HOW$TO$PREPARE$ADATACENTER STRATEGY$Presented by: Gary Davis Principal PlanNet Consulting (714) 982-5886 Steve Miano Principal PlanNet Consulting (714) 982-5820

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


11/18/2007PRISM outage

7/11/2007Over Temp

from Power Failure

12/31/2008Failed UPS

Transfer6/30/2008Spokane ATS Failure


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

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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!

Documents

HOW$TO$PREPARE$ADATACENTER STRATEGY$Presented by: Gary Davis Principal PlanNet Consulting (714) 982-5886 Steve Miano Principal PlanNet Consulting (714) 982-5820