Windstream Webinar: “Data Centers: Outsource or Own?” with Forrester Research

Data Centers: Outsource or Own?

Nov. 17, 2011

Presented by: Rachel Dines, Forrester Research, Inc. Christopher Nicolini, Windstream Hosted Solutions

Introduction

Today’s Presenters:

Rachel Dines, Research Analyst Forrester Research, Inc.

Chris Nicolini, Data Center Operations Director Windstream Hosted Solutions

2

© 2011 Forrester Research, Inc. Reproduction Prohibited 3

Data center facilities are the most expensive investment in infrastructure — before making this big decision, make sure you have explored all the options!


Current trends in data center facilities

Key factors to consider when sourcing your facility

Best practices for data center site selection

Recommendations

Agenda

© 2011 Forrester Research, Inc. Reproduction Prohibited 5 Base: 2100 IT decision-makers at enterprises and SMBs worldwide

Source: Forrsights Hardware Survey, Q3 2011

3%

9%

49%

26%

8% 5%

Decrease more than

10%

Decrease 5%-10%

Stay about the same

Increase 5%-10%

Increase more than

10%

Don’t know

On average, companies devote 19.3% of their hardware/infrastructure IT

budget to data center and IT facilities

More than a quarter expect to increase spend on data center and IT facilities

“How do you expect your firm’s spending on data center and IT facilities to change over the next 12 months?”


Overall trends

!  Interest in data center outsourcing is increasing due to:

–  Lower initial cost.

–  Improved speed to market.

–  Consolidation of smaller computer rooms and facilities.

–  Expansion as older data centers run out of capacity.

–  Business continuity requirements.

!  Still, there are valid reasons to build your own data center


The use of colocation and managed services for provisioning recovery sites is on the rise

Base: 180 disaster recovery decision-makers and influencers at business globally with a recovery site (multiple responses accepted)

4%

4%

7%

9%

13%

17%

31%

46%

Other

Cloud-based

Dedicated managed hosting

Dedicated fixed-site IT infrastructure at a service provider

Multi-tenancy managed hosting

Colocation site

Shared fixed-site IT infrastructure at a service provider

We own the site

“How do you provision your recovery site?”

Source: Forrester/Disaster Recovery Journal November 2010 Global Disaster Recovery Preparedness Online Surveys





Recommendations

Agenda


The spectrum of data center sourcing options

Own and operate data center

Colocate data center

Infrastructure outsourcing/

managed services/ hosting

IaaS/Cloud or strategic right-

sourcing

Less managed More managed

In-house Outsourced


Key considerations: power

Build

!  Power is limited by what

the utility company can deliver to your location.

!  Power costs will be at the

local commercial rate.

Outsource

!  Better access to power

!  More competitive rates on power

!  Wholesalers: actual power

costs at industrial or lower

negotiated rate

!  Retailers: flat rate for a fixed capacity circuit,

which includes markup


Key considerations: cost model

Build

!  Costs are high upfront, then

continued maintenance, power,

and security costs are ongoing.

!  Costs can be unpredictable due to break/fix and

maintenance.

!  Infrastructure and power costs

will be higher due to less

purchasing power.

!  Costs are predominantly

capital expenditure.

Outsource

!  Costs are low or nonexistent

upfront (usually equivalent to

first month’s rent).

!  Ongoing costs are for rent and power and are much more

predictable.

!  Costs are predominantly

operational expenditure.


Key considerations: flexibility and control

Build

!  Slower to accommodate

changes in IT/business

requirements (power, space,

etc.)

!  Time-to-market for initial build

can take years for a traditional

facility.

!  More control over operating

environment (maintenance

windows, temperature, access

control, cooling systems,

infrastructure, etc.)

Outsource

!  Changes in requirements can

be accommodated very quickly

as colocation providers are

constantly building out additional space.

!  Construction is often modular,

easy, and quick to expand.

!  Time-to-market is measured in

weeks.

!  Less control over the facility


Other key points to consider

Build

!  It’s hard to plan for a life span of

20-plus years.

!  Building out too much space can

be costly, as it is inefficient to run

an empty site.

!  Most companies don’t have the

expertise on staff to design and

build a facility.

!  Bringing multiple network

providers to your facility will be

costly.

Outsource

!  Outsourced data centers are run

by professionals with extensive experience running mission-

critical facilities.

!  Outsourced facilities house an

ecosystem of potential partners

(network providers, trading

platforms, hosting providers,

cloud providers, etc.).

!  Outsourcing commodity services

can allow you to concentrate on

more strategic ones





Recommendations

Agenda


Where in the world should you put your data center?

