Please give me your feedback Session DF3186 Speaker Bernard Cobb Use the mobile app to complete a session survey 1. Access My schedule 2. Click on this session 3. Go to Rate & review If the session is not on your schedule, just find it via the session scheduler, click on this session and then go to Rate & review. Thank you for providing your feedback, which helps us enhance content for future events. 2
A new data center strategy for the New Style of IT Bernard Cobb/ June, 2014 Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
Disruptive trends impacting the world of IT IT value Speed Cost Simplicity Data center silos Cloud Mobility Big Data Security Delivering the New Style of IT Consolidation Standardization Virtualization 1.0 Convergence Past Timeline 2009 Today 2014+ 4
The fundamental data center flaw Cloud Security Big Data Mobility CIO/CFO responsibilities meeting across the entirety of IT and the data center IT Data center Servers Storage Business Application Network IT silos Facility silos 5
New dynamics require the New Style of IT IT Data center Scalable, modular DC Increased utilization Servers Modular capacity Storage Cloud-enabled Right-sized Business Application Network IT silos Facility silos Optimal investment Agile and converged IT/business-aligned Cash-flow Capacity Availability Flexibility 6
What you can achieve with the New Style of IT Speed and agility Uptime and SLAs Efficiency Simplicity across the data center Provision infrastructure and services as fast as the swipe of a credit card Keep apps running with intuitive management and intelligence built in Optimize investments and resources, with reduced cost and risk 7
So what does that mean for my data center strategy? My options Owned data center Option Level of control Capital cost OPEX Hosted (co-location) Outsourced Owned data center Public cloud Hosted (co-location) Outsourced Public cloud 8
HP modular data centers engineering services will be provided by EYP MCF, Inc. a subsidiary of HP, or by an EYP MCF-related practice entity, or by another qualified engineering services provider in that location.
The facility aspect of the data center flaw High capital costs, especially for land, physical plant 15-to-20 year planning horizon: build it now for all eventualities Long construction cycle All or nothing facility; inability to add phases High operating expenses, particularly energy costs Inflexible design, firm IT load limits Limited utility-based capacity 10
Data center builds are traditionally CAPEX-hungry Up to 80% of costs relate to MEP infrastructure Half of that amount is materials and labor Custom greenfield Whereas modularity shifts effort and cost from field to factory Machinery still used for site prep and lifting equipment Labor and materials connecting all pieces together Modular 25% Materials 25% Trade labor 40% Equipment 10% Machinery 10% Trade labor 10% Machinery 10% Materials 70% Equipment 11
The HP modular data center a complete package Turnkey solutions, with everything included, are ready for your IT infrastructure Modular elements typically included Data halls (includes fire protection, security, and monitoring) Electrical plant Mechanical plant Factory-built The modular data center range HP POD Standard modular (FlexibleDC) Custom modular Multi-tiered hybrid brick and mortar 12
Innovative modular technology A unique industrialized approach that offers improvements over conventional design Reduced project schedule Concurrent activities within design and supply chain Increased quality control Process engineering Standard production Factory testing Reduced and/or mitigated project risks Site logistics and safety Site resource requirements and labor uncertainties Menu-driven process for selecting mechanical and electrical plant 13
Modular DC offer from HP Type Typical IT load 10 MW 1 MW to 50 MW+ 500 kw to 10 MW+ Capacity, cost, time to deployment Custom brick and mortar Custom modular 5 MW 500 kw to 6 MW Standard modular HP POD solutions 150 kw to 1.5 MW 0 MW Flexibility, modularity, efficiency Custom brick and mortar Custom modular Standard modular HP POD solutions 14
Examples of HP s modular data center range 15
IT and facility modularity combined Modular deployment Modular consumption Modular financing For IT, this exists in PaaS (platform as a service) and IaaS (infrastructure as a service). Combined with virtualization, IT is packaged into deployable units and presents disparate parts into a module. We call this the converged infrastructure. In the data center, it is capacity management that benefits by having the ability to deploy a module of IT, power, or cooling as a single unit of measure, instead of a large brick-and-mortar project. The facility infrastructure is rightsized for current usage. Data center capacity can be measured and consumed by power instead of space. With incremental growth, capital requirements and the cost of capital more closely match facility utilization. 16
Introducing HP Facility-as-a- Service engineering services will be provided by EYP MCF, Inc. a subsidiary of HP, or by an EYP MCF-related practice entity, or by another qualified engineering services provider in that location.
