RE: Data Center Audit & Strategy Report

708-597-0111 www.mdiaccess.com [email protected]

12300 Keeler Avenue, Alsip, IL, 60803

Page | 1

September 18, 2017

RE: Data Center Audit & Strategy Report

Enclosed please find MDI’s Data Center Audit & Strategy Report, prepared for We will schedule a follow up discussion after you and your team have the opportunity to read through the report.

Sincerely,

MDI Access

Robert J. Heiderscheidt

President

Enclosures



Page | 4

At some point the dry coolers were not able to keep up with the load

and a cooling tower was added to supplement the capacity of the dry

coolers. The cooling tower is in bad shape. Water availability for the

tower is also a concern.

Existing Cooling Tower; Temporally Supported

The CRAC units have a useable life of 20 years. They were installed in

2000 so they are nearing end of life. Except for one unit in the

colocation area (waiting on a part) all units are in working condition.

Note – the original drawings show a third CRAC in the electrical room

(AHU # 19) that was not installed. Per the onsite staff, all CRACs are

running and all have the Humidification and Reheat features disabled.

Existing CRAC Units



Page | 5

HVAC Recommendations

5-Year Plan 10-Year Plan 20-Year Plan

Install cold aisle containment

throughout cabinet

colocation.

Install more reliable water

supply for cooling tower.

Turn off ½ the CRAC units.

Rebalance air distribution

system.

o Include closing 90%

of the grills in the

unoccupied areas.

Install hot aisle containment

throughout colocation.

Replace existing system with

Rooftop critical system with

air side economization.

Tie into existing ductwork.

Disconnect and remove

interior CRACs.

Rebalance air distribution

system.

Give back 25% of floor space.

Take 10,000 SF in same

building.

Install new 1 MW Data

Center.



Page | 6

Electrical

was originally built as a Colo.com site in 2000. The current electrical system is a mix of mostly

original systems and a few new systems. Each of the systems is detailed below with a description of the system,

useful life, age, current condition, and recommendations for the next 5, 10 and 20 years.

Generator The facility has a single 2,000 kW (3,000 Amp) Caterpillar diesel

generator which was installed in 2000. The system is currently using

approximately 45% of capacity (900 kW of the 2,000 kW). The

generator has a 3,000 gallon diesel belly tank. The useful life on a

generator is 30 to 40 years. This unit is in good condition and has been

run for a total of 696 hours, mostly during testing. The generator was

placed into service in an N configuration with a tap box for a roll up

generator.

Recently the ATS associated with the generator suffered a malfunction

due to weather and partial utility outage. The ATS has since been

repaired.

Existing 2MW Generator



Page | 7

Electrical Recommendations


Keep existing generator.

Implement a more intrusive

maintenance program with a

detailed scope to be

performed on a quarterly,

semi-annual, and annual

basis based on

manufacturers

recommended best practices.

Possible requirement for a

2N Generator. Rent (or

purchase) a roll up generator

sized for the new tenant’s

power draw. Reconfigure the

roll up tap box to an ATS. It

is doubtful the landlord

would install and rent kW on

a new generator for 5 years

or less.

Keep existing generator.

Implement a more intrusive

maintenance program be put

in place with a detailed scope

to be performed on a

quarterly, semi-annual, and

annual basis based on

manufacturers

recommended best practices.

Possible requirement for a

2N Generator. Reconfigure

the roll up tap box to an ATS

and depending on size of

requirement:

Rent (or purchase) a roll

up generator sized for

the new tenant’s power

draw.

Have the landlord install

the second generator

and lease kW.


building.


Center.



Page | 8

DC Power Plant

The facility was originally designed with a 200 kW (4,000) Amp DC

Power System. The original batteries were removed and have been

replaced with a single rack of batteries. The DC power is currently

distributed by an A & B BDFB located outside and adjacent to the DC

Room. The DC power is being used by the facilities’ telco providers

and (2) tenants. The draw on the system is very light at 6.4 kW.

