A Colocation Buyer s Guide:A What You Should Know Before Making a Colocation Decision

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1 A Colocation Buyer s Guide:A What You Should Know Before Making a Colocation Decision This ebook will help you: Learn the benefits of a colocation solution Decide if you are a good fit for colocation Find out what executives say about ROI Discover questions to ask a prospective provider 08/11

2 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 2 ] Table of Contents Section One: Section Two: Section Three: Section Four: Section Five: Section Six: Section Seven: Does This Sound Like You? What Is Colocation and What are the Drivers? What s In It for Me? The Benefits of Colocation One Size Doesn t Always Fit All Strategic Considerations Before You Buy Show Me the Money Expected ROI Getting Started: Interview Questions for Your Prospective Provider

3 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 3 ] Does This Sound Like You? Although they come in different flavors, small businesses, and enterprises alike still face challenges managing their IT Infrastructure. At each stage of a company lifecycle, a new hurdle presents itself. Do you find yourself in any of the following situations?

4 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 4 ] SMB As a new startup you began housing a server in your spare closet. As operations grew, you added equipment but now you are reaching capacity. There isn t enough space to handle the amount of equipment you need to house, not to mention the cooling and power capacity you need to run increasingly complex Infrastructure. Plus, security isn t exactly up to par. Your equipment and data are at risk and you need more room to grow. Medium to Large Business Business is booming. Your application usage is through the roof and your customers can t get enough of your product. Everything seems to be humming along. But behind the scenes, your Infrastructure is pushing maximum density. You don t have the space for additional equipment. Climbing utility bills and a non-redundant system are pushing you to your breaking point. How do you meet your customers demands without disrupting service? Do you add on to your current space, continue to risk network outages or move everything to a larger facility? Enterprise At this stage you have the hardware, capital and manpower you need and are considering building your own data center facility, but you have doubts about the long-term ROI. The cost of building out a facility is one thing, but what about the monthly operating expenses? Plus, data center design is also becoming more and more complex due to the ever-changing requirements of hardware. Can you really manage it all and is it worth it? If you find yourself in any of the above scenarios, read on. A colocation provider that can handle your needs may be just what you are looking for.

5 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 5 ] What is Colocation & What are the Drivers? Colocation is a physical facilities option for your IT Infrastructure. Under a colocation scenario, your IT assets are placed in a service provider s facility (next to or co-located with the assets of other organizations), giving you the ability to take advantage of shared power Infrastructure, HVAC systems, physical security and redundant architecture. You essentially lease space for your IT assets while maintaining ownership and control of those assets. This option allows your company to expand quickly, bypassing the time it takes to design and construct a new data center, while conserving capital.

6 According to Info-Tech Research Group, 64% of organizations engage in some form of data center colocation services. In addition, Gartner has observed more and more enterprises enlisting colocation services, and the research firm has identified several reasons behind this trend.* 64% of Organizations Engage in Some Form of Data Center Colocation Services 1 3 First, because organizations are more geographically distributed, they don t necessarily have an optimal central location in which to locate a data center and Web systems. 2 Second, traditional office buildings don t always meet the cooling, power and weight requirements to house dense and heavy hardware, and retrofitting them is too expensive. Also, these buildings rarely allow for the lockdown security measures that companies want for their server rooms. Third, colocation gives companies that are consolidating or outgrowing their internal data centers a cost-effective alternative to building new facilities. 4 And, finally, remote lights-out management technology makes administering remote systems easier, allowing IT staffers to even reboot servers remotely. *Source: Focus Research Group Colocation Services Buyers Guide

7 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 7 ] What s In it for Me? The Benefits of Colocation Colocation offers many benefits that meet many businesses short lists including, improving their reliability, performance, eliminating costs and more. Improve Reliability & Availability Improve Efficiency & Performance Reduce and Eliminate Costs Easily Scalable Reduce Risk Meet Compliance Needs

