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T1R Industry Insight Internet Data Center Selection and Supply

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Expert in colocation, data centers, Internet infrastructure, content delivery ... 2003: Recovery starts, data centers acquired for pennies on the dollar ... – PowerPoint PPT presentation

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Title: T1R Industry Insight Internet Data Center Selection and Supply


1
T1R Industry InsightInternet Data Center
Selection and Supply
Daniel Golding
Vice President and Research Director
2
Overview
  • Tier 1 Research specializes in hosting, Internet
    infrastructure, Software as a Service (Saas), IT
    Services, content delivery networks
  • Daniel Golding, Vice President and Research
    Director
  • 10 Years of experience at major Carriers and ISPs
  • Global Peering Manager for AOL during major
    expansion
  • Currently Chairman of Global Peering Forum
  • Expert in colocation, data centers, Internet
    infrastructure, content delivery

3
What is Colocation
  • What is colocation?
  • Outsourced data center
  • Space, power, possibly managed services
  • Not conventional IT outsourcing
  • Not running your data center - its their own
    facility
  • Two flavors
  • Carrier - RBOCs and PTTs
  • Carrier Neutral

4
What is colocation
Carrier Carrier Neutral
5
What is Colocation
  • Carrier vendors provide traditional managed
    hosting -
  • Server management
  • Database
  • Storage
  • Carrier neutral vendors may provide
  • Traditional managed services
  • Internet interconnection services

6
What is not Colocation
  • Shared hosting and dedicated hosting
  • Private Rack -style dedicated hosting
  • IT outsourcing
  • How to tell?
  • Physical access to equipment
  • Who owns equipmentusually
  • Ability to put in whatever hardware is desired

7
Colocation Pricing
  • Space (square foot or cabinet)
  • 600 to 1600 per cabinet
  • 25 to 60 per square foot
  • These are all monthly prices - not annual
  • Prices vary based on market, quality, carrier
    neutrality
  • Supply/Demand drivers in charge, not cost of goods

8
Colocation Pricing
  • Power
  • Frequently sold on a per amp basis - 20 or 30 amp
    circuits
  • Metering getting more common
  • True utilization of power is tough to gage
    without a meter
  • Managed Services
  • Remote hands
  • Managed network, security, database, OS

9
Colocation Quality
  • Significant quality differences in colocation
    facilities
  • Premium Colocation facilities
  • Power at least N1 in all components
  • UPS, Generator sets, transformers
  • N1 Cooling
  • Multiple fiber entrance facilities
  • Modern fire suppression and detection
  • 24x7 staffing and security
  • Tier III/IV, roughly

10
Colocation Quality
  • Significant quality differences in colocation
    facilities
  • Standard Colocation facilities
  • Less than Premium
  • Generally less power redundancy
  • Older facilities
  • Generally Tier II
  • If there are not n1 generators, its not premium

11
How to pick a colocation facility
  • Selecting a colo facility is entirely
    requirement-driven
  • What are your requirements?
  • Profiles
  • Enterprise
  • Carrier
  • Content Provider/CDN
  • Software as a Service

12
How to pick a colocation facility
  • Enterprises want
  • High level of reliability
  • Cost is less important
  • High touch customer support
  • Longer leases/contracts
  • More managed services
  • Carrier choices (but not peering)
  • Enterprise profile F500/G2000 through SMB

13
How to pick a colocation facility
  • Service providers and CDNs want
  • Reliability less important
  • Cost more important - very price sensitive
  • Shorter leases - 1 year
  • No managed services, prefer automated customer
    service systems
  • Need space available!
  • High power density (CDN)
  • Profile ATT, Verizon, Akamai, BT

14
How to pick a colocation facility
  • Software as a Service Providers want
  • Carrier choice - more is better
  • Managed services - SaaS specific
  • Developer playgrounds
  • Marketing assistance
  • Merchant banking
  • Enterprise-style customer service
  • Many SaaS providers would be better off with a
    full managed hosting solution

15
A Trip in the WayBack Machine
  • 1999 Boomtime, selling pet food on the Internet
    Build data centers
  • 2001 Bottom drops out New data centers are
    empty
  • 2003 Recovery starts, data centers acquired for
    pennies on the dollar
  • 2005 Data centers start to fill up, but no new
    cash for sector

16
Colocation Status, Summer 2007
  • Market for colocation space is tightly
    constrained
  • Primary constrains are power and cooling, not
    floor plate
  • Most highly utilized colocation facilities
  • Premium Quality
  • Carrier Neutral
  • Top Markets

17
Colocation Growth Drivers
  • Carriers and content providers
  • Internet is growing - 75 to 100 a year
  • Driven by video and media
  • Move to VoIP
  • Enterprises and integrators
  • SOX, Disaster Recovery, Business Continuity
  • Obsolescence of enterprise data centers
  • High cost of construction

18
Supply/Demand
19
Colocation Status, Summer 2007
  • Supply is up, but demand is up faster
  • In North America, demand up 14.7, supply up 6.5
  • Utilization numbers seem low, but are deceptive
  • Packing issues
  • Power/cooling issues
  • Installation issues
  • Will never reach 100

20
Colocation Status, Summer 2007
  • Top Global Colocation Markets

21
Supply/Demand
22
Supply/Demand
23
Why is there a shortage?
  • If theres such a demand, why isnt supply
    following?
  • It will eventually
  • Its too early - capital not willing enough
  • Whats hold the money back?
  • Memories of the bust
  • Concerns about an overbuild - condos
  • Cost of construction - 1200 - 1300 sq ft

24
Why is there a shortage?
  • Why are they so expensive to build?
  • Not just a shell (50/sq ft)
  • Generators, UPS, HVAC
  • Expensive and a long wait
  • The right location is important
  • Cost of land, power
  • Availability of optical fiber
  • Server-Hugging behaviors influence location

25
But I heard there was a glut!
  • During June 2007, rumors of a data center glut
    started
  • T1R believes these were started by a Wall Street
    research analyst
  • Either foolish or uninformed
  • There is not glut because a massive data center
    construction boom never started
  • There may be a glut one day - but not yet

26
Colocation Futures
  • What are the trends for new colocation
    construction?
  • Higher quality - most new starts are premium -
    Tier III-ish
  • Higher power density - 120 to 250w/sq ft
  • Larger - most new sites are 100k sq ft
  • Some are shells with multiple phases
  • Carrier neutrality is prized
  • These trends are set for 3-5 years

27
Major New Facilities
Equinix
28
Major New Facilities
365 Main
29
Major New Facilities
Savvis
30
More New Facilities
  • London Interxion and IXEurope
  • Paris IXEurope
  • Atlanta Quality Technology
  • Phoenix I/O Data Centers
  • New facilities on the way, but too few
  • We havent seen the end of explosive demand
    growth

31
Conclusion
  • Thanks! Any Questions?
  • Daniel Golding
  • Dgolding_at_t1r.com
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