White paper. The 8 pillars of colocation. Written By: Adelle Desouza Matthew Gingell Rowdy VanRijn Victor Smith

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1 White paper The 8 pillars of colocation Written By: Adelle Desouza Matthew Gingell Rowdy VanRijn Victor Smith

2 Executive Summary With Gartner suggesting colocation grew by 8% last year alone, many are turning to colocation providers to house their IT infrastructure. With so many players in this global market, it is important for decision makers to understand the key factors when deciding the best facility to suit their business needs. This paper discusses the 8 main points to consider when selecting a colocation solution as part of your data centre strategy. Content : Page 1. Understanding colocation 3 2. The deciding factors 3 3. Power 4 4. Geographic location 4 5. Expertise 5 6. Security 5 7 Equipment 6 8 Connectivity 6 9. Business continuity and resilience Looking to the future Conclusion 7 2

3 1. Understanding colocation The average age of a data centre in the UK is estimated to be 9-11 years old 1, in that time the demands on the data centre have changed significantly. With some providers ensuring their estate keeps in line with this dynamic market, it can be hard to select which provider best suits business requirements. As business evolves and the demands placed on IT infrastructure grows, many organisations are turning to outsource the location and management of their mission critical equipment and subsequent applications. Research published by Gartner highlights that adoption of colocating and hosting grew by 8% within 2013, with 2014 predictions expecting a further 12% increase 2. To steer through the recent economic crisis organisations have chosen to focus on their core competencies, relying on professionals for their data centre strategy. With the 13% increase in colocation spend due in Gartner levels of growth experienced, it is no surprise that there are an average of 29 data centre providers 3 in each of the mature markets across EMEA and North America, with so many, it is important that prospective customers understand how the seemingly little differentiators can really make a big difference to their operations. With the online generation now in their teens, the ability to scale and future proof for tomorrow s discovery is a necessity for leading providers. Understanding and adopting this philosophy allows providers to advise and work with customers for the most economical and suitable solutions. By nature colocation offers customers the ability to reduce their initial capex spend and operate an opex model, but with the correct advice and guidance from industry leaders data centre strategy can become a competitive advantage. As with any industry, terminology can prove to be a barrier to understanding, for the purposes of this paper colocation and hosting are defined as below: Colocation: The service provider houses customer s infrastructure managing the environment surrounding the IT equipment. Customers manage their own IT systems but utilise rack, power provisions, cooling, physical security and connectivity. Hosting: The service provider takes on the responsibility for the maintenance and running of the server and operating system. Applications and infrastructure are managed to optimise performance, security accessibility and availability of data and applications. 2. The deciding factors The reality of handing over the physical location of IT infrastructure can be a daunting one, exposing the true nature of the risk adverse data centre industry. Trust, regulations and policies have a part to play to making this transition an easy one for organisations and their peace of mind. Cost is often cited as the largest quantitative factor that affects the decision making process but there are other strategic business factors that in practice, are more critical. Figure 1: These can be seen in figure 1 and will be discussed later in this paper. Typically colocation providers will break down their pricing structure to varying dimensions: Space i.e. typically per rack or metered squared. Power i.e. either on a fixed package of per KW or usage packages Services i.e. the use of remote hands Contracts can vary in length but are all levied on a service level agreement (SLA). Service level agreements are essentially contracts adhered to by the provider to ensure operations within the data centre reside within certain parameters as to not adversely affect business continuity and uptime for customers. The colocation provider will typically operate the general facility, including security, mechanical equipment including power, cooling, humidity and additional maintenance. Further services can be included such as remote hands,managed IT services and network connectivity. Power Geographic location Expertise Security Equipment Connectivity Business Continuity and resilience Looking to the future 3 1 IDC Research, 2 Gartner Research, Research