8 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 8 ] Improve Reliability/Availability The improvement of reliability and availability is a huge plus for businesses looking to colocate. For example, the ability to provide reliable and redundant power Infrastructure is key to business uptime. In fact, colocation providers are able to offer uptime guarantees on power and are willing to pay down to the minute as stated in their Service Level Agreement (SLA). In the world of online business, even a second of downtime matters, making the reliability and availability of data center services a big draw for customers. Improve Efficiency/Performance Data center facilities are designed with efficiency and performance in mind, from the raised floor to deliver cool air, to the white rooftops that reflect the sun s heat. Temperatures are monitored and maintained to the degree to keep equipment running optimally, extending the life of hardware. And with carrier neutral IP connectivity as an option, performance to the end user is improved. Reduce and Eliminate Costs Another reason businesses choose to colocate is the cost savings. In many cases, taking advantage of a multi-tenant facility can be more cost effective than building out your own data center facility, not to mention the ongoing operating costs of management and maintenance. Five 9 s? Three 9 s? What s the Difference? Availability is usually expressed as a percentage of uptime in a given year. Many providers will state their availability as percentage such as or The difference? Two fewer nines means an average of 86 seconds more downtime every day, or 43 minutes more downtime every month. $1500 per Square Foot The average costs of building a data center are between $1000 and $1500 per square foot.* *Source: Data Center Knowledge Data Center Economics: Build vs. Buy

9 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 9 ] Auditing Standards Update Scalability With most data centers having ample room to grow and the capacity for higher density rack configurations, businesses can benefit from scalability. The ability to quickly add more physical space or increase densities as needed is key to keeping up with growing business demands. Risk Mitigation A colocation data center facility offers security features comparable to a highly controlled access government building. On-site security, video surveillance and even biometric fingerprint scanners are standard security procedures to protect customer equipment and data. Compliance and Regulatory Requirements In the digital information age, many companies are required to abide by certain compliance and regulatory policies. Since data center facilities and colocation providers have already done the heavy lifting to comply with regulatory requirements, you can save time and money. For years, you may have heard providers refer to something called SAS 70. SAS 70 is an auditing standard designed to provide assurance to customers who use service providers for tasks that impact bottom-line financials. Introduced in 1992, SAS 70 was originally written as a financial auditing framework to verify that service providers followed adequate controls and processes, thereby minimizing risk to the client company. Over the years, SAS 70 has been applied to numerous business areas including data centers and managed hosting services, where the service provider did not have a direct financial impact. Last year, the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA ) announced new requirements for reporting on controls at all service organizations, replacing the SAS 70 Standard. These are contained within three Service Organization Control (SOC) reporting options. SOC 1 reports, which are governed using the SSAE 16 framework, focus solely on service organization controls that are likely to be relevant to an audit of a user entity s financial statements. SOC 2 and SOC 3 reports address controls at the service organization related to non-financial objectives (i.e., Security and Availability for Data Centers). These new standards provide non-financial service providers a way to report on controls to their clients that better align with the processes and metrics important to data center operations.

10 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 10 ] One Size Doesn t Always Fit All Outsourcing the responsibilities around your IT Infrastructure with colocation can provide the traditional benefits of lowering costs and re-directing resources; however, like many organizations, you may be asking, Is it a fit for me? To make an informed decision, ask yourself the questions on the following pages.

11 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 11 ] Control Is your organization willing to relinquish some control over the facilities that house and/or the assets that define your IT Infrastructure? Yes. If the answer to the initial question is yes, the following core questions can help you determine whether colocation or another service like managed hosting is best for you. No. If your answer is no, then there is no need to proceed. The internal mindset must be receptive to the idea and the potential benefits that colocation and other services offer. In order to capitalize on the inherent value of these solutions, you must be willing to accept the transfer of responsibilities and allow the service provider the ability to execute them. Hardware Ownership Do you currently own or have the plans to obtain all of the required IT hardware assets you need to grow your business? Yes. If the answer is yes, your best solution is likely to be colocation. You will benefit greatly from a physical facility that offers space, power, redundancy and security under a more cost-effective structure. Savings associated with personnel and management should still be considered. No. If the answer is no, then proceed to the next question. Availability of Capital If your organization continues to grow and requires additional or new IT hardware assets, do you have access to or a willingness to devote capital expenditures to this effort? Yes. If the answer is yes, then proceed to the next question. No. If the answer is no, colocation can still be a good option for you today, however in the future you may want to revaluate your needs. Down the road if you find you aren t willing to invest in additional assets, then you will likely be best served by another solution such as managed hosting. With managed hosting, the solution provider is responsible for acquiring the necessary hardware, the costs become re-categorized as monthly operating expenses and capital expenditures are avoided. You may also consider a partner that can provide a flexible IT platform which can serve you today, as well as over the life of your business. Availability of Personnel Do you have the personnel necessary to operate your IT deployment today? Yes. If the answer is yes, then your organization should take advantage of the colocation option. No. If the answer is no, then your organization should take advantage of a managed hosting solution. The hosting service provider will allocate the appropriate level of personnel with the requisite skills and certifications who best fit the needs and demands of your IT Infrastructure. It is their responsibility to identify, hire and train (and retrain) the personnel needed to manage the Infrastructure.

