(Examples of various colocation sites)

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1 Overview The largest factor involved in maintaining business servers today are the fixed costs associated with data centers. The Colocation Environment is an outsourcing model whereby a colocation company builds a large datacenter and rents out fully equipped rack space, and/or completely manages IT requirements of their tenants. Colocation enables multiple customers to access network, server, and data storage space, connecting them to a variety of service providers. Tenants therefore reduce the capital expenditure required to build new data center and instead pay a rental fee for the use of the colocation facility. In one business model, the tenants rent floor space and is allocated specific power connectivity, primary network feeds, and cooling capacity. Some facilities will provide the IT racks and rack PDUs, while others allow their customers to fully specify the racks and rack PDUs. In another colocation model, the colocation company provides all infrastructure, servers, and networking gear. In this model, customers pay the colocation facility to host the applications. The customer does not have access to any IT servers or equipment. In most cases the colocation facility provides a service level agreement (SLA) that guarantees the uptime of their facility to their tenant; usually with stiff penalties for unplanned facility or service downtime. For this reason, Colocation facilities are typically very concerned with the reliability of the infrastructure equipment. (Examples of various colocation sites) Colocation Industry Trends While the infrastructure of data center is constantly evolving, the capital increase within the colocation market is growing. Inevitably the colocation industry has gotten more competitive, and providers are placing emphasis on factors such as data center capacity and speed. Only a few years ago, providers were limited by capital constraints, which limited large scaling in capacity. However, the industry has changed, with direct competition coming from cloud based services and independent data centers on the enterprise level. Enterprises are not rushing to replace facilities with cloud however. There is an inherent fear of cloud due to the lack of reliable data, with benefits often being held in the skeptical light. The key concern that consumers desire is the speed of deployment, which has led to the rise of modularity within this industry. Overall, the market is truly becoming more complex. More data and knowledge over the last few years have allowed for a higher standard of product LT-0000X-A 1

2 in the colocation field. This being noted, more companies are shying away from retaining data center facilities as an in-house operation and moving towards colocation facilities. Many companies are finding the costs associated with building and maintaining data centers is difficult to manage. While computer data networks are becoming more critical to almost all businesses, these businesses don t have the budgets or personnel to manage the ever changing IT requirements. Colocation offers a solution to reduce capital expenditures and support personnel required to support data networks. Many companies find that colocation options are simply more cost efficient than building their own dedicated facilities. Over the next four years, data center services market in United States is expected to grow at a CAGR of 12.36% to reach US$45 billion, primarily due to the rising internet traffic with greater bandwidth penetration, growth in social media and web 2.0 and the overall maturity of the online business models. Complex managed services will continue to have almost half of the market share, however, shared services are expected to grow fastest in terms of CAGR (14.2%) followed by basic dedicated (12.7%), complex managed (11.9%) and colocation (11.8%). Colocation Facility Trends Traditionally, space rental type colocation facilities would price their rental offer on a fixed fee based on total physical space and the customer required input power connection. In this model, colocation facilities found a very high variation between the actual customer energy use. With ever increasing energy costs and threats of government energy regulation in data centers, colocation companies risk entering long term fixed contracts which can result in high losses if energy costs rise. Many space rental type colocation facilities are transitioning to a billing model based on a combination of the fixed physical space fee plus a variable energy use fee based on the total actual energy use of each customer. Below is sample pricing from a model based on physical space. FEATURES 1U and UP FULL RACK Colo Pricing Starting at $125 per month Starting at $1000 per month Port Setup Fee N/A Varies from $0 to about $1500 Cabinet Setup Fee $125 and up $550 and up Rack Space Included 1U Equivalent of 40U SLA (Service Level Agreement) % % Number of Power Plugs 1 4 AC Power Included Varies by market and provider Connection Types 100 Mbps Fast Ethernet 100 Mbps Fast Ethernet 1000 Mbps Gigabit Ethernet 10 Gbps Static IP Addresses Unlimited Unlimited LT-0000X-A 2

