has the ability to roll out datacenters in new locations quickly, which will be appealing, especially to US companies and cloud providers seeking a presence in Europe. IO's main challenge will be to attract a more traditionally focused London customer base, which may Copyright The 451 Group 1
2 not be as versed on the benefits of IO's modularized datacenter offering. This will be more than a simple branding exercise; it will require market education, both on the benefits of efficiency seen through the modules and the simple scalability its colocation approach offers. IO will also have to explain on-ramping of services locally and globally, and within the London datacenter footprint itself. We are not surprised to hear that IO will be relying on local talent and expertise to help do this a smart move as it enters a new market. Context IO was founded in 2007 by George Slessman, his brother William Slessman and business partner Anthony Wanger. Based in Phoenix, IO has equity and debt from a number of investors, including Sterling Partners, and investors managed by JPMorgan Asset Management and the Pritzker Group. It branched out as a prefabricated modular (PFM) datacenter vendor after custom-designing its own modules to use for wholesale colocation, and it also offers retail colocation with some white-walled space in its US facilities today. IO currently has six facilities four in the US (Phoenix and Scottsdale, Arizona; New Jersey; and Ohio), one in Singapore and now one in London. In total it has about 1.9 million square feet of gross space and 313MW of power capacity. Globally, it claims a utilization of about 50%. Last year, the company spun off its PFM business, now called BASELAYER. William Slessman is CEO of that company, while brother George Slessman runs IO from a new base in Singapore (Asia has been put forward as a key growth area for IO). The modular product is still a key part of IO's colocation play. The modules have been designed for energy efficiency and high density. Modules come in two flavors a 200kW module that can contain 18 racks and a 400kW model designed for up to 50 racks. Densities are 3-30kW. Modules are manufactured at BASELAYER's Phoenix factory and can be delivered in up to 120 days to both the Singapore and London markets. IO has also developed its own DCIM software called IO.OS, which it says offers transparency 'from the chiller to the chip.' This same software allows customers to take capacity from single cabinets to multiple megawatts using intelligent controls. Customers can also fine-tune environments to ensure efficiency levels. The end user sees this through IO's Conductor tool, which generates detailed graphs and provides real-time information on power-usage and power-usage-effectiveness (PUE) trends. The tool also offers an API to build custom dashboards and develop custom Copyright The 451 Group 2
3 connectors between existing datacenter devices and the colocated environment. A more recent development of IO has been the IO.Cloud, a platform based on OpenStack architecture. IO says it expects this will be available in London next year. Today, IO claims to have more than 650 customers many of which are cloud service providers and MSPs, as well as government, financial services, manufacturing, telecommunications and healthcare companies. These include Allianz, Goldman Sachs, LexisNexis, CenturyLink and Logicalis. IO believes its colocation business will be worth more than $100m by 2015/2016, and expects London will have a large role in contributing to this goal. The man behind the London strategy is Nigel Stevens, IO's new UK managing director appointed earlier this year. Stevens will be tasked with assessing growth opportunities for IO in Europe, building on his past experience as CMO at London-based Infinity SDC, Cable & Wireless and Global Crossing. A modular build for London IO's London datacenter is on a former brownfield site leased from real estate investment trust SEGRO at the Slough Trading Estate across the road from Infinity SDC's Slough datacenter and not far from NTT/Gyron Internet, CenturyLink and Equinix. IO has built its 112,000-square-foot facility on the five-acre site. Roughly 24,000 square feet of this is allocated for offices, and 88,000 square feet for datacenter space. The steel-framed datacenter was constructed in 12 months by the Kier Group and was turnkey-fitted by French contractor Bouygues. IO has secured 20MVA of power for the datacenter for day one from provider SSE, which also has a substation on the site. Backup power is provided by seven 2.5MW (delivered in modular units) Caterpillar diesel generators and on-site bulk fuel storage. IO can add uninterruptible power supply (UPS) systems in 1.2MW increments. It uses closed-loop chilled water with high-efficiency air-cooled chillers. Security includes perimeter fencing, badged entry, biometric screening and mantraps this is on top of security that can be customized with each module. Upon opening, nine modules will be installed, and IO will have room for another 81. Connectivity will be provided by Vodafone, Zayo Group, BT and Colt, with two diverse entry points for dark fiber with four conduits each. IO offers 100% uptime for all critical infrastructure, and 24/7 support delivered by IO personnel. The London datacenter will be focused on selling modules from day one, but could offer raised-floor space with white-walled construction if demand arises. IO's initial focus for this London build has Copyright The 451 Group 3
4 been its anchor tenant, Goldman Sachs, which helped IO evaluate sites and choose the highly connected location of Slough as its first choice. The financial services company has already made a significant commitment to grow within IO's datacenter in Slough. Energy efficiency IO says this new build has been constructed with sustainability in mind, and it recently received a 'Very Good' rating by the Building Research Establishment Environmental Assessment Methodology for its efforts. Energy and water efficiency were considered, waste and pollution minimized and materials sourced responsibly. IO believes it will further benefit from ongoing efficiencies seen at its new UK datacenter with the UK Climate Change Agreement, introduced in 2012, which provides incentives such as a discount on the Climate Change Levy the tax based on energy use from non-renewable sources. Competition There are some obvious competitors that come to mind when thinking about IO in London, and some not so obvious. IO is bringing a somewhat unique product to market, and some providers we have spoken with say they are not quite sure what to think of IO's positioning as a competitor just yet. We would expect IO to compete with other providers in Slough, including Infinity SDC, which sells wholesale space, CenturyLink for bids that require a range of different services, as well as Equinix and local provider VIRTUS. IO's sweet spot will probably be deals around 200kW because this is the size of the smallest module, but the company says it will also sell individual racks in multi-tenant modules, and this provides some indication of how it will position itself moving forward. Overall, IO's offering will appeal to companies that have both security and efficiency (especially from an environmental viewpoint) top of mind. SWOT Analysis Strengths Weaknesses IO's offering is somewhat different to the standard colocation offering available in London today global companies will be especially keen on the provider's ability to roll out space quickly in new locations in other parts of the world. IO's brand is not as strong in the UK, or Europe for that matter, as it is in the US and Asia. Opportunities Threats IO is bringing space online in a market that is seeing demand grow and it operates using a blueprint that will allow it to easily expand across the rest of Europe if demand requires it to do so. Other providers particularly those operating in Slough will be keeping a close eye on IO because it adds yet another player to the busy London market, but IO already has a strong installed base in other parts of the world that could now look to IO for a European presence. Copyright The 451 Group 4
5 Copyright The 451 Group 5
6 Reproduced by permission of The 451 Group; This report was originally published within 451 Research's Market Insight Service. For additional information on 451 Research or to apply for trial access, go to: Copyright The 451 Group 6
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