Risks of Outsourcing Your Data Center

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1 Volume 22 February 2012 Risks of Outsourcing Your Data Center Ch ec ko t w he ut t w D he w a n.da ta e ta Ce w o ce n n nt te lin er r J e jou o ed rn urn itio al. al n co of m Build or Buy your Data Center? IT Outsourcing and the Latest Trend

2 FACILITY corner or Your Data Center? Same Dilemma, New Facts By Peter Berg There are two schools of thought when it comes to updating your datacenter facilities: build it yourself or outsource it to a colo provider. Many factors point toward giving colocation serious consideration. 12 THE DATA CENTER JOURNAL

3 Addressing the State of the Data Center As IT demands escalate, many data center managers are playing a continuous game of catch up with their infrastructure. Capacity limitations, however, pose serious challenges. It turns out those as-needed refinements are no longer sustainable. In fact, more than a third of all US data centers will run out of space, power, cooling, or all by the end of Let s take a fresh look at the state of colocation, before your data center becomes part of this statistic. The primary goals here are to avoid each of the biggest nightmares facing an IT manager: being offline in general, inability to conduct commerce, cascading systems failure, or widespread data loss. When you need more space, power, or staff but your budget only has room for one of these three, it s time to address the state of your data center. Weighing the Options While expansions are one obvious solution, their high costs and required lead times don t exactly contribute to a competitive advantage or your own anxiety level, for that matter. Fortunately, while corporate data centers are nearing capacity, options abound to address these constraints. By opting for enterprise-class colocation, a company can place their business-critical IT equipment inside a facility purpose-built to run it think of it as a better home when the old one is no longer suitable. Best of all, you can choose to maintain a full, partial, or virtually no day to day level of management. In other words, you can simply lease facility space and put your equipment inside it, or you can let your provider manage it for you. Most providers offer managed services like servers, firewalls, storage, data backup and network monitoring, along with advanced technical support a la carte. Any approach is better than no approach, as top colocation facilities are designed to ensure 100% uptime, and many of your competitors are already there. For nearly all businesses, the right colocation provider is a cost-effective, safe, and permanent solution to capacity concerns. 1 Brill, Kenneth G. Special Report: Data Center Capacity and Energy Efficiency Survey. Uptime Institute. March 14, THE DATA CENTER JOURNAL 13

4 Initial Expenses Ongoing Expenses Colocation Server migration Power Bandwidth Managed services and technical support fees (optional add-ons) Construction Cooling, power, backup generator HVAC mechanical Security systems Obtain certifications Electrical systems Static discharge protection Fire detection & suppression Cross-connect installation Cabinets Cages Architect & engineering Project manager Property taxes Liability and property insurance Hire, train new staff Integrate modern technologies Interest on CapEx Building upkeep Compliance (Tiers, SSAE 16 SOC 1) Building Monitoring Systems and Equipment Salaries for security staff, data center technicians, NOC personnel, etc. Power Maintenance (UPS, transfer switches & generators) HVAC Maintenance General repairs Annual leasing Apprehensions to Colocation Despite its repeatedly demonstrated benefits, colocation is accompanied by misconceptions which potentially influence wellmeaning decision makers in the wrong direction. Misconception: Colocation costs more. Reality: Colocation costs more than basic webhosting, but is significantly cheaper than building and maintaining a data center. The average costs to build a data center for small-to-medium sized businesses (SMBs) are up to 1800% higher at start-up and 130% ongoing than the average costs of colocation2. This imbalance exists because colocation allows companies to leverage vast economies of scale. For example, the initial expenses associated with acquiring bandwidth, power, cooling, staff salaries, and machinery are enormous. With colocation, however, tenants share recurring utility expenses without ever paying for the costs of construction. Misconception: Current employees lose their jobs. Reality: Same staff, new workload. In today s IT environments, most companies are understaffed to begin with. Outsourcing your data center frees up your scarce staff for other projects, strategy, and governance in other words, the things you aren t doing today but wish you could. When supplementing existing data center(s), colocation can actually replace the need to hire new operational staff. When colocation replaces existing data center operations completely, the company may simply lease the space and have their current staff working inside the new environment or manage it remotely. Misconception: Colocation providers are inflexible. Reality: Most colocation providers let you put your equipment into their data centers and retain full management responsibility. The old shared access/disaster recovery centers have been replaced by new, flexible providers accommodating today s modern computing environments like yours. And to all who insist they can do it alone: consider yourself lucky, because you probably have a very large and growing budget, plenty of staff, ample time, and great patience from your senior management to adapt at today s speed of IT change. Corporate Advantages Driving the Colocation Trend Based upon recent market research and widespread industry buzz, the benefits listed below actively contribute to colocation s ongoing victory over traditional build-outs. While not comprehensive, they are intended to provide valuable insight with which to guide an informed decision. 2 Baltimore Technology Park. Case Study: Building Your Own Data Center vs. Buying Colocation Services THE DATA CENTER JOURNAL