3 Minimum Contract 12 Months 12 Months Note: While bandwidth pricing continues to fall, co-location space and power costs are on the rise. The pricing below is meant to offer some guidance and varies greatly by co-location market, and is strongly dependent on real-estate costs and utility power rates. PDU Requirements Traditionally, colocation facilities have been very cost driven in their PDU selection process. These facilities often allocated their rack equipment with the most basic PDU that met the facility reliability requirements. However, in order to support the more modern energy billing type model, colocation facilities must be able to accurately measure customer equipment loads to allocate a percentage of the total facility energy and cooling costs to each individual tenant. Typically (but not always), colocation facilities sell space in full IT rack increments. In this case, the colocation facility requires PDU metered rack PDUs with accurate, kwh metering at minimum for new builds. While the initial selection of the PDU metered product works well for new space build outs, colocation facilities are leery about swapping out existing basic PDUs for the metered PDUs needed for energy billing. While there is typically redundant PDU power in each colocation IT rack, the colocation operators are nervous to physically disconnect, remove and replace existing PDUs for fear of accidentally disturbing the rack mount equipment which could result in costly SLA downtime penalties. For this situation, the inline energy meter is a perfect solution. Colocation facilities can more simply install an inline energy meter between the input power feed and the basic rack PDU without disturbing the rack environment. There is still a small risk when disconnecting power feeds, but it is considerably less than that of actually removing existing rack PDUs from the rack. Finally, because most tenants are remotely located from the colocation data center facility, they do not have local personnel to dispatch to physical servers or IT equipment that may be locked or frozen. These remote tenants often desire the power control benefits of switched rack PDUs. Enlogic Key Product Advantages Operate at C higher than our competitors. Higher maximum temperatures allow for a significant server temperature rise within the data center. High accuracy kwh metering for all Enlogic PDUs (no confusing portfolios with a mix of inaccurate or current-only metering along with kwh/accurate product types) Hot swap NMC product allows colocation clients to reduce risk of costly extended downtime during any pdu failure event Consistent data reporting and accuracy between PDUs and inline energy meters allow colocation customers to best manage a mix of new and legacy environments Daisy chain feature allows customers to manage 2 PDUs in typical rack via a single IP address LT-0000X-A 3

4 User defined roles allow colocation clients to restrict their tenants from resetting energy meters and only have access to power control or read only Large variety of outlet types and full portfolio of all product feature types across all power inputs allow customers to offer tenants a full suite of PDU options (for example, APC doesn t make a switched High density pdu) How to Sell There are several ways in which to attack the competition. First and foremost is to concentrate on the max temperature rating. Enlogic PDU s operate C higher than the competition. According to ASHREA, with good airflow management, server temperature rise can be 20 C on average. With an inlet of temperature of 40 C, the hot aisle can reach temperatures of 60 C. A majority of the global players only have a hot aisle rating of maximum 40 C. Designed for COLD AIR to enter the front HOT EXHAUST AIR to exit the rear Server Temperature Rise is what happens as the air flow passes through the server. Rear Front If the cold aisle inlet temp is 21 C or higher, with a given 20 C server temperature rise, our competitors would not be able to withstand the hot aisle and 41 C temperatures. *Based on ASHREA guidelines* You can also attack the competition on billing-grade accuracy of our PDU s. When compared to the competition, Enlogic has the advantage to provide an accurate +/-1%. Meaning, our PDU will monitor and report power consumption within +/-1% of your energy bill. This is particularly valuable within a colocation, as facilities must be able to accurately measure customer equipment loads. To be even more accurate, an Outlet Metered PDU has proven beneficial in this environment for the same reason. Operating Temperatures PDU Manufacturer Single Phase Chassis Depth Enlogic 5 to 60 C APC 5 to 45 C Eaton 0 to 50 C Raritan 5 to 60 C Server Technology 0 to 40 C Three Phase Chassis Depth Link to Manual (Verify Max Temp.) LT-0000X-A 4

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