HOW TO PREPARE A DATA CENTER STRATEGY What you need to know to build a business case for Data Center sourcing
Presented by: Gary Davis Principal PlanNet Consulting (714) 982-5886
Steve Miano Principal PlanNet Consulting (714) 982-5820
www.plannet.net
Agenda
ü What is a Data Center strategy? ü Ge;ng started ü Assessing the current state ü Developing a future state model ü Building a business case ü What your decision-‐makers want to know ü Case studies
Data Center Strategy
A Data Center Strategy is usually iniBated for any or all of the following reasons:
ü Data Center failures are impacBng the business ü Growth is expected to exceed power, cooling and/or space capaciBes ü Risk – real or perceived ü Lowering Cost of OperaBon ü Improve systems availability and disaster recovery ü Inform a decision to build, co-‐locate or a combinaBon of approaches
Ge;ng Started
Define your objecBves ü Business drivers ü Technology imperaBves ü Desired outcome
Assemble a Core Team ü IdenBfy/appoint a project sponsor
• Sponsorship typically comes from Real Estate, FaciliBes or IT
ü Typical make-‐up of a Core Team • FaciliBes representaBve (VP, Director) • IT representaBves
– CIO, IT Infrastructure VP, Network, user representaBve(s) • Procurement, sourcing and finance
IdenBfy Stakeholders
ü A Data Center strategy has many stakeholders
ü It’s criBcal to engage to appropriate stakeholder resources to gain consensus and eliminate surprises
ü Missing a key stakeholder is analogous to missing a Bre on your car
Gather InformaBon
Formalize the project with a Stakeholder kick-‐off
ü Introduce the iniBaBve and objecBves
ü Layout Bmelines ü Set expectaBons
Assessing the Current State Develop and issue a Comprehensive Request for InformaBon and meet with Stakeholders to gather informaBon ü Some of the informaBon is
available electronically (e.g., CMDB, As-‐Built drawings, energy bills, etc.)
ü Some of the informaBon will be drawn out in Stakeholder meeBngs (e.g., applicaBon por\olio, financial models, etc.)
RFI Categories
ü Equipment/applicaBon inventory ü Data Center FaciliBes ü Real Estate ü OperaBons ü Network ü Business Systems & Services ü Business ConBnuity ü Finance ü Growth & Capacity Planning ü IT Strategic Plan
Assessing the Current State
Key Points ü Establish current demand load KW is the currency ü Determine historical demand growth (3-‐5 years) ü Assess exisBng facility’s aaribute and constraints (e.g., Tier raBng,
power, cooling, space, SPOCs) ü IdenBfy applicaBons and their Ber levels ü IdenBfy network constraints (e.g., latency sensiBve applicaBons) ü IdenBfy adjacency requirements/constraints ü IdenBfy key business & IT iniBaBves (e.g., new business ventures,
merger/acquisiBon, virtualizaBon, etc.) ü Document outage history (many execuBves are unaware of outages)
1/1/2007 10/26/2009
4/1/2007 7/1/2007 10/1/2007 1/1/2008 4/1/2008 7/1/2008 10/1/2008 1/1/2009 4/1/2009 7/1/2009 10/1/2009
3/12/2007UPS Failure
16 hour outage4,000 hours recovery effort
5/16/2008Power Upgrade
Outage
23 hour outage5,800 hours recovery effort
11/18/2007PRISM outage
7/11/2007Over Temp
from Power Failure
12/31/2008Failed UPS
Transfer6/30/2008Spokane ATS Failure
25 hour outage6,300 hours recovery effort
6/25/2009Fire PanelAC Outage
12/8/2008Sprinkler WorkPower Outage
Outages….what outages?