HP Facility-as-a-Service (FaaS) HP FaaS provides a modular data center, designed to clients specifications where they also want to maintain control over IT operations. FaaS provides clients with data center facilities, under a long-term operating maintenance service agreement, which provides off-balance sheet financing* and reduces initial capital investment. FaaS allows customers to match facility costs to their revenue streams, and mitigates their risks of building a data center that is either too big and inefficient or too small and at capacity. FaaS is a new alternative to funding the build of a new data center or utilizing co-location space, the only previous options for owner-operated solutions. * Subject to financial reporting regulations and practices, territory by territory. 18
HP FaaS 101 A modular data center, client (owner)-operated Full usage, provisioned through an ongoing, fully leveraged maintenance service agreement HP retains ownership Maintenance agreement covers Building infrastructure and plant Prefabricated data center modules (HP POD when applicable) Electrical equipment: generator, power conditioning, utility transformer Cooling equipment: chiller/air conditioning Ongoing service for preventive maintenance or facilities management 19
What HP FaaS is and is not FaaS is A time-based maintenance agreement, with cost of the facility included in the monthly charge A data center facility Risk-mitigated and future-proofed Customer-operated Custom-designed to client specifications Client-directed; if desired, clients can work with their own general contractors, and HP can act as a PMO FaaS is NOT An outsourcing arrangement A cloud service or HP Flexible Capacity A one-time, low-cost commodity solution Co-location or a hosted service A one-size-fits-all, inflexible, boxed solution Tied to an HP turnkey delivery 20
The financial justification Cumulative cash outlay for a facility with 1 MW day-one capacity 60 Millions 50 Cumulative OPEX for a facility with 1 MW capacity 60 Millions 50 40 40 30 Build Co-location FaaS 30 Build Co-location FaaS 20 20 10 0 10 Co-location pricing assumed at $450/kW/month inclusive of all costs 0 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 21
How FaaS compares to self-build and co-location Traditional self-build Co-location services HP FaaS Data center is a one-off project Client pays rent for shared data center FaaS is an ongoing partnership between the client and HP Relation with constructor ends, except for warranty Client assumes risk that what is built meets their needs Funding needs justifying vs. business needs Temptation to overbuild Client has no control nor input into decision-making/management Provider owns and controls the facility and infrastructure Provider controls access and change management Client adjusts IT to co-location capacity/reliability restrictions HP provides a DC to meets client s needs today, provisioned for ongoing needs Facility develops as client needs change Client maintains physical control of the facility and its operations Facility costs match business needs at the given time 22
Deeper dive, operational comparison with co-location Feature Co-location provider HP FaaS Physical security Service provider controls Customer controls Infrastructure access Service provider controls Customer controls Maintenance Service provider schedules Customer and HP will schedule together Change management Service provider controls Customer controls Physical access Shared with other service provider customers Customer restricts and controls Network hub Service provider decides and controls Customer decides and controls IT density in rack Service provider may dictate or restrict Customer controls Expansion/growth/new technology Service provider may restrict Customer controls 23
The FaaS decision tree Build new data center Manage ongoing operational expenditures Need a new data center Want to outsource IT operations Yes No What is the business priority? Minimize initial capital investment Minimize both initial capital investment and manage ongoing OPEX HP Facilityas-a-Service HP Enterprise Services (ITO) Utilize co-location provider 24
Benefits of HP FaaS with HP modular data centers HP modular data centers Prefabricated infrastructure components provide shorter project timeline Component menu accommodates all needs HP solution and project overview provides plug-and-play, turnkey data center Industrialized project cost-efficiency, quality control, and rapid deployment decrease time to market Improved quality of facility and IT integration creates optimized data center Flexible facility provides right-sized, righttimed operations that adjust over time Modular design criteria provides optimal operational efficiency HP Facility-as-a-Service Reduced initial capital investment, redirect capital resource Long-term operating service agreement, full operating coverage Owner-operated model, designed to meet needs and maintain control of IT Alternative to complete outsourcing or co-location Designed to your use case for capacity, criticality, and provisioning Modular approach provides provisioning to match future IT rollout plans Adding modules over time matches facility costs to revenue stream 25
Client engagement with HP Critical Facilities Services Determine sourcing strategy Facility strategy, design, implementation, assurance In tandem with IT program Critical Facilities Strategy Critical Facilities Design Critical Facilities Implementation Critical Facilities Assurance Capacity projections Availability needs Financial criteria Operating criteria Designed-in modularity Flexibility to meet projections Multilevel availability HP PMO Speedier time to market Option of HP or GC build program Factory testing Integrated system testing Operational readiness HP PMO on FaaS 26
HP FaaS methodology Customer Design the DC Site preparation HP PMO Implementation Operation Contractual relationship Technical requirements Civil and structural construction Modular data center and MEP equipment install Data center maintenance HP Contractor Contractor HP + Contractor Design Site supervision Testing and commissioning Can be HP turnkey Customer can contract GC of choice directly Data center modules Modular electrical and cooling systems Scheduled preventive maintenance Reactive 27
Aspects of the agreement engineering services will be provided by EYP MCF, Inc. a subsidiary of HP, or by an EYP MCF-related practice entity, or by another qualified engineering services provider in that location.