5 61% of US data center owners and operators report their budget limits staffing needs significantly. A similar study reports that data center staff increases have lagged behind equipment increases, giving more work to the same people. Financial Stability In most cases, it costs more to run a data center than it does to build one 3. IT decision makers must consider not only the initial property and construction costs but also the ongoing operational costs, as these can be prohibitively expensive for some organizations. As demonstrated in the chart below, outsourcing IT operations presents a profitable alternative to building or expanding a data center from the ground up. Time to Scale Many data centers will exceed their capacity faster than construction can replace them 4. In fact, 63% of enterprise data center operators are using or planning to use providers of colocation, managed services, and clouds platforms, driven primarily by scaling concerns 5. Rather than wait (and risk) one to three years 6 of currently overprovisioned resources for a finished construction project, the proper colocation provider can accommodate scaling needs now and in the future with on demand capacity. Business Requirements Determine Service Levels For businesses with well-defined requirements, it is imperative to locate a service provider that is willing and able to deliver services that satisfy your objectives. Not all colocation providers are created equal, so it is important to identify one that can meet your desired service levels. Service level agreements (SLAs) will specify a measurable level of service you can expect regarding things like critical power availability, IP availability, data center temperature and humidification, critical power capacity, corrective action for unmet commitments, and more. In essence, these contracts are a way to hold your provider responsible for the promises your business may rely on. The strongest contracts won t be built on penalties, but instead your ability to exit without penalty when your provider fails to deliver against their service levels. Ask around. Word travels fast and the providers who know what they re doing are the ones you want to talk to. Leveraging Staff As the recent economic downturn lingers in our wake, the potential for overworked staff advances, making fatigue-induced error and consequently, downtime much more likely. Data 3 Kenneth G. Brill, The Invisible Crisis in the Data Center: The Economic Meltdown of Moore s Law, wnloads%5cthe_invisible_crisis_inthedatacenter.pdf. 4 Brill, Kenneth G. Special Report: Data Center Capacity and Energy Efficiency Survey. Uptime Institute. March 14, Data Center Market Insight Report, DCK Audience Survey Responding to the Data Center Crisis: The Build or Buy Dilemma Melanie Wise. Paper.pdf. center managers are experiencing growing service demands, and a proportional growth in workload presents new challenges. Hiring additional technicians is one solution, but budget constraints are leaving the search stagnant while strained infrastructure proliferates: 61% of US data center owners and operators report their budget limits staffing needs significantly 7. A similar study reports that data center staff increases have lagged behind equipment increases, giving more work to the same people 8. Colocation, however, presents a promising alternative. By outsourcing IT, companies are able to hand their extra workloads over to data centers that are already staffed with experienced technicians. Current IT staff may travel to these alternate locations, or the company may decide to choose a fully managed colocation provider that offers remote technical support to relieve time delays and travel expenses. Purpose-Built Facility Not only are most colocation facilities typically staffed by technicians that know what they re doing, the facilities themselves are typically built by specialized data center mechanical engineers. Even if you have enough time and money to fund an internal expansion, locating the site location, power grid capacity, and necessary expertise to construct it can be difficult. And do you really have the time? Large scale facilities can take at least a year or more to complete, and in today s environment, can your environment wait this long? Data center facilities require highly specialized and very expensive engineering for fire detection and suppression, power, networking, cooling, security, and natural disaster defense. Because a colocation provider s success relies upon their ability to maintain such infrastructures that keep their customers services up and running, outsourcing is especially advantageous. In essence, the right colocation provider provides critical resilience for critical applications. Supplemental Data Centers Lower Latency Time-sensitive applications such as those involving the stock market, e-commerce, or live streaming rely heavily upon the speed of their delivery. When supplementing existing data centers, companies improve application responsiveness by gaining proximity to distributed users. Many of the best providers are geographically dispersed near the most active Internet peering points, and provide myriad carrier connectivity to ensure both IP speed and uptime. Disaster Recovery Depending on a single room to run business-critical applications may be optimistic, but it s certainly not safe. No one expects 7 Uptime Institute, Inaugural Uptime Institute Annual Data Center Industry Survey, May Patrick Thibodeau. IT workloads up as tech added sans staff, computerworld.co.nz/news.nsf/technology/it-workloads-up-as-tech-addedsans-staff THE DATA CENTER JOURNAL 15

