HOW TO PREPARE A DATA CENTER STRATEGY. What you need to know to build a business case for Data Center sourcing

Transcription

1 HOW TO PREPARE A DATA CENTER STRATEGY What you need to know to build a business case for Data Center sourcing

2 Presented by: Gary Davis Principal PlanNet Consulting (714) Steve Miano Principal PlanNet Consulting (714)

3 Established in 2001 Independent consulting firm with offices in Los Angeles, Orange County and Phoenix Twice named in OCBJ Fastest Growing Companies Clients include over 500 Global, Fortune and middle market corporations and institutions Proven methodology, intellectual property and best practices associated with data center strategies Competencies in IT infrastructure, real estate, facilities, operations and financial analysis

4 About Us Services from the Data Center to the Workplace Data Center Consulting Strategy Sourcing Design Management Migration Services Data Center Migration Applications Deployment Planning and Project Management Workplace Technologies IT Infrastructure and Integrated Building Design Cloud Consulting and Migration Planning Migration Support

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6 Agenda What is a Data Center strategy? Getting started Assessing the current state Developing a future state model Building a business case What your decision-makers want to know Case studies

7 Data Center Strategy A Data Center Strategy is usually initiated for any or all of the following reasons: Data Center failures are impacting the business Growth is expected to exceed power, cooling and/or space capacities Risk real or perceived Lowering Cost of Operation Improve systems availability and disaster recovery Inform a decision to build, co-locate or a combination of approaches

8 Getting Started Define your objectives Business drivers Technology imperatives Desired outcome Assemble a Core Team Identify/appoint a project sponsor Sponsorship typically comes from Real Estate, Facilities or IT Typical make-up of a Core Team Facilities representative (VP, Director) IT representatives CIO, IT Infrastructure VP, Network, user representative(s) Procurement, sourcing and finance

9 Identify Stakeholders A Data Center strategy has many stakeholders It s critical to engage to appropriate stakeholder resources to gain consensus and eliminate surprises Missing a key stakeholder is analogous to missing a tire on your car

10 Gather Information Formalize the project with a Stakeholder kick-off Introduce the initiative and objectives Layout timelines Set expectations

11 Assessing the Current State Develop and issue a Comprehensive Request for Information and meet with Stakeholders to gather information Some of the information is available electronically (e.g., CMDB, As-Built drawings, energy bills, etc.) Some of the information will be drawn out in Stakeholder meetings (e.g., application portfolio, financial models, etc.) RFI Categories Equipment/application inventory Data Center Facilities Real Estate Operations Network Business Systems & Services Business Continuity Finance Growth & Capacity Planning IT Strategic Plan

12 Assessing the Current State Key Points Establish current demand load KW is the currency Determine historical demand growth (3-5 years) Assess existing facility s attribute and constraints (e.g., Tier rating, power, cooling, space, SPOCs) Identify applications and their tier levels Identify network constraints (e.g., latency sensitive applications) Identify adjacency requirements/constraints Identify key business & IT initiatives (e.g., new business ventures, merger/acquisition, virtualization, etc.) Document outage history (many executives are unaware of outages)

13 Outages.what outages? 11/18/2007 PRISM outage 3/12/2007 UPS Failure 16 hour outage 4,000 hours recovery effort 6/30/2008 Spokane ATS Failure 25 hour outage 6,300 hours recovery effort 12/31/2008 Failed UPS Transfer 4/1/2007 7/1/ /1/2007 1/1/2008 4/1/2008 7/1/ /1/2008 1/1/2009 4/1/2009 7/1/ /1/2009 1/1/ /26/2009 7/11/2007 Over Temp from Power Failure 5/16/2008 Power Upgrade Outage 12/8/2008 Sprinkler Work Power Outage 6/25/2009 Fire Panel AC Outage 23 hour outage 5,800 hours recovery effort

14 Future State Identify the future state scenario Establish operational objectives and service levels Establish availability targets Tier Rating Geography Determine efficiency objectives (PUE) Define sustainability goals Consider adaptability needs Plan for the Unplanned