Future State
IdenBfy the future state scenario ü Establish operaBonal objecBves and service levels ü Establish availability targets
• Tier RaBng • Geography
ü Determine efficiency objecBves (PUE) ü Define sustainability goals ü Consider adaptability needs
Plan for the Unplanned
Establish the Future State Determine relevant sourcing models
ü Co-‐LocaBon ü Greenfield ü Tenant Improvement ü Retrofit ExisBng FaciliBes ü Cloud/Services
Select markets to be evaluated ü Ideally, markets with co-‐locaBon opBons, cheap power and free-‐
cooling potenBal ü Determine business affinity to parBcular markets
• ExisBng operaBons • Business drivers • ExisBng or future real estate or facility programs
Establish Demand Forecast
Align business growth with IT growth ü OpBmize IT deployment as part of the deployment of a new data
center
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FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Capacit
y Dem
and -‐
k Watts
Capacity Demand Forecast
Un-‐optimized Managed Optimized
Establish Demand Forecast
ü Establish capacity threshold vs. demand forecast ü Depict historical growth with future planning ü IdenBfy strategies to miBgate capacity constraints
Define Day 1/Day 2
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k Watts
Site 1 -‐ Production Buildout Phases
Managed Forecast Deployed Capacity
*DAY 1: 3,900 kW, 22.5K SF
*DAY 2: 7,900 kW, 22.5K SF
Plan for incremental deployment based on demand forecast
Market Analysis
Energy ü Rates vs. Nat’l average ü Sustainability ü Free cooling ü Reliability
TelecommunicaBons ü Diversity ü RelaBve costs ü Latency
Labor ü Availability ü RelaBve costs
FaciliBes ü Control/Lease Terms
TransportaBon/Accessibility ü Flight Availability ü Door to Door Time
Vendor & Services Support ü Proximity to criBcal vendors
Environmental Risk ü Seismic/Volcanic ü Hurricane/Tidal ü Severe Weather
IncenBves (very dependent on properBes) ü Enterprise Zones ü Sales Tax ü Energy rebate programs
Qualitative Metrics use to disqualify markets
QualitaBve Market Rankings What’s
important to you? Keep it simple
Building a Business Case
Determine Capital Expenditures Determine OperaBonal Expenditures Develop a MulB-‐Year Total Cost of Ownership for each model (5/10 yr) Compare TCO for each model
OPEX ü Lease costs ü Power ü Maintenance ü Facility Management ü Security ü IT OperaBons Staff ü TelecommunicaBons ü Services ü Sales Tax ü MigraBon
Determine CapEx & OpEx
CAPEX ü ConstrucBon & Sok Costs (Greenfield,
TI) ü Cable Plant ü Network Electronics ü DepreciaBon ü MigraBon
Prepare TCO for each Scenario
Co-Location Example
E. Washington Co-‐Lo (Phase-‐In) 2011 Start Year 1 Year 2 Year 3 Year 4 Year 5 5 year Total Year 6 Year 7 Year 8 Year 9 Year 10 10-‐ Year TotalOperating Costs
Power 46$ 96$ 154$ 166$ 178$ 641$ 192$ 205$ 220$ 237$ 254$ 1,749$ Predictive Maintenance -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$
Rent 478$ 915$ 1,244$ 1,269$ 1,294$ 5,201$ 1,411$ 1,439$ 1,468$ 1,497$ 1,527$ 12,542$ IT Staff 90$ 93$ 96$ 99$ 102$ 480$ 105$ 108$ 111$ 115$ 118$ 1,037$
