Colocation Whitepaper

Related product:

Teraco colocation services

Current trends in data centre outsourcing

April 2013

1 Global IT Outsourcing TrendsIT execs worldwide say:

“Owning and operating IT infrastructure results in higher costs and wasted resources” ~ 60% agree

“Expect to save on average 25% of IT budgets through outsourcing”

“Cloud will play a huge role in the IT landscape over the next decade”

“Providing competitive advantage through enhanced agility, scalability and operational efficiencies is top priority”

“Purchasing IT assets turned out to be a mistake”

“IT infrastructure ownership ties us into specific assets, undermining the ability to move with changing environments”

“We already outsource over 25% of our IT infrastructure”

“In 5 years time, over 40% of our IT infrastructure will be outsourced”

“Outsourcing is key to meet continually evolving compliance requirements, like King III in SA”

What’s driving demand?

• Exponential growth in mobile platforms

(39x over last 6 years); video and real-time

applications (5x); IP traffic (4x).

• Massive shift to virtualisation in the cloud.

• On-going efforts to secure space, power,

cooling and low latency network

connectivity.

• Organisations unwilling to invest significant

capital in DC infrastructure without knowing

future dynamics of power, space and cooling

requirements.

Source: 2012 Global IT Leadership Report

C U R R E N T T R E N D S I N D A T A C E N T R E O U T S O U R C I N G

2 Benefits of OutsourcingServices are flexible and adaptable to business needs. “Pay-per-use” model provides for scalable cost relative to services used.Key benefits include:

- cost reduction or containment

- infrastructure scalability and flexibility

- improved quality of service as a result of vendor’s dedicated focus

Source: 2012 Global IT Leadership Report

C U R R E N T T R E N D S I N D A T A C E N T R E O U T S O U R C I N G

Source: Fast Forward to 2013: Savvis

3 True costs of DC ownership

ource: 2012 Global IT Leadership Report

C U R R E N T T R E N D S I N D A T A C E N T R E O U T S O U R C I N G

True / False? TCO = Cost of space + Cost of power?

Operating Costs

Staffing and operational environment 24*7*365Network connection costs – fibre connectivity to site from primary and redundancyPower, Power, Power (not only IT power but facilities use of power – cooling)Annual facility and infrastructure maintenanceStaff skills

Capital Costs

Ave R150k/m2, which moves to R250k/m2 for Tier

III configuration (99.999% uptime) and upgradable

Power

Capacity requirements – estimated demand over

the next 4-8 years’

Upfront planning, design and commissioning:

Design kw/m2

Location

Access to fibre connectivity and redundant links

Accessibility to power, local council applications,

estimate future use

Capital budgets

Lead times / Construction time

Power availability now and in the future

Base building shell and property

Data centre infrastructure, mechanical and

electrical

Fire suppression and detection

Security

Monitoring systems

4 Colocation TCO benefits

C U R R E N T T R E N D S I N D A T A C E N T R E O U T S O U R C I N G

According to Gartner, 64% of organisations engage in some form of

datacentre colocation services.

Studies show breakeven point for own vs operate per cabinet is

approx. 90 cabinets (for capex only – this assumes 100% utilisation

from commencement)

True TCO requires unused capacity calculation. Space, power and

cooling from commissioning through to full utilisation and retirement

measurably impacts calculations.

Most 10-year DCs fail to reach intended capacity. Typically only 30% is

achieved across space, power and cooling.

Even a 50% utilisation projection would double TCO – per cabinet

Predicting power, space and cooling requirements for 10 years is

almost impossible

TCO of a rack (both used and unused) is approximately R1m over the

DC lifetime (half capital, half operational).

Best form of rightsising to adapt IT spend to changing requirements is

outsourcing

Colocation (n) : “A utility based cost option for physical facilities where IT assets are placed in a service provider’s

facility giving the ability to take advantage of shared power infrastructure, HVAC systems, physical security and redundant

architecture. Space is leased whilst maintaining ownership and control of assets allowing a company to quickly expand and

conserving capital at the same time”

Source: The Elephant in the Room is Lost Capacity, Future Facilities

5 Outsource considerations

C U R R E N T T R E N D S I N D A T A C E N T R E O U T S O U R C I N G

Why outsourced infrastructure?

More predictable expenditure model

Flexible and pay-as-you-use cost infrastructure

Expandability and scalability of footprint

Expandability and scalability of power usage

Experienced and certified professionals focusing on

running datacentres

Improved reliability and availability

Improved efficiency and performance

Reduced and eliminated costs

Reduced risks

Compliance requirements met – King III

Does your outsourcer?

Provide access to multiple carriers and service

providers?

Have multiple fibre connectivity with a ring

configuration?

Provide locality to local support staff?

Have necessary skills to build and run a DC

environment?

Provide service level agreement underwriting

uptime commitments?

Convert your outsource costs into business enablement investments

Is your DC provider vendor

neutral?

Can your business benefit from

internet growth and

network innovations?

Can you leverage cloud

applications?

Can you leverage a pay-per-use

model?

Does your DC provider have a

virtual marketplace of

choice?

Can you connect to your

partners,

suppliers, vendors and customers?

How many networks can your

business access from your

current DC?

Do you have access to peering

points / exchanges?

Do you have access to business

ecosystems?

Thank you