15 Establish the Future State Determine relevant sourcing models Co-Location Greenfield Tenant Improvement Retrofit Existing Facilities Cloud/Services Select markets to be evaluated Ideally, markets with co-location options, cheap power and freecooling potential Determine business affinity to particular markets Existing operations Business drivers Existing or future real estate or facility programs

16 Capacity Demand - k Watts Establish Demand Forecast Align business growth with IT growth Optimize IT deployment as part of the deployment of a new data center 30,000 28,000 26,000 24,000 22,000 20,000 Capacity Demand Forecast 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Un-optimized Managed Optimized

17 Establish Demand Forecast Establish capacity threshold vs. demand forecast Depict historical growth with future planning Identify strategies to mitigate capacity constraints

18 k Watts Define Day 1/Day 2 Plan for incremental deployment based on demand forecast 16,000 Site 1 - Production Buildout Phases 14,000 12,000 10,000 8,000 *DAY 2: 7,900 kw, 22.5K SF 6,000 4,000 * DAY 1: 3,900 kw, 22.5K SF 2,000 0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Managed Forecast Deployed Capacity

19 Market Analysis Qualitative Metrics use to disqualify markets Energy Rates vs. Nat l average Sustainability Free cooling Reliability Telecommunications Labor Diversity Relative costs Latency Availability Relative costs Facilities Control/Lease Terms Transportation/Accessibility Flight Availability Door to Door Time Vendor & Services Support Proximity to critical vendors Environmental Risk Seismic/Volcanic Hurricane/Tidal Severe Weather Incentives (very dependent on properties) Enterprise Zones Sales Tax Energy rebate programs

20 Qualitative Market Rankings What s important to you? Keep it simple

21 Building a Business Case Determine Capital Expenditures Determine Operational Expenditures Develop a Multi-Year Total Cost of Ownership for each model (5/10 yr) Compare TCO for each model

22 Determine CapEx & OpEx CAPEX OPEX Construction & Soft Costs (Greenfield, TI) Cable Plant Network Electronics Depreciation Migration Lease costs Power Maintenance Facility Management Security IT Operations Staff Telecommunications Services Sales Tax Migration

23 Prepare TCO for each Scenario Co-Location Example E. Washington Co-Lo (Phase-In) 2011 Start Year 1 Year 2 Year 3 Year 4 Year 5 5 year Total Year 6 Year 7 Year 8 Year 9 Year Year Total Operating Costs Power $ 46 $ 96 $ 154 $ 166 $ 178 $ 641 $ 192 $ 205 $ 220 $ 237 $ 254 $ 1,749 Predictive Maintenance $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Rent $ 478 $ 915 $ 1,244 $ 1,269 $ 1,294 $ 5,201 $ 1,411 $ 1,439 $ 1,468 $ 1,497 $ 1,527 $ 12,542 IT Staff $ 90 $ 93 $ 96 $ 99 $ 102 $ 480 $ 105 $ 108 $ 111 $ 115 $ 118 $ 1,037 Facilities Staff $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Telecommunications $ 828 $ 845 $ 861 $ 879 $ 896 $ 4,309 $ 914 $ 932 $ 951 $ 970 $ 990 $ 9,066 Co-lo Setup Costs $ 120 $ - $ - $ - $ - $ 120 $ 17 $ - $ - $ - $ - $ 137 DC Equipment Sales Tax $ 128 $ 130 $ 133 $ 135 $ 138 $ 664 $ 141 $ 144 $ 144 $ 146 $ 146 $ 1,384 Operating Costs Subtotal $ 1,690 $ 2,079 $ 2,489 $ 2,548 $ 2,609 $ 11,414 $ 2,779 $ 2,828 $ 2,894 $ 2,965 $ 3,035 $ 25,916 Capital Costs DC TI $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Racks / Cabling $ 1,112 $ - $ - $ - $ - $ 1,112 $ 127 $ - $ - $ - $ - $ 1,240 Network Electronics $ 879 $ 188 $ 188 $ - $ - $ 1,256 $ 378 $ - $ - $ - $ - $ 1,633 Migration Costs $ 1,624 $ 915 $ 634 $ - $ - $ 3,174 $ - $ - $ - $ - $ - $ 3,174 Capital Costs Subtotal $ 3,615 $ 1,104 $ 823 $ - $ - $ 5,541 $ 505 $ - $ - $ - $ - $ 6,047 Depreciation $ 1,958 $ 1,288 $ 1,296 $ 410 $ 410 $ 5,363 $ 328 $ 290 $ 94 $ 94 $ 94 $ 6,262 Cash Flow $ 5,305 $ 3,183 $ 3,311 $ 2,548 $ 2,609 $ 16,956 $ 3,284 $ 2,828 $ 2,894 $ 2,965 $ 3,035 $ 31,963 Total $ 3,649 $ 3,367 $ 3,785 $ 2,958 $ 3,019 $ 16,777 $ 3,107 $ 3,119 $ 2,988 $ 3,059 $ 3,129 $ 32,178