6 disaster, but floods, earthquakes, power outages, routine maintenance, and flat-out equipment failures happen. Duplicating critical applications at another site means an unexpected disaster extends no further than the confines of that data center. In other words, if a facility is completely destroyed, your company won t follow suit because Internet traffic and critical applications will automatically switch to the alternate site without downtime. With costs for compute, IP, and storage at today s low prices, running an activeactive architecture is now both operationally commonplace and economically feasible. Extended Equipment Lifespan Office cooling systems are built to cool an office. What they are not built for is 24/7 temperature control over the extensive heat output of dense servers and networking equipment. The average lifespan of a server ranges from 4-5 years with regular maintenance, but inadequate heat removal and unstable power largely shorten that estimation9. With strained budgets pushing servers to their limits, uptime-threatening server failures become a matter of when instead of a hypothetical if. The proper, temperaturecontrolled operating environment achieved through a colocation provider can extend the longevity of your infrastructure and your budget. Considerations Outsourced IT is now mainstream and here to stay, particularly as it relates to datacenters. With today s world class colocation facilities, impressive cost efficiencies, and the fact your computers can never be down, companies are hard pressed to justify building or upgrading their existing computer rooms. The 17 percent of companies worldwide who outsource IT today is expected to increase to 64 percent by While every organization has unique requirements, it is also true that the right colocation provider is a near-immediate solution to the unsustainable data center. And with the number of established, quality providers out there providing great service for hundreds of satisfied customers, there s no need to settle for good enough. Making a Decision When initiating your provider search, approach the process as though you re an architect designing the blueprint for hypothetical developers. Define the measurables like current and future power, cooling, and bandwidth needs. Once you ve assessed critical requirements, you can list out desired features in a provider. These may include proximity to your headquarters, a global presence, a carrier-neutral IP network, spare parts on-site, 24/7 data center technicians, multi-level security, or anything else that meets your standards. Don t worry about overdoing it - when you request proposals from potential providers, their responses will buffer anything unrealistic. As a guide, the criteria below are good things to look for in a service provider: 9 Onsite Logic, How long should my server last? com/news/how-long-should-my-server-last/ 10 Commissioned by data center operator Savvis and conducted by independent research firm Vanson Bourne THE DATA CENTER JOURNAL Core Competency: Is colocation what the company does, or is it another page in their product book? Today s best colocation specialists have a several year track record, strong references, are customer-oriented, and employ talented support personnel. Compliance: Providers with the best data centers offer more redundancy and uptime, while Type II SSAE 16 SOC 1 audits validate the integrity of data center operations both of which contribute to the strongest uptime SLAs. Personalized Services: It takes a high level of technical expertise to adapt services to customer requirements rather than offer basic packages to which customers must adapt. Will their services really meet your needs? Service Offerings: Managed Services 4 Firewalls, networking, an array of storage offerings, monitoring, reporting, and remote hands at a minimum n Cloud Services 4 Dedicated (private), shared (public), and hybrid options n Network Services 4 IP Transit (Internet) 4 Data Transport (point to point) 4 Support for IPv6 (for next-gen Internet) 4 Carrier diversity options n Clients: A stable and diverse customer base (e-commerce, Web 2.0, Fortune 500, brand name clients, etc.) speaks to the provider s expertise and reliability overall. Also pay close attention to customer retention and referrals. Again, if you ask around, you ll quickly discover the best providers in your area. Conclusions Five years ago, unless you were running an Internet related business, chances are you didn t have colocation top of mind. But today, thanks to a confluence of several factors, datacenter colocation is not only mainstream but here to stay. If you re faced with any of the challenges we ve pointed out, it s time to consider a datacenter partner for this critical piece of your IT infrastructure. You ll be happy you did. n About the Author: Peter Berg has more than 20 years of sales and marketing experience with IT infrastructure and outsourcing. He has held sales leadership positions at a variety of service providers, including AT&T, France Telecom, Global Crossing, and CompuCom Systems. For the past three years, Berg has led the global sales and marketing efforts at ServerCentral and nlayer Communications, focusing on colocation, IP networks, and cloud computing. About ServerCentral: ServerCentral provides highly reliable IT infrastructure in secure facilities across North America, Europe, and Asia. Delivering industry-leading service levels on colocation, cloud, IP connectivity, and managed services, ServerCentral is a trusted name to a wide range of global companies seeking highly customized, missioncritical data center solutions. For more information, please visit www. servercentral.com. DA

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