12 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 12 ] Strategic Considerations Before You Buy Choosing a colocation provider is a strategic business decision that evolves from thoughtful consideration. It is important to know what to look for and the right questions to ask.

13 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 13 ] Scalability It is critical for colocation customers to measure the data center provider s ability to support their evolving computing and network requirements as their businesses grow. The ability to scale efficiently and on-demand by deploying higher density configurations within your existing footprint impacts not only your solutions Return on Investment (ROI), but also your company s bottom line. To make the best colocation decision, you must find a provider who is implementing new facility design elements and integrating proven technologies that increase power and cooling capacities to support much higher density rack configurations. A scalable data center environment that provides for flexible deployment of higher density solutions in an on-demand model will give you the opportunity to grow within the same facility and extend your longevity, ultimately improving ROI for your colocated solutions. Reliability and Resiliency A reliable colocation partner will have N+1 design providing redundancy in power and cooling Infrastructure, which means maximum system uptime. You should also look for a provider that offers a well defined SLA and supports 100% uptime. Make sure to carefully review the SLA of any colocation provider you are thinking of, and find out how much they pay if you experience downtime and if they offer proactive credits. After all, your business depends on the uptime your colocation partner provides. Security and Protection Physical security is an important component in deciding where to house your mission critical data. A colocation provider should offer comprehensive security, beyond the guard, ensuring your information is protected at all times. Biometric security, card readers, keypad or electronic locks as well as digital camera placement should be a part of any data center facility you choose. In addition, a data center must have controls in place that comply with SAS 70 audits and other industry recognized standards. Advanced systems should be in place that continuously report electrical and mechanical Infrastructure health to NOCs and on-site staff. By making sure these processes exist, you can ensure better performance of your equipment. Did You Know? N+1 N+1 means having enough equipment for what you need plus one additional for added resiliency.

14 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 14 ] Technical Support Make sure that your provider has the data center and the support centers staffed 24/7. Technicians should be reachable by and phone in the event of any problem. Avoid automated attendants, and make sure your tickets are immediately sent to a human being who is physically looking at your equipment to determine the nature of your problem. Talk to the Tier-II engineers, and raise some hypothetical questions about what you might experience to see how they respond. Finally, contact references that can attest to how the provider responded in a failed situation. Carrier Diversity Network performance issues can have a tangible financial impact to your bottom line. Since high speed is so important to your online customer, a delay of even a few milliseconds can have a direct impact on customer loyalty and revenue. Partnering with multiple high-speed Internet access providers allows a colocation provider to add diversity. In the event one Internet provider fails, another can pick up the slack. Ask potential colocation partners how many carriers feed into their facility and how they optimize and route traffic to ensure network speed and ongoing connectivity. Customer Amenities Because your technicians and staff will be spending a significant amount of time onsite, a data center should be more than just a place to house equipment. A premium facility will offer furnished customer lounges and conference areas enabling you to host a meeting or just take a break. You will also want to look for staging areas so your staff can set up equipment before bringing it on the data center floor. Finally, ensure there is office space to work, send s or just take a call. Did You Know? Leading data centers now offer power capacities of 12KW+ up to 12KW per rack.