24 Total Cost of Operation Tenant Improvement Example Seattle TI/Lease Year 1 Year 2 Year 3 Year 4 Year 5 5 year Total Year 6 Year 7 Year 8 Year 9 Year Year Total Operating Costs Power $ 297 $ 320 $ 345 $ 371 $ 400 $ 1,734 $ 429 $ 460 $ 494 $ 530 $ 568 $ 4,216 Predictive Maintenance $ 131 $ 221 $ 279 $ 233 $ 240 $ 1,104 $ 247 $ 254 $ 262 $ 270 $ 278 $ 2,415 Rent $ 462 $ 476 $ 490 $ 505 $ 520 $ 2,453 $ 536 $ 552 $ 568 $ 585 $ 603 $ 5,296 IT Staff $ 250 $ 258 $ 265 $ 273 $ 282 $ 1,328 $ 290 $ 299 $ 308 $ 317 $ 326 $ 2,868 Facilities Staff $ 147 $ 151 $ 155 $ 160 $ 165 $ 778 $ 170 $ 175 $ 180 $ 186 $ 191 $ 1,680 Telecommunications $ 828 $ 845 $ 861 $ 879 $ 896 $ 4,309 $ 914 $ 932 $ 951 $ 970 $ 990 $ 9,066 Other Costs $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - DC Equipment Sales Tax $ 131 $ 134 $ 137 $ 139 $ 142 $ 683 $ 145 $ 148 $ 148 $ 151 $ 151 $ 1,425 Operating Costs Subtotal $ 2,246 $ 2,405 $ 2,533 $ 2,561 $ 2,644 $ 12,388 $ 2,730 $ 2,820 $ 2,911 $ 3,009 $ 3,107 $ 26,966 Capital Costs DC TI $ 6,078 $ - $ - $ - $ - $ 6,078 $ 876 $ - $ - $ - $ - $ 6,954 Racks / Cabling $ 1,112 $ - $ - $ - $ - $ 1,112 $ 127 $ - $ - $ - $ - $ 1,240 Network Electronics $ 1,157 $ - $ - $ - $ - $ 1,157 $ 378 $ - $ - $ - $ - $ 1,535 Migration Costs $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Capital Costs Subtotal $ 8,347 $ - $ - $ - $ - $ 8,347 $ 1,381 $ - $ - $ - $ - $ 9,728 Depreciation $ 796 $ 796 $ 859 $ 796 $ 796 $ 4,041 $ 716 $ 716 $ 557 $ 557 $ 557 $ 7,145 Total $ 3,041 $ 3,200 $ 3,392 $ 3,357 $ 3,440 $ 16,429 $ 3,447 $ 3,537 $ 3,468 $ 3,566 $ 3,664 $ 34,111 In thousands

