On recently being introduced as a data centre specialist, a US investor piped up, “Ah, the garbage bins of the IT world!”
My, perhaps unsurprisingly, preferred analogy is with the PBX or office switchboard – it may not be sexy or high-profile, but it is central to any business and it needs to be incredibly reliable.
However, perhaps my analogy is also becoming less accurate. Unlike the humble PBX, overtaken by VoIP and the convergence of it and telecoms, the data centre is gaining in prominence and importance. While it could yet struggle to be described as ‘sexy’, it is the critical element to many sexy parts of the it world. As the CEO of data centre provider, telecity, describes it to investors, “The only non-virtual part of the virtual economy”. Or, as the CFOs of the likes of Google and Microsoft see it, easily the biggest capex line in the company.
The final point also highlights an interesting trend. Cloud computing, rather than being a substitute for data centres, actually increases the requirement. While the notion of cloud computing infrastructure being anywhere is attractive, for security, legal, auditing and business reasons, most corporates wish their data to remain in the same region. Thus meaning there won’t be a rush on cheap out of country data centre space to host the latest cloud.
Of course, what really ensures the attention of the data centre at the forefront of executives’ minds is their importance, both to the business needs and the bottom line. Even in the economic challenges of 2009, many data centre providers saw annual growth of 20-30%. European telecoms traffic going through internet exchanges is continuing to increase at 50-60% per year. Further drivers going into 2011 include video (and particularly the potential for HD and 3D tv), smart grids, high speed broadband and mobile, and regulations particularly in the financial sector. The desire for vendors to take part in this demand can be well illustrated by the recent bidding war for data centre storage firm, 3PAR.
But, while the importance of data centres may have increased, the role of data centre managers and importance of data centres in business and IT thinking has yet to keep pace.
Rather strangely, there is no obvious voice or organisation for data centre managers. They often belong to broader organisations, such as facilities management or computing society, or more specialist groups, based on areas such as cabling or cooling. IT strategy decisions are often made with scant regard to the data centre, and decisions can also be shared between a number of departments such as property, facilities management and IT.
There is also the element of control and centralisation – as so often in it, the political and cultural reasons are bigger inhibitors than any technological one.
As someone at a bank recently put it, “I had to change my title from global enterprise architect, because I was getting so much negativity”. Basically, business units resented any sense of control, centralisation and interference. Such issues, as well as historical attitudes, explain why only around a third of servers are actually in proper data centres, and nearly 90% of data centre requirements are kept in-house.
Outsourcing is often simply not on the agenda. On asking a data centre manager at a multi-national recently about whether they had considered outsourcing their data centre, they replied, “Of course not, that it is too business critical”. Reasons include control, security and cost.
In a recent discussion with an IT director about data centres, his view was that, “We can do it a lot cheaper in-house”. But are they really understanding all aspects of the financial calculation – impact of depreciation, operating costs (of which power could easily be 30-40%), risks (whether technology or environmental obsolescence, or simply the fact of how a data centre will evolve in the 15 years they would hope the facility to remain in use)? it is also use of finance – last year, we saw some outsourcing simply due to the need to move costs from capex to opex. Data centres can cost around £5-7.8m per 10,000 sq ft to build and fit-out, and is this really the best use of company resource? equally, is it best to allow a specialist in the area, with all the associated skills, experience and economies of scale to manage and run data centre services?
Many data centre managers have rebutted attempts at outsourcing. Even companies, who regularly outsource activities from it to catering, often still keep their own data centres. The thinking, experience and expertise from other sourcing decisions – from cost comparisons of in-house vs outsourced to SlA and t&c issues – have rarely been used in conjunction with data centres.
Clearly, outsourcing does not work for all companies, and a hybrid route between in-house and external data centres can often make most sense. This is particularly true as, by meshing such facilities, far greater reliability and redundancy can be achieved. Indeed, a number of the larger banks have recently gone through exercises to rate applications as to the sort of data centre they need – such as specification, location and connectivity. The conclusion of such analysis has often been that they need to be less dependent on highly expensive facilities near capital cities.
On a final note, choosing a third party provider really requires a separate article. One it manager recently told me the reasons he had never considered a third party was that, “We looked five years ago, and facilities out there were very low quality”. At that time, many of the largest third party facilities were built in the early 1990s as bankers remained cautious for five years after the dot com crash (which led to the demise of 17 of 27 pan-european players). Since that time, there has been much, high quality new build. However, the credibility and expertise of the data centre outsourcing provider remains key.
Source BroadGroup
Find out more about SunGard's Colocation and Managed Hosting solutions