Existing A/B Side Battery String

Former Battery Pads



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DC Power Plant Recommendations


Keep existing system.

Maintain and replace

batteries as required.

Replace the existing system

with (2) 400 Amp 48 Volt DC

Rectifiers to be located

between the two BDFBs.

The new rectifiers will both

fit on a single 23” rack.

The new rectifiers should be

fed from the UPS System.

Relocating the DC Rectifiers

will free up the existing DC

room for future

infrastructure or a dedicated

tenant.


building.


Center.



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UPS Equipment & PDU Distribution

Critical AC power for the facility is provided by various UPS systems.

The first system is comprised of (3) 255 KVA Eaton 9395 UPSs tied

together to provide 500 kW in an N+1 configuration. The parallel

board feeds to PDU’s (X1 & Y1) which feed various loads throughout

the colocation facility via RPPS. The RPPs provide individual circuits

for the end users via pipe and wire. Critical power usage through this

system is approximately 33% or 165 kW.

The second system is comprised of (12) 60 kW standalone Blade UPSs.

These UPSs are fed from one of two PDUs (Z1 & Z2). Critical power is

distributed throughout the colocation and MDF areas via RPPs located

at the end of rack rows. The RPPs provide individual circuits for the

end users via pipe and wire. Critical power usage through this system

is approximately 31% or 230 kW.

Existing UPS



Page | 11

UPS Equipment & PDU Distribution Recommendations


Keep existing systems.

Maintain and replace

equipment and batteries as

required.

Install (2) new 500 kW UPSs

brought into a parallel board

with a future spot for a 3rd

500 kW UPS.

Dedicate an area for new

data center and install

Starline distribution.

Migrate all new and existing

customers to the new data

center area.

Give back half of the existing

space to the landlord at the

end of 5 years.


building.


Center.



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5, 10 & 20-Year Plan; TCO & ROI Below we have shown three tables and a floor plan thumbnail indicating the rough order of magnitude pricing as well as the anticipated savings if the 5, 10 & 20-year recommendations are followed. The ROI is listed as well for each scenario. Note that ROI projections do not account for an increase or decrease in sales for all scenarios:



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PUE Utility kW Overhead kW Critical kW HVAC kW SQ FTCurrent 2.10 835 435 400 116 28,000

Projected 1.76 705 305 400 166 28,000 Spare 1,296 576 720 50 10,000

Cost Per Current Projected Monthly Annual Months YearsMonthly Electric Cost 0.0980$ KWH 58,918 49,630 (9,287) (111,447)

Rent 0.8433$ SQFT 23,613 23,613 - - Monthly CAM 0.1125$ SQFT 3,150 3,150 - -

OP EX 85,681 76,394 (9,287) (111,447) (23) (1.92)

CAP EX % $System Unit Capacity Config Cost Savings Savings Months Years

HVAC Ton 285 N+1 213,750 30% 9,287 23 1.92 Generator kW 2,000 N - - - - UPS kW 1,120 N+1 - - - - PDU kW 1,120 N+1 - - - - DC Plant kW 200 N - - - - BMS EA - Data Trax - - - - Fire Suppression SQFT - Pre-Action - - - - Fire Detection SQFT - VESDA - - - - Lighting kW 29 N - - - - New Data Center Space SQFT - White Box - - - -

Total CAP EX 213,750 9,287

Keep same square footageInstall minor cooling upgrades, all other system remain as is.Reduction of PUE from 2.1 to 1.76CAPEX Cost of $213,750OPEX Savings $9,287Estimated 1.92 Year Payback

Note: Projections assume no increase in or loss of monthly sales. -

Payback

CAP EX & Resulting OP EX Considerations

September 15, 2017

Increase (Decrease)

5 Year Illustration

Existing - no work

Payback

Existing - no work Existing - no work

Work

Existing - no work Existing - no work Existing - no work Existing - no work Existing - no work Existing - no work