FaaS contracting model: two separate customer contracts One-time contract for site preparation/construction that customer owns Ongoing service agreement for MDC and infrastructure that HP owns Civil and structural site preparation contract HP as prime Customer as owner General contractor as prime Customer as owner Infrastructure Facility-as-a-Service contract HP as owner Operations Customer as operator/user HP as prime HP Installation General contractor General contractor General contractor 29
FaaS contract model for modular data center and infrastructure Design, implementation, and commission: services-based delivery milestones Does not matter if HP is prime or not One-time service, independent of overall solution Customer fully invoiced upon delivery acceptance DC infrastructure Usage fee over 5 years* IT infrastructure DC and IT maintenance Usage fee over 5 years* Service fee over 5 years* Integrated service solution as monthly fee over 5 years* Ongoing service agreement * Or length of agreement as determined contractually or by regulation. 30
Client aspects of the maintenance service agreement Client responsibilities Physical control of assets on client s site Insurance of tangible assets No alteration/modification of assets Usage of assets for business purpose only Usage based on manufacturer specifications (normal wear and tear) End-of-service options Extend service agreement for next contract period Automatic renewal of service agreement after first 5-year term Buy-out assets and become legal owner Buy-out remaining service term; both financed amounts and ongoing services (also applies to early termination) Termination conditions and pricing is established with initial contract 31
Beyond FaaS engineering services will be provided by EYP MCF, Inc. a subsidiary of HP, or by an EYP MCF-related practice entity, or by another qualified engineering services provider in that location.
HP ongoing services Facility maintenance services Preventive maintenance Reliability assurance testing Custom call handling, incident support Operating procedures oversight Facility management IT support HP Proactive Care Services HO Datacenter Care Services Full IT Managed Services (HP Enterprise Services) IT provisioning: HP Flexible Capacity service 33
Modular data center + modular IT Combine HP FaaS with HP Flexible Capacity Flexible Capacity Network Storage Servers Facility-as-a-Service FaaS OPEX, not CAPEX model Align infrastructure expense to revenue Maintenance contract for operational efficiency Data center capacity not overprovisioned Add data halls on current, identified needs Integrate with converged management system Flexible Capacity OPEX, not CAPEX model Align infrastructure expense to revenue Enterprise-grade service for operational efficiency Unlimited; capacity buffer is refreshed as it is used Add capacity on current, identified needs Accurately monitor and manage capacity 34
Apply similar models to both data center and IT From building and maintaining a data center to building and consuming IT DC: Pay only for the data center you need today, configured and provisioned how you need it, plus a data center maintenance contract, each month IT: Pay only for the servers, storage, networking capacity, software licenses, support, and services you actually need and use each month FaaS monthly payment includes Building infrastructure Prefabricated data center modules (includes fire protection, security, and monitoring) Electrical equipment: generator, power conditioning, utility transformer Cooling equipment: chiller/air conditioning Infrastructure Flexible Capacity monthly payment includes 1 Servers Storage Networking Software Services Back Office Solution Powered by HP and Variable usage = variable payment Usage = Billing Usage = Billing Usage = Billing 1 Minimums apply below certain usage levels 35
Simple call to action More capital tied up in a facility, less can be invested in your business Build only what you need, as you need it Facility as a Service modular build, modular deployment with modular payments Match facility spend with IT and business needs Look to HP to provide different, less capital intensive, data center and IT solutions 36
Thank you
Copyright 2014 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.