Facilities Staff -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ Telecommunications 828$ 845$ 861$ 879$ 896$ 4,309$ 914$ 932$ 951$ 970$ 990$ 9,066$
Co-‐lo Setup Costs 120$ -‐$ -‐$ -‐$ -‐$ 120$ 17$ -‐$ -‐$ -‐$ -‐$ 137$ DC Equipment Sales Tax 128$ 130$ 133$ 135$ 138$ 664$ 141$ 144$ 144$ 146$ 146$ 1,384$ Operating Costs Subtotal 1,690$ 2,079$ 2,489$ 2,548$ 2,609$ 11,414$ 2,779$ 2,828$ 2,894$ 2,965$ 3,035$ 25,916$
Capital Costs DC TI -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$
Racks / Cabling 1,112$ -‐$ -‐$ -‐$ -‐$ 1,112$ 127$ -‐$ -‐$ -‐$ -‐$ 1,240$ Network Electronics 879$ 188$ 188$ -‐$ -‐$ 1,256$ 378$ -‐$ -‐$ -‐$ -‐$ 1,633$
Migration Costs 1,624$ 915$ 634$ -‐$ -‐$ 3,174$ -‐$ -‐$ -‐$ -‐$ -‐$ 3,174$ Capital Costs Subtotal 3,615$ 1,104$ 823$ -‐$ -‐$ 5,541$ 505$ -‐$ -‐$ -‐$ -‐$ 6,047$
Depreciation 1,958$ 1,288$ 1,296$ 410$ 410$ 5,363$ 328$ 290$ 94$ 94$ 94$ 6,262$ Cash Flow 5,305$ 3,183$ 3,311$ 2,548$ 2,609$ 16,956$ 3,284$ 2,828$ 2,894$ 2,965$ 3,035$ 31,963$
Total 3,649$ 3,367$ 3,785$ 2,958$ 3,019$ 16,777$ 3,107$ 3,119$ 2,988$ 3,059$ 3,129$ 32,178$
Total Cost of OperaBon Tenant Improvement Example
Seattle TI/Lease Year 1 Year 2 Year 3 Year 4 Year 5 5 year Total Year 6 Year 7 Year 8 Year 9 Year 10 10-‐ Year TotalOperating Costs
Power 297$ 320$ 345$ 371$ 400$ 1,734$ 429$ 460$ 494$ 530$ 568$ 4,216$ Predictive Maintenance 131$ 221$ 279$ 233$ 240$ 1,104$ 247$ 254$ 262$ 270$ 278$ 2,415$
Rent 462$ 476$ 490$ 505$ 520$ 2,453$ 536$ 552$ 568$ 585$ 603$ 5,296$ IT Staff 250$ 258$ 265$ 273$ 282$ 1,328$ 290$ 299$ 308$ 317$ 326$ 2,868$
Facilities Staff 147$ 151$ 155$ 160$ 165$ 778$ 170$ 175$ 180$ 186$ 191$ 1,680$ Telecommunications 828$ 845$ 861$ 879$ 896$ 4,309$ 914$ 932$ 951$ 970$ 990$ 9,066$
Other Costs -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ DC Equipment Sales Tax 131$ 134$ 137$ 139$ 142$ 683$ 145$ 148$ 148$ 151$ 151$ 1,425$ Operating Costs Subtotal 2,246$ 2,405$ 2,533$ 2,561$ 2,644$ 12,388$ 2,730$ 2,820$ 2,911$ 3,009$ 3,107$ 26,966$
Capital Costs DC TI 6,078$ -‐$ -‐$ -‐$ -‐$ 6,078$ 876$ -‐$ -‐$ -‐$ -‐$ 6,954$
Racks / Cabling 1,112$ -‐$ -‐$ -‐$ -‐$ 1,112$ 127$ -‐$ -‐$ -‐$ -‐$ 1,240$ Network Electronics 1,157$ -‐$ -‐$ -‐$ -‐$ 1,157$ 378$ -‐$ -‐$ -‐$ -‐$ 1,535$
Migration Costs -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ Capital Costs Subtotal 8,347$ -‐$ -‐$ -‐$ -‐$ 8,347$ 1,381$ -‐$ -‐$ -‐$ -‐$ 9,728$
Depreciation 796$ 796$ 859$ 796$ 796$ 4,041$ 716$ 716$ 557$ 557$ 557$ 7,145$ Total 3,041$ 3,200$ 3,392$ 3,357$ 3,440$ 16,429$ 3,447$ 3,537$ 3,468$ 3,566$ 3,664$ 34,111$
In thousands
Compare Models
Year 1 Year 2 Year 3 Year 4 Year 5 5 year Total Dif $ Dif % 10 Year Total Dif $ Dif %As-‐Is Owned 2,929$ 3,125$ 3,461$ 3,661$ 3,878$ 17,054$ -‐$ 0% 39,639$ -‐$ 0%
Optimized Owned 2,669$ 2,869$ 3,047$ 3,232$ 3,433$ 15,251$ (1,804)$ -‐11% 35,527$ (4,112)$ -‐10%Market 1 Co-‐Lo 3,145$ 3,117$ 3,281$ 3,298$ 3,383$ 16,224$ (830)$ -‐5% 33,773$ (5,866)$ -‐15%Market 2 Co-‐Lo 3,205$ 3,188$ 3,362$ 3,391$ 3,489$ 16,635$ (419)$ -‐2% 34,896$ (4,743)$ -‐12%Market 3 TI / Lease 4,388$ 3,653$ 3,900$ 3,882$ 3,993$ 19,816$ 3,620$ 21% 44,423$ 4,784$ 12%Market 4 Co-‐Lo 3,327$ 3,400$ 3,610$ 3,677$ 3,814$ 17,828$ 3,449$ 20% 38,203$ (1,436)$ -‐4%Market 5 TI / Lease 3,302$ 3,497$ 3,730$ 3,717$ 3,823$ 18,068$ 3,447$ 20% 38,071$ (1,569)$ -‐4%Market 6 Co-‐Lo 3,306$ 3,368$ 3,557$ 3,622$ 3,746$ 17,599$ 3,425$ 20% 37,778$ (1,861)$ -‐5%
