ITM 6.1: To Colocate or Not Colocate

Transcription

1 ITM 6.1: To Colocate or Not Colocate Presented by: Steve Miano, Managing Principal, PlanNet; and Gary Davis, Principal, Data Center Services, PlanNet 1

2 Data Center World Certified Vendor Neutral Each presenter is required to certify that their presentation will be vendor-neutral. As an attendee you have a right to enforce this policy of having no sales pitch within a session by alerting the speaker if you feel the session is not being presented in a vendor neutral fashion. If the issue continues to be a problem, please alert Data Center World staff after the session is complete. 2

3 ITM 6.1: To Colocate or Not Colocate This session will cover the analysis, criteria and decision making process to determine whether Colocation is the right solution for your enterprise. Real-life case studies will be presented on companies who elected to Colocate their data centers, and on those who determined that building and operating their own data center(s) was the better option, and how they came to those conclusions. 3

4 Agenda Why Firms are Interested in Colocation Colocation Myths and Misnomers Primary Colocation Markets Various Scenarios and Use Cases Incorporating Colocation Process of Vetting and Selecting a Colocation Facility Colocation Pricing Models (Making Sense) Case Studies Summary 4

5 Examples of Colocation Types This is for illustrative purposes based on our experience and is meant to show the differences in wholesale and retail Colocation with 10 being the lowest cost/kw, most control and highest level of security, and 1 being the opposite. Fortune and Global Enterprises are shown in BLUE while smallest organizations are shown in YELLOW Single Tenant, Co-Lo Managed Infra Multi-Tenant, Dedicated Suite Multi-Tenant, Caged Envirnment Multi-Tenant, Dedicated Racks (Retail) 0 Security Cost/KW Control of Services 5

6 Colocation Defined A Colocation (Colo) is a data center facility in which a business can rent space for servers and other computing hardware. Typically, a Colo provides the building, cooling, power, bandwidth and physical security while the customer provides servers and storage. From Whatis.com Can be an entire building dedicated to a single tenant where a Colocation company provides managed facility and other services Can be a demised suite within a building where the tenant occupies the space exclusively (shared or dedicated infrastructure) with tenants in other suites within the building Can be a fenced off cage within a larger space occupied by other tenants Can be one or more lockable racks within a multi-tenant space 6

7 Why are Firms interested in Colocation? Want to lower cost of ownership, risk and time associated with new construction Avoid large capital expenditures and move funding to operational model Achieve a data center reliability that may be difficult to maintain in a client-built and managed facility Unplanned growth demand taxing existing infrastructure Operate in a lower-risk location Improve facilities operation (outsource facility management) Leverage robust network capabilities Improve access to managed services and private cloud capabilities Opportunity to improve IT operational processes, controls and documentation Real estate driven imperatives (e.g., lease expiration, building sale) Outsource of data center function to a deep-skilled, capable provider 7

8 Colocation Myths and Misnomers I will save costs by moving the data center to a Colo May not the lowest cost option over time Conduct a data center strategy with a TCO assessment of alternatives Colo s are too expensive! Colocation can be cost-effective and in some cases, much lower cost than the client-managed facility Assume you can t move because of significantly higher network costs We will achieve lower power costs than in our current site The Colo power efficiencies may not represent lower cost to its tenants The Colocation data center is advertised as a Tier 4 and I won t experience any downtime and/or I won t require a DR site Very few data centers would meet TIA standards for Tier 4 including premium Colo sites Many outages are due to operational errors Don t assume additional space/power/cooling will be available Multi-tenant Colocation data center are not as secure Most best-practice Colocation providers achieve superior security compared to many client-managed facilities 8

9 Colocation Myths and Misnomers I trust my Colo partner, therefore SLAs are not that important SLA s are critical to protect the client s interest I can try Colocation for a few years before long-term commitment The cost of migrating a data center is extensive (multi-million dollars) and very disruptive. Recommend a 5- or 10-year agreement with options Don t assume additional space/power/cooling will be available I ll let Real-Estate determine my needs and find the best option Real Estate professionals or brokers must have fundamental understanding of IT Infrastructure and applications to provide proper guidance Often, data center initiatives to evaluate Colocation or build opportunities with Real Estate a key stakeholder Selecting a Colo is not only a Real-Estate transaction, it s also and IT Infrastructure transaction 9

10 Bandwidth Price/Performance Ratio Representative Private Line/MPLS pricing (monthly) $25,000 $20,000 $15,000 $10,000 $5,000 Cost per Mbps for data center circuits has been dropping, enabling larger workloads to be geographically separated from end users (LAN to WAN access use cases) $ Mb 1 Gb 10

11 Bandwidth Price/Performance Ratio con t Internet Transit Prices ( ) U.S. Internet Region Year Price per Mbps 1998 $1200 % Decline 1999 $800 33% 2000 $675 16% 2001 $400 40% 2002 $200 50% 2003 $120 40% 2004 $90 25% 2005 $75 17% 2006 $50 33% 2007 $25 50% 2008 $12 52% 2009 $ % 2010 $ % 2011 $ % 2012 $ % 2013 $ % 2014 $ % 2015 $ % 11