4 3. Power With the power and the cooling mechanisms comparable to the life blood of the data centre, it is important that providers have suitably invested in process, methodologies and technology that do not pose a threat to this input. The power train, typically defined as the path that the power takes from coming onto the site, through the facility and finally to the rack and ever important IT equipment must be suitably protected and resilient to overcome a potential power failure. This is often achieved through redundant systems. Backup power sources such as generators can be configured in numerous ways and the redundancy is referred to as N, N+1, 2N etc. N is the number of components that is enough to cover the maximum IT load of the data centre once, without further backup. Therefore N+1 is enough components to supply the maximum IT load once and adds one independent component. This allows redundancy for a single component failure or to allow for maintenance on that single component. 2N is double the components required to cover the demand for the maximum IT loads of the data centre. It is vital to not only understand and cater for current power needs but also ensure the facility and provider of choice has available power capacity for future expansion. With green initiatives high on the agenda for both suppliers and end user organisations, renewable and sustainable energy sources are a distinctive advantage where available at a competitive cost. Not only the sustainable sourcing of energy but efficiency has become a key metric for solution providers mainly expressed in the form of PUE: Power usage effectiveness. PUE = Total Facility Energy IT Equipment Energy This metric is open to interpretation; environmental and operational practice can skew the results, but it can still offer an indication of energy efficiency. The closer the PUE figure is to 1 the better, with an industry average of about Geographic location Historically, organisations housed their compute equipment on their own site, either in the office building in computer rooms or in a purpose built data centre that they owned and operated themselves. The capital expenditure and inhouse expertise against a back drop of changing technology, processes and policies soon proved this option to be cumbersome for many organisations and they began to look to outsourcing. Expertise and experience of suppliers not only reduced the cost but ensured a reliable and efficient operation. Proximity of equipment and data to headquarters is still a key factor for most. With the addition of remote hands by customer service centric providers, the need for customers to attend to the equipment reduced in its necessity through bolt on support packages. Within particular sectors, the size of data exchanged and frequency of movement can be adversely affected if poor connectivity and high latency are matched with sites that are too far from a customer s offices. However, it is worth bearing in mind that very low latency is usually only crucial for high frequency traders and others who require data transfer in micro seconds. Therefore, good quality fibre connectivity can reduce the relevance of proximity of the data centre to customers head office. It s also worth noting that improvements in connectivity technology can offer low latency even over long distances, e.g. Germany to London; 17 MS Location should also be reviewed in terms of flexible capacity, discussions with providers on how they plan to meet growth and shrinkage expectations are vital. Those providers who have the power and commercial means to rapidly meet customer requirements will offer a distinct advantage for businesses with changing requirements. 4

5 5. Expertise As with any industry, qualifications and experience make experts. With some providers boasting regular staff training it is important that colocation providers lead the industry through the awareness and operation of best of breed technology and processes. Customers should feel assured that the latest techniques, technology and operational consensus is being adhered to in their facility of choice. In a data centre environment, human error has been known to be the cause of downtime in 70-80% of cases. Seeking suppliers with proven high level expertise and processes can be difficult. One way to ensure peace of mind is to look for independent auditing standards, such as the Uptime Institute Management and Operations award or equivalent. This is only awarded to those with the highest levels of operational excellence with the express target to reducing data centre downtime. Recognising a global problem surrounding talent within the industry, providers should be keen to ensure their teams are equipped with latest insight from industry leading training institutions. This not only welcomes fresh talent but also allows experienced team members to continue enriching their knowledge in the field. All employees operating within the data centre should hold an academic engineering qualification. Furthermore, it is important to understand the position of colocation within the bigger picture and not as a silo within IT. Some organisations will require colocation alongside additional services such as managed services, connectivity and developing cloud solutions. Providers who have expertise and experience across this spectrum can not only help identify the best solution but are also able design end-to-end solutions depending on the customer requirements. Localisation from both a linguistic and cultural aspect are vital to ensuring customers feel the solution being offered truly matches their needs. Coupling this with experience from either multiple data centres across the region as well as further afield geographies can also benefit customers who can get a local experience with best practice expertise. 6. Security Research and experience suggests that time after time security is the single biggest area of concern for data centre customers. The security of data has not only led the headlines within the industry but also reached national media. The exact location of data centres are often a well-kept secret as this is part of a heavy security protocol that all providers should subscribe to. Unassuming exteriors with physical security features such as secured perimeter fencing as well as technological support through air locked man traps, card readers and CCTV can help to mitigate against unauthorised access. This should also be upholstered by security personnel on site 24 x 7. In the past, privacy alongside the need for regulatory compliance has posed a barrier to particular industries, however in recent times, leading providers offer knowledge, ability, discipline and certification surrounding the secure handling of data. Aside from security, a further certification is increasingly important. Environmental regulations are also now more than just a CSR tick box, suppliers not only value the need to going green but accept their customers do too, leading providers have acknowledged this and hold ISO certification. ISO ISO 9001 ISO N W E S 5