Containment, rebalance, improve water supply

to tower, increase supply temp



Page | 15 PUE Utility kW Overhead kW Critical kW HVAC kW SQ FT

Current 2.10 835 435 400 116 28,000 Projected 1.60 639 239 400 178 21,000

Spare 361 161 200 62 -


Rent 0.8433$ SQFT 23,612 17,709 (5,903) (70,837) Monthly CAM 0.1125$ SQFT 3,150 2,363 (788) (9,450)

OP EX 85,680 66,176 (19,504) (234,049) (192) (16.01)


HVAC Ton 300 N+1 1,800,000 35% 10,835 166 13.84 Generator kW 1,000 N+1 750,000 0% - - -

UPS kW 500 N+1 375,000 3% 929 404 33.65 PDU kW 500 N+1 200,000 0% - - -

DC Plant kW 200 N 85,000 2% 282 301 25.10 BMS EA 1 Niagara 75,000 0% - - - Fire Suppression SQFT - Pre-Action 100,000 0% - - - Fire Detection SQFT - VESDA 50,000 0% - - - Lighting kW 29 N 62,000 75% 767 81 6.73

New Data Center Space SQFT 16,800 White Box 250,000 0% - - -

Total CAP EX 3,747,000 12,813

Give back 7,000 square feet of exising spaceNew 1 MW generator and (2) new 750 kW UPSReduction of PUE from 2.1 to 1.6CAPEX Cost of $3,747,000OPEX Savings $19,504Estimated 16.01 Year Payback

Note: Projections assume no increase in or loss of monthly sales.

Reconfigure Existing Reconfigure Existing Change 250 fixtures to LED Give back 25 % of space, demo as necessary,

demise space

Increase (Decrease)

2 new 400 Amp Rectifiers - refeed existing

distribution Replace entire BMS System

New rooftop cooling, hot aisle containment,

rebalancing, demo and remove CRACs & tower Add one new 1 MW Gen Install (2) new 500 kW UPS with future space

for a 3rd 500 kW UPS Refeed existing PDUs add (2) new PDUs

Work


September 15, 2017

10 Year Illustration

Payback

Payback



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PUE Utility kW Overhead kW Critical kW HVAC kW SQ FTCurrent 2.10 835 435 400 116 28,000

Projected 1.50 600 200 400 116 10,000 Spare 400 200 200 134


Rent 0.8433$ SQFT 23,612 8,433 (15,179) (182,153) Monthly CAM 0.1125$ SQFT 3,150 1,125 (2,025) (24,300)

OP EX 85,680 48,353 (37,327) (447,922) (214) (17.86)


HVAC Ton 250 N+1 8,000,000 65% 20,122 398 33.13 Generator kW 1,000 N+1 0% - - - UPS kW 750 N+1 0% - - - PDU kW 750 N+1 0% - - -

DC Plant kW 200 N 0% - - - BMS EA 1 Niagara 0% - - - Fire Suppression SQFT - Pre-Action 0% - - - Fire Detection SQFT - VESDA 0% - - - Lighting kW 29 N 0% - - -

New Data Center Space SQFT 10,000 White Box 0% - - -

Total CAP EX 8,000,000 20,122

Build New 10,000 SQ FT Data Center inside the BuildingAll systems new 750 kW Critical power N+1 ConfigurationReduction of PUE from 2.1 to 1.5CAPEX Cost of $8,000,000OPEX Savings $37,327Estimated 17.86 Year Payback

Note: Projections assume no increase in or loss of monthly sales.

100% 1MW New Data Center with N+1

configuration. To be installed

PaybackWork

New N+1 New N+1 New N+1 New N+1

2 new 400 Amp Rectifiers - refeed existing

distribution Replace entire BMS System New Pre Action New VESDA New LED


September 15, 2017

20 Year Illustration

Increase (Decrease) Payback



Page | 17

Notes: Existing PUE Calculation was based on the June-July & July-August Utility bill received from Critical Usage was verbally dictated to us by See table below.