Annual Operating Costs Years 1 -‐10 (in 1000's)
Scenario Analysis
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
0 1 2 3 4 5 6 7 8 9 10
Annual Operating Expense Comparison
Scenario 2 Scenario 1 Scenario 3
Annu
al Ope
rting Expe
nses
(1,000
's)
Year
Scenario 2$65.5M 10 Yr TOC
Senario 1$68.1M 10 Yr TOC
Scenario 3(Current-‐state with expansion)
$58.7M 10Yr TOC2009 w/Stabalization
2009
Case Studies
Issues
ü Aging primary data center in a high risk region
ü Sub Tier 2 design ü History of outages ü Running out of capacity ü Facing major capital expenditures to
retrofit the primary data center ü Lease expiring on Disaster Recovery
site
Results Analysis
ü Assess deficiencies of exisBng faciliBes
ü Determine amount of Bme before the DC reaches capacity
ü Evaluate low-‐risk markets ü Evaluate own vs. co-‐lo
Outcome ü Move primary DC to co-‐lo ü Retrofit exisBng DC to Tier 2 ü Repurpose exisBng DC to sub-‐
producBon and DR ü Improved availability with nominal
increases in TOC
Major Regional Bank
Global Technology Company Case Studies
Issues
ü 40+ data centers worldwide ü Growing through acquisiBon ü Unsustainable operaBng costs ü Unmanageable data center
footprint ü Business driver to consolidate
operaBons ü Latency sensiBvity from global
engineering applicaBons
Results Analysis
ü Assess operaBon efficiencies and costs ü Evaluate mulBple markets and
corporate owned real estate ü Evaluate geo-‐regional consolidaBon
alternaBves ü Analyze enterprise architecture ü Evaluate own vs. co-‐lo
Outcome ü Geo-‐regional consolidaBon (N.A,
ENAME, PAC-‐RIM) ü Deploy owned Tier 2+ ü MulB-‐site recovery ü $100M+ 10-‐year future cost avoidance
Case Study
Issues
ü Significantly high energy costs ü High-‐risk locaBon ü Planning for significant business
technology iniBaBves ü Facing future capital expenditures
to uplik primary data center
Results
} Analysis ◦ Assess deficiencies of exisBng faciliBes ◦ Determine impact of new compuBng
demand ◦ Evaluate low-‐cost markets ◦ Evaluate own vs. co-‐lo
} Outcome ◦ Expand primary DC to co-‐lo ◦ Leverage exisBng facility for business
partner and DR ◦ Recommended phased deployment to
opBmize ROI
Global Entertainment Company
Regional Healthcare Company Case Study
Issues
ü Aging primary data center in a high risk region
ü Sub Tier 2 design ü History of outages ü Running out of capacity ü Facing major capital expenditures to
retrofit the primary data center ü Affinity for in-‐State deployment
Results } Analysis ◦ Assess deficiencies of exisBng faciliBes ◦ Assess miBgaBon strategies to buy
Bme ◦ Evaluate regional markets ◦ Evaluate own vs. co-‐lo
} Outcome ◦ Move primary DC to co-‐lo in a lower
risk geography ◦ Repurpose exisBng DC to sub-‐
producBon and DR ◦ Stabilize current environment ◦ Recommended best value alternaBve
Thank you for your Bme!