!  Most companies prefer to keep their data centers close to their

corporate headquarters, however consider the following…

–  Companies with headquarters in expensive (real estate and power costs) or risky regions should consider locating their

data centers elsewhere

–  The majority of IT systems today can be managed remotely

–  For tasks that require a physical presence

(i.e., racking and stacking, swapping tapes, etc) consider using a data center

provider’s “remote hands”


Checklist data center site selection

"  Cost of labor, real estate, utilities, and taxes

"  Natural and manmade threats

"  Economic and political risk

"  Availability, stability, and reliability of power and space

"  Telecommunications availability

"  Accessibility of the location

"  Ability to utilize green technologies

"  Availability of local talent


Fewer companies locate the recovery site beyond 1000 miles

What is the distance between your primary data center and your furthest backup data center, in miles?

Base: Disaster recovery decision makers and influencers at businesses globally with a recovery site (percentages may not total 100 due to rounding)

21%

15%

11%

11%

14%

17%

13%

22%

15%

10%

6%

13%

13%

20%

Less than 25 miles

25 miles to less than 50 miles


100 to less than 250 miles


500 to less than 1000 miles

Greater than 1000 miles

2007 (n=238)

2010 (n=180)





Recommendations

Agenda


Recommendations for getting started

•  Before you begin, make sure you know the business requirements for your facility: •  Availability and resiliency (Tier III or Tier IV?) •  Future growth (ability to accommodate acquisitions or new products,

etc.). •  Speed to market (how quickly do you need to be able to provision new

capacity?)

Define business requirements

•  However you provision your data center, knowing your current and future capacity is key to achieving ROI.

Start capacity planning

•  Even if you plan today for future IT growth, business requirements are constantly changing.

•  Plan with your data center provider or architect your facility for flexibility.

Plan for future flexibility

Operational Insights

Chris Nicolini, Director of Data Center Operations

for Windstream Hosted Solutions

20

Windstream Corp. Snapshot"

•  $4 billion in annual revenues

•  10,000 employees

•  29 states and District of Columbia

•  Data centers: 13

•  60,000 route miles of local and long-haul fiber network

21"

S&P 500 company with full suite of IP-based voice and data services, MPLS networking, data center and managed hosting services and communication

systems to businesses and government agencies

22

Presence

Trusted by Top Brands

23

Biotech/Healthcare Retail/Consumer Technology Banking/Finance Digital Media

Data Center Overview

!  Tier II and III, SAS 70 Type II compliant data centers

!  System + System uninterruptible power supply (“UPS”) systems, and carrier neutral network connections

!  Heating, ventilation and air conditioning (“HVAC”) systems to maintain temperature and humidity within strict tolerances

!  Hardened facilities with automated facility management tools

!  Fire control with early warning smoke detection, clean agent suppression and/or dry-pipe sprinkler system

!  24 x 365 NOC & facilities staff provide for high security externally and internally

!  Service Level Agreement (“SLA”) backed guarantee of 100% power availability

!  Modular builds - most expansions are less than four years old (10k sf or larger)

!  24-36 in raised floor no open systems or racks

24

Build vs. Buy

25

Redundant Internet

$1250 - $2000 / sqft – Initial Cost

1000 sqft data center = $1.25 -$2.0 Million in CAPEX

*Maintenance & Repair = $150K - $250K / year

* Does not include maintenance on IT / Network Equipment

- All costs except utility power are fixed in the short term

Human Capital = $150K - $400K / year

Utility Power Cost = $300K-600K / year

Costs of building Data Center Space

Distractions from your core competency

!  Facility Infrastructure Maintenance !  Capacity Management !  Physical Security

26

Infrastructure Maintenance

!  Facility Maintenance is a full time function

!  Generator (M, Q, A) !  ATS (A & 5yr) !  Switchgear (A & 5 yr) !  UPS (Q and A) !  Batteries (Q, A, and 5 yr) !  PDU (Annual) !  HVAC (Q) !  Fire (S & A)

M = Monthly, Q = Quarterly, S = Semi-Annual, A = Annual, and 5 yr = 5 year

27

Capacity Management

HVAC !  Power Density growth

28

Power !  Redundancy at the Panel, PDU, UPS, Gen, and Utility !  Seasonality - 35% swing causes overages

Internet Capacity !  Circuits sized for average speeds are overwhelmed by

seasonal traffic or single upstream provider outage

Areas often overlooked:

Physical Security

29

Redundant Internet Redundant Internet

!  24/7 staffing for security takes a lot of effort

!  Complete Physical Security is hard to achieve !  Camera system storage is time consuming and expensive !  Card and Biometric systems require constant monitoring /

maintenance !  Documentation for Receiving / Shipping of packages and critical

media is difficult

!  Compliance Concerns !  SSAE 16 Standards are very high !  Compliance standards are “Order Qualifiers” for hosting providers

Summary

Q&A

30

31