12 Primary Colocation Markets Regional metropolitan areas that meet the following criteria are desirable locales Low to no geographical risk (earthquake, hurricanes) Cool climates (even desert climates offer more free cooling days than might be thought) Low, sustainable and stable power costs (previously made renewable energy investments by the Utility) will help ensure power costs will stay relatively stable Access to Tier 1 Telecommunications provider infrastructure Market has ample IT and MEP support vendors Door-to-door time to get from main IT presence to Colo (4 hours) Site with robust utility infrastructure (sub-station, water, entitlements) Tax incentives (Enterprise Zone Tax break, Tax Abatements) 12

13 Qualitative Evaluation 13

14 Vetting and Selecting a Colocation Facility Develop a strategy with key stakeholders active participation Developing a multi-year demand forecast is vital Determine best-case scenarios including combinations of Colo, build, uplift, etc. Determine the best metro-regions and for your Colocation data center Within metro-regions, ascertain qualified Colo providers Prepare a bid specification (RFx) stipulating your requirements Limit the RFx to 4 or 5 Colocation providers (usually across multiple markets) Vet pricing by having the providers fill out a common bid form to normalize pricing Short-list providers based upon their bid response 14

15 Vetting and Selecting a Colocation Facility cont d Conduct provider and site due-diligence Data Center operations, controls & security Network infrastructure Power and utility provisioning Data Center services Outage history Have a professionally qualified engineer to evaluate: quantity, quality, & redundancy of MEP: specific location risks review SOPs and MOPs, identify gaps and deficiencies, have Colo s respond to identified concerns Ensure Colo responses mitigate issues to your satisfaction Ask for best and final pricing Negotiate terms of 5- to 10-years (including options) with clauses based on SLA s Utilize an attorney with experience negotiating Colo leases Appoint an owner s rep to oversee any improvements and make-ready state 15

16 Colocation Pricing Models Many Colocation providers may have different pricing models May make normalizing pricing and TCO difficult to ascertain Metered Power You pay for the power you actually use plus a factor for cooling and overhead Circuits Provisioning You pay for circuits to your racks whether they are primary or redundant Telecom Cross Connects Colo s usually charge a monthly fee for network cross connects from the Meet Me Room Racks You pay for the number of racks you install whether used or not, plus power charges Growth You pay for expansion space whether it s used or not Wholesale You re given your own suite similar with a Metered Power option 16

17 Data Center Scenarios and Use Cases Move Primary Data Center to Colo and provision existing DC repurposed to DR Owned Data Center is Primary Production and Colo is DR/Sub prod Three DC configuration with split loads using one, two or three Colo s with geographical disbursement Colocation is determined as a strategy by the organization 17

18 Case Studies Global Engineering Company Key Driver Had 40+ global data centers & wanted to study consolidation strategies to lower cost and complexity of management Evaluate Colocation vs. building and operating their own data centers Recommendation was to build two geo-regional data centers in Ireland and Pacific Northwest Affinity to campus engineering applications Existing business operations with significant tax abatement Colocation was not feasible in US location and was not cost-effective in EMEA location Developed internal cloud to provide services to divisions worldwide Completed both data centers in 2013 with expected results Colo No-Go 18

19 Case Studies Global Entertainment Company Project 1 Study Division of Parent Co. Key Driver Move storage to lowest-cost of operation in a Colo Evaluated Colo s in low cost of energy & operations regions Client had spent significant capital on existing DC, it was recommended to defer to 2015 Project 2 Study Parent Co. and all Divisions Key Driver Consolidate and Lower Cost Affinity to existing DC and Broadcast facilities Colocation & existing DCs being evaluated in N.A. expanding to AMEA Consolidate a dozen data centers Early in study but Colo may be part of the strategy Colo TBD 19

20 Case Studies Regional Bank Key Driver Mitigate outages, DR site lease expiry and improve reliability of applications History of outages and poor MEP design Evaluated Colo s in prime regions Recommended Colo for primary production Recommended existing owned DC be uplifted to Tier 2 + Use of Cloud SaaS services Real-Estate driven initiative with strong support from CxOs Project successfully completed in 2013 Colo a Go 20

21 Case Studies Global Airline Key Driver Primary DC in a leased facility with expiration in 2017 Before move new customer-facing apps to local Colo, CEO initiated a comprehensive study Data Center was sub Tier 2 with multiple SPOCs History of outages due to poor MEP design (no redundancy in power infrastructure) Evaluated Colo s in prime regions and locations with affiinity to existing operations Existing DC in a low-risk zone with low Cost of Operation Recommended uplifting existing DC and moving DR to Colo in prime metro region Migration costs made it cost prohibitive compared to other scenarios Colo a Go 21

22 Case Studies Large Regional Utility Key Driver Multiple outages, most caused by human error and poor documentation Two primary data centers with some Active-Active for Tier 1 applications Main (larger) DC has strong operations history and moderate operational costs Secondary DC (some production and DR) history of outages Evaluated Colo s in prime regions and locations with affinity to existing operations or other Utilities (shared DC) Existing DC in a high-risk zone with average Cost of Operation Outcome likely to move the Secondary to Colo in low-cost region Colo is a Go Slow 22

23 Summary Each company has different issues and cannot use other studies as their own You must evaluate the cost, benefit and risk of Colocation vs. building or uplifting your own DC Your executives will expect to see a Total Cost of Ownership financial model, cash-flow (capital and operational expense) and qualitative data that went into your recommendation Engage key stakeholders such as Real Estate, IT, Finance, Application Teams, Network Team, Operations, etc. No project will get green-lighted without strong executive sponsorship 23

24 Thank you for your time! Steve Miano Principal PlanNet Consulting Gary Davis Principal PlanNet Consulting