6 7. Equipment Colocation can often be wrongly viewed as simply filling a rack and away you go. The equipment and systems beyond the rack are vital and should not be overlooked. As part of their data centre strategy customers must ensure the colocation partner they are sourcing provides the appropriate resilience and redundancy to mitigate their risk profile to within acceptable brackets. This will generally include dual independent power sources, resilient backup power generators and cooling systems. Tiering classifications within the industry can be used for guidance. Best in class providers will offer Tier 3 standards referring to their site as concurrently maintainable - meaning general maintenance can be carried out without the need for data centre downtime. Official certification for tiering can be a costly and lengthy process, with costs often passed onto the customer. Many leading providers will adhere to the appropriate standards but not necessarily hold formal certification. Future proofing equipment should be vital for all customers considering colocation. The ability to provide not only for current power requirements for applications but future requirements e.g. moving from low density to high density compute is an important point to consider. Industry bodies often update their advice and guidance surrounding topical issues for the effective and efficient operation of data centres and the incumbent equipment which providers should look to follow, ensuring the benefits are passed on to the end user customers. 8. Connectivity The attitude of just attaching network connections to the package will not leverage efficiencies or a high level of effectiveness for any IT solution. Leading colocation providers will offer a variety of connectivity options ensuring visibility, control and optimisation where required. Carrier neutrality (the availability of more than one network to a facility) is key for most customers. Some suppliers will offer endto-end connectivity solutions leveraged on their own network. This allows for the provision of secure internet access through private networks without the need for multiple providers and the extra associated management. Connected, strong colocation players will have multiple data centres around a region to provide an extra layer of IT resiliency. Replication to secondary facilities or an IT architecture distributed across geographic locations are some of the most effective forms of resilience that can protect against even the most extreme causes of downtime such as, adverse weather, major events or natural disasters. Resilience within the IT infrastructure on various levels should always be considered within a holistic IT strategy servicing business requirements. Connectivity to office buildings and other data centres opens up access to those customers who need fast access to data across multiple locations. For those leading suppliers who are in possession of their own network, it is also important that they offer carrier neutrality for the integration of any other sites currently possessed. Carrier neutrality and Meet-Me capability within the data centre should be primary requirements within the strategy to provide scope for future expansion whilst retaining diversity options for connectivity without supplier lock in. Suppliers who can offer both carrier neutrality and their own extensive network can offer distinct advantage to their customers. In line with offering other mainstream services within the data centre industry, some providers are in possession of their own network. This does not prevent their sites from being carrier neutral but does mean that migration between sites can be completed even easier should the customer require so in the future. Working with a provider may even result in the office building and data centre being fully integrated on the same network, hugely decreasing the latency, therefore improving performance for all stakeholders. 6