15 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 15 ] Show Me the Money Expected ROI More than 200 CEOs, business owners and IT decision makers were surveyed on their expected ROI timeline for a colocation solution. Read on to find out when they believe colocation will pay off for their business. *Source: Colocation Trends Report by Hosting.com

16 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 16 ] 70% of CEOs, business owners and IT decision makers expect to see a return on investment from their colocation solution of those: 24% expected a return within six months 40% within twelve months 29% within two years *Source: Colocation Trends Report by Hosting.com

17 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 17 ] Getting Started: Interview Questions for Your 55%of organizations that established a shopping list of services aligned with their business needs were more likely to experience colocation success.* 62%of organizations conducted site visits to vendor locations before entering into an agreement, which results in a more successful colocation arrangement.* Prospective Provider 64%of organizations engaged in a colocation agreement have a dedicated vendor resource responsible for managing their services.* *Source: Info-Tech Colocation Strategy Storyboard

18 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 18 ] Determining if colocation is right for your business is one piece of the puzzle, but finding the right partner is a whole other ballgame. Use the list of interview questions below to help you identify a colocation provider and solution that meets your business needs How close to your company s office building is the provider s facility? Is it within driving distance so that your company s IT staff can easily get to the building? Does your business need a facility that s close to a major airport? If your company has offices in several locations, can you consider a facility in a less expensive real-estate market? Is the provider geographically diverse? Do they have facilities in other cities or abroad? Is the provider s colocation facility in a place with few natural threats, such as hurricanes? If so, what kind of precautions has the provider taken to protect the data center (and your business) from these threats? Are they structurally sound? A provider in California, for instance, should have seismically engineered each facility to withstand earthquakes. What kind of security is in place? Are there biometric scanners, on-site security and video surveillance? Is the provider carrier-neutral, or is it carrier-specific? A carrier-neutral colocation provider will let your company connect to a variety of carriers networks, while a carrierspecific provider will lock you in to just one carrier How strong is the SLA? What is the level of availability? Does the provider offer proactive credits for SLA violations? Is the facility audited by a third party? Is it SAS 70 compliant or is there a SOC 2 report available? How often is the facility audited? Is this a premium provider or a cost leader? Are you willing to sacrifice performance and support for price reductions? Are there any hidden fees outside of the agreement? How scalable is the facility? Is there enough space to grow? Do they offer high density configurations? Is there technical support available when you need it and what level engineer will you speak to when you call the Network Operations Center (NOC)? How comfortable is the work environment for your technicians? Are there customer lounges or work space? Is the provider green? Are they looking for ways to address sensitivity to the environment? 6 Does the provider offer a wide array of value-added services? Are services like cloud or managed hosting available in case your needs change in the future? What about remote services or managed installations?

19 Internap A Colocation Buyer s Guide Return to Table of Contents... [ 19 ] Internap Colocation Designed with the future in mind, Internap s premium data centers sit on the edge of the most robust network backbone available. Our secure SAS 70 Type II facilities, conveniently located in major metropolitan areas, feature N+1 redundancy for both power and cooling, maximizing your network availability. Backed by unsurpassed customer service, our facilities include state-of-the-art technology. In fact, 41% of our data center Infrastructure has been constructed within the last three years. In 2010, we delivered five 9 s of uptime availability for our Colocation and Performance IP solutions. About Internap Transform your IT Infrastructure into a competitive advantage with IT IQ from Internap, intelligent IT Infrastructure solutions that enable our customers to focus on their core business, improve service levels and lower the cost of IT operations. Our enterprise IP, CDN, colocation, managed hosting and cloud solutions are differentiated by unparalleled levels of performance, availability and support. Only Internap combines the superior performance of our Managed Internet Route Optimizer which leverages multiple network connections for performance with the rock-solid reliability of our 100% network uptime guarantee. Since 1996, thousands of enterprises have entrusted Internap with the delivery and protection of their online applications. Contact us to learn how Internap can solve your IT challenges Internap Network Services Corporation. All rights reserved. Internap and P-NAP are registered trademarks of Internap. All other trademarks and brands are the property of their respective owners. 08/

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