25 Compare Models Annual Operating Costs Years 1-10 (in 1000's) Year 1 Year 2 Year 3 Year 4 Year 5 5 year Total Dif $ Dif % 10 Year Total Dif $ Dif % As-Is Owned $ 2,929 $ 3,125 $ 3,461 $ 3,661 $ 3,878 $ 17,054 $ - 0% $ 39,639 $ - 0% Optimized Owned $ 2,669 $ 2,869 $ 3,047 $ 3,232 $ 3,433 $ 15,251 $ (1,804) -11% $ 35,527 $ (4,112) -10% Market 1 Co-Lo $ 3,145 $ 3,117 $ 3,281 $ 3,298 $ 3,383 $ 16,224 $ (830) -5% $ 33,773 $ (5,866) -15% Market 2 Co-Lo $ 3,205 $ 3,188 $ 3,362 $ 3,391 $ 3,489 $ 16,635 $ (419) -2% $ 34,896 $ (4,743) -12% Market 3 TI / Lease $ 4,388 $ 3,653 $ 3,900 $ 3,882 $ 3,993 $ 19,816 $ 3,620 21% $ 44,423 $ 4,784 12% Market 4 Co-Lo $ 3,327 $ 3,400 $ 3,610 $ 3,677 $ 3,814 $ 17,828 $ 3,449 20% $ 38,203 $ (1,436) -4% Market 5 TI / Lease $ 3,302 $ 3,497 $ 3,730 $ 3,717 $ 3,823 $ 18,068 $ 3,447 20% $ 38,071 $ (1,569) -4% Market 6 Co-Lo $ 3,306 $ 3,368 $ 3,557 $ 3,622 $ 3,746 $ 17,599 $ 3,425 20% $ 37,778 $ (1,861) -5%

26 Annual Operting Expenses (1,000's) Scenario Analysis Annual Operating Expense Comparison $10,000 $9,000 $8,000 $7,000 Scenario 2 $65.5M 10 Yr TOC Senario 1 $68.1M 10 Yr TOC $6,000 $5,000 $4,000 $3,000 $2, w/stabalization Scenario 3 (Current-state with expansion) $58.7M 10 Yr TOC $1, Year Scenario 2 Scenario 1 Scenario 3

27 Case Studies Issues Aging primary data center in a high risk region Sub Tier 2 design History of outages Running out of capacity Facing major capital expenditures to retrofit the primary data center Lease expiring on Disaster Recovery site Major Regional Bank Results Analysis Assess deficiencies of existing facilities Determine amount of time before the DC reaches capacity Evaluate low-risk markets Evaluate own vs. co-lo Outcome Move primary DC to co-lo Retrofit existing DC to Tier 2 Repurpose existing DC to subproduction and DR Improved availability with nominal increases in TOC

28 Case Studies Global Technology Company Issues 40+ data centers worldwide Growing through acquisition Unsustainable operating costs Unmanageable data center footprint Business driver to consolidate operations Latency sensitivity from global engineering applications Results Analysis Assess operation efficiencies and costs Evaluate multiple markets and corporate owned real estate Evaluate geo-regional consolidation alternatives Analyze enterprise architecture Evaluate own vs. co-lo Outcome Geo-regional consolidation (N.A, ENAME, PAC-RIM) Deploy owned Tier 2+ Multi-site recovery $100M+ 10-year future cost avoidance

29 Case Study Issues Significantly high energy costs High-risk location Planning for significant business technology initiatives Facing future capital expenditures to uplift primary data center Global Entertainment Company Results Analysis Assess deficiencies of existing facilities Determine impact of new computing demand Evaluate low-cost markets Evaluate own vs. co-lo Outcome Expand primary DC to co-lo Leverage existing facility for business partner and DR Recommended phased deployment to optimize ROI

30 Case Study Issues Aging primary data center in a high risk region Sub Tier 2 design History of outages Running out of capacity Facing major capital expenditures to retrofit the primary data center Affinity for in-state deployment Regional Healthcare Company Results Analysis Assess deficiencies of existing facilities Assess mitigation strategies to buy time Evaluate regional markets Evaluate own vs. co-lo Outcome Move primary DC to co-lo in a lower risk geography Repurpose existing DC to subproduction and DR Stabilize current environment Recommended best value alternative

31 Case Study Major US Airline Issues Aging primary data center Sub Tier 2 design Loose Disaster Recovery plan Planned to move portion of primary to Co-Lo CIO stopped the project Affinity to operational locations Legacy IT applications and infrastructure pose significant cost and risk to migrate Results Analysis Assess deficiencies of existing facilities Assess mitigation strategies to buy time Evaluate markets in affinity metro areas Evaluate upgrade vs. build vs. co-lo Outcome Recommendation to upgrade existing data center to Tier 3 Move DR to East Coast Co-Lo Stabilize current environment

32 Thank you for your time! Feel free to ask questions