7 9. Business continuity and resilience With business continuity and the fear of downtime a vital factor in the decision making process operators need to showcase demonstrable technologies and understanding to combat the what if nature of the data centre industry. The cost of downtime to any business is thought to cost anywhere from $90,000 in the media sector to $6.5m for online brokerages per hour 4, with some businesses suffering long term reputational damage. It is important to consider the what if s not only for the major scale events that the majority of providers prepare for, but also the day to day support that may be required. This can take the form of end to end providers offering support from one technical team who have the knowledge from networks to power. From a management perspective this also allows minimal reporting through a single service manager. The Uptime institute introduced a series of tiering ratings that can be applied to data centre builds, indicating the level of resilience a site has. This will include and refer back to the redundancy of data centre components such as N+1 and 2N. It is important to recognise that formal tiering can be a lengthy and expensive process which is why some may confirm to the standards but not file for official accreditation. Many leading providers will offer sites equivalent to tier 3 standards. 10. Looking to the future Understanding and acting upon current requirements for businesses, although complex can be deemed as the simpler of tasks by comparison to planning for the future. Customer service centric providers recognise that the data centre environment should be as agile as any other arm of the business. Choosing a solution provider that offers flexibility and scalability in both up and down can help to make future planning decisions more effective and closely aligned with business needs. This flexibility can include: Space Power Contract Length Consolidation Surrounding services Simply put, the greater the flexibility offered the less risk carried by the customers throughout the lifecycle of colocation. 11. Conclusion Colocation of an organisations data centre is a decision that should be thoroughly considered, there are a plethora of experts that are available to discuss the options most suitable for current requirements as well as future growth. Table 1 acts as a checklist for the vital variables for customers in the market for colocation facilities. Truly understanding applications and the business needs behind the IT equipment to be colocated will help to gauge whether geographic location is prioritised. Regardless of proximity to the data centre, organisations must not only ensure the facility meets compliance standards for business needs but that equipment allows efficient and effective leverage of compute within a cost effective solution. Connectivity, a vital underpinning aspect for colocation is much larger than the network connection to IT equipment. Carrier Neutrality, carrier cluster benefits and low latency are all topics for discussion before making any commitment. Business continuity measures should not only consider the current requirements but how the business plans to grow in the short to medium term. With providers able to leverage the benefits gained from economies of scale, some will have the expertise to support a truly flexible architecture on which their solution is built upon, but those leading the industry will also have long engrained experience some on a pan European basis (a leading mature region). This experience means that they have not only been part of the continuously changing environment but also driving whilst learning to manage change effectively. Ultimately, understanding that the data centre does not to run the business but that the business runs the data centre across all pillars discussed is vital when choosing a colocation provider for your data centre strategy. 4 Patterson, D A Simple Way to Estimate the Cost of Downtime

8 Geographic location Expertise Compliance Equipment Connectivity Business continuity Power Looking to the future Colocation customer checklist Proximity for access required Potential expansion capacity End to end SLA offering Managed services & cloud options available Multi geography experience Proof of operational excellence Qualified experience team Remote hands Multi facility experience 9 layers of physical security for authorised access 24 x 7 security staff on site ISO standards for quality, environmentals and security Free cooling mechanisms Energy efficient power systems Metered power systems Resilience and redundancy Carrier neutral Connected buildings Other data centres Own network Low latency Redundancy systems meeting concurrently maintainable Secondary or multiple facilities for back up Renewable energy sources Efficient facilities Expansion potential Commercial flexibility About Colt Colt is the information delivery platform, enabling its customers to deliver, share, process and store their vital business information. An established leader in delivering integrated computing and network services to major organisations, midsized businesses and wholesale customers worldwide. Colt operates in 22 European countries with a 46,000km European network and transatlantic network capacity. Colt has metropolitan area networks in 41 major European cities with direct fibre connections into 19,800 buildings and 20 carrier-neutral Colt data centres. In addition to its direct sales capability, Colt has four indirect channels to market; Agent, Franchise, Distributor and Wholesale which includes Carriers, Service Providers, VARs and Voice Resellers. Colt is listed on the London Stock Exchange (COLT) Colt Technology Services Group Limited. The Colt name and logos are trade marks. All rights reserved. 8

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