Outsourcing Data Centres: The View from Europe

Nick Razey is the CEO and co-founder of Next Generation Data Limited, owner and operator of the NGD Europe mega data centre in South Wales, UK.

Nick-Razey

Data centres are one of life’s necessities. But as global demand for compute power continues to rise exponentially, driven as much (or more) by cloud and web-based applications as the traditional needs for secure data storage, many data centres, even comparatively new ones of less than 10 years, are struggling to keep up. The sheer scale of the secure physical spaces required, let alone the growing power and energy implications, are presenting data centre users and professionals with unprecedented challenges.

Jones Lang LaSalle’s last Data Centre Barometer survey among European stakeholders, including corporate users, carriers/integrators/web hosters and colocation operators and investors, found a significant swing towards outsourced solutions with around 75 percent in favor compared to just 50 percent 18 months earlier. These findings, among others, combined with the continuing solid performance and growth of local and global independent operators, show the market for outsourcing some or all of the data centre estate to third parties to be in good health.

As a speedier, nimbler and commercially more viable alternative to do-it-yourself (DIY) new build or legacy upgrade projects, data centre outsourcing clearly presents some compelling arguments and benefits.

Magnified by the continuing uncertain economic climate, the whole concept and complexity of planning, designing and building - not to mention the investment and capital expenditure involved - is making private ownership increasingly untenable. On paper, depreciating the build cost of a data centre over 15 or 20 years may appear to give a lower total cost of ownership (TCO). The reality is that an in-house facility is either sized to cope for 10 years of growth (in which case it will be massively under-utilized for many years) or it is sized for just the immediate requirement in which case it will be too small to enjoy the economies of scale of a larger data centre.

Juggling cost-benefits, space availability, investment ROI, asset depreciation, obsolescence, and making decisions about infrastructure for ensuring optimum operational efficiency, are all additional drivers behind growing appetites for outsourced pain relief.  And with IT planning horizons now reduced from the traditional 2 years to 3 to 6 months, the use of on-tap colocation space is often the only solution available.

Nevertheless, deciding to take the leap of faith and outsource is only the start of the journey. For corporate/public sector colocation occupiers and managed hosted services providers, there are still important factors to consider before selecting the most appropriate independent data centre facility.

Power, Cooling and Energy Management

Power, cooling and energy management are critical to overall resilience and uptime. Demand for power and cooling within data centres will continue with the steady increase in processor power producing the effect of increasing heat and thermal rise. More usage of high density server applications has also resulted in more intensive use of a given footprint resulting in a rise in energy consumption per square foot.

As the sole responsibility of the third party in an outsourced environment, look carefully when checking into a prospective candidate’s energy credentials.

Clearly energy cost is a central issue, and with cooling averaging 40 to 45 per cent of total operating costs for many data centres, the sustained rise in electricity charges has spurred the search for new alternatives and solutions. These include water and liquid cooling as well as nano-cooling technologies and others on the horizon that could ultimately require a complete re-engineering for certain older facilities.

Location and Security

The perceived convenience of choosing facilities in close proximity to corporate headquarters and the potential, albeit diminishing, concerns over distance on latency, led to most first generation data centres being located in or around large metropolitan areas. While after 9/11, many US organizations realized it was time to move facilities well out of town, the UK still suffers heavily from this legacy especially in the London area where newer generation facilities have and still are being built.

From a physical security perspective this presents a higher risk potential for attack or breach. Greater consideration must be given to how mission critical it is to have the  data centre in the metro area and compare with operators offering more naturally secure rural locations well away from city centres, large populations, airports and the inherent security risks these present.

To look for:

Communications Links and Latency

Decreasing costs of fibre combined with remote diagnostics are offering users real choice and potential costs savings by outsourcing to facilities located much further away. The aforementioned Jones Lang LaSalle report found around 50 per cent of corporates would consider locations in alternative countries in Europe.

To look for:

Business Continuity/Disaster Recovery

Ensure the operator has effective business continuity planning in place that can accommodate disaster recovery plans as well as orchestrate effective day-to-day communications remotely if needs be.

To look for:

Space and Scalability

Last but not least, consider the future: According to the recent  AFCOM data centre association’s ‘The State of the Data Center’ global survey of data centre managers, facilities have been expanding in size; with over 44 per cent now occupying more floor space than three years ago. Another 49.4 per cent are in the process of expanding with only 16.4 per cent having downsized.

To look for:

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