Description May-Jun Jun-Jul Jul-Aug

Reading Start Date 5/17/2017 6/16/2017 7/18/2017

Redaing End Date 6/16/2017 7/18/2017 8/15/2017

Days in Reading 30 32 28

KWH Used 601,547 637,123 563,257

Total Usage 835 830 838

Critical Usage 400 400 400

PUE 2.09 2.07 2.10

Cost KWH 0.0964$ 0.0939$ 0.0988$

Monthly Bill 57,980$ 59,834$ 55,674$

PUE Calculation



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Existing Spatial Use MDI Access (MDI) was on-site this past August 16th and 17th. The information below summarize our findings on the existing spatial use of the existing facility. In summary, the facility is greatly underutilized and as rent costs are projected to increase, efforts to consolidate and potentially reduce square footage are strongly advised. While the excel file indicating the existing income and existing kw utilization was not received, simply looking at the floor plan will show that approximately 70% of the colocation floor is devoted to cages of various sizes and utilizations. In the absence of receiving the requested information, should look at the spatial utilizations and compare them to the income generated from each use type. Verbally we were told that the spilt is 1/3 Cloud, 1/3 colocation & 1/3 Cage from a revenue standpoint. If you can eliminate 70% of your floor utilization and only eliminate 33% of your revenue, this would be a recommended course of action. Another course of action would be to off load the cloud product to a wholesale data center. Once the complete information is received a heat map can be generated for critical kW, Bandwidth requirements & Lease Termination. should review the lease terminations of each customer and ensure that the lease termination is co-terminus with the lease of the physical space. Only looking at the cabinet portion of the colocation space. There are 135 cabinets installed. 41 of the 135 (30%) have no equipment within them. Looking at the Space Utilization Floor Plan and utilization chart below, we’ve indicated the approximate percentage of physical utilization of each cabinet. Assuming that the 75% and 100% cabinets have no growth potential; we estimate that the colocation portion of the floor plan can be consolidated into 67 cabinet positions, a 42% reduction of cabinets.

% Total Cabinets Percentage Consolidate

0% 41 30% -

10% 10 7% 3

25% 14 10% 7

50% 26 19% 13

75% 22 16% 22

100% 22 16% 22

135.00 100% 67.00

Colocation Utilization



Page | 19

Existing Architectural Background

Existing Floor Plan



Page | 20

Existing Occupied vs. Vacant Colocation Space

Existing Floor Plan



Page | 22

Suggested Spatial Alternatives

MDI has proposed two solutions within the existing building. If the goal is to ‘ride out’ the current building and infrastructure should consider the option of simply migrating out of approximately 6,928 SF of space, this is the suggested alternative within the ten-year plan. The twenty-year plan contemplates building a new 10,000 SF data center within the existing building in the space currently occupied by the furniture vendor. This would allow to build out a space utilizing the latest in cooling and design, maximizing efficiency. would migrate existing customers and potentially the cloud offering into this space with the eventual goal of abandoning their current footprint. See the twenty-year plan for a plan diagram of this proposed solution. Other alternatives are available, new construction, the leasing of space in different building or the purchase and renovation of an existing building. These scenarios were addressed in previous reports provided to



Page | 23

Existing Contractual & Financial Obligations

provided MDI with the lease and amendments governing its right of occupancy in the Building. The lease was originally executed on February 1, 2003, between and Castle & Cooke Carrier Hotels, LLC (“CCCH”). maintains its right of occupancy through January 31, 2020, via amendments incorporated to the original lease document. also provided two offer sheets from . The first offer sheet contemplates an eight year extension from the current termination date. The second offer sheet contemplates a Joint Venture between and

Current Lease & Amendments

The lease executed between CCCH and strongly favors the Land Lord, leaving little recourse in the event that CCCH defaulted on its obligations. Specifically, ¶ 20 of the lease identifies six (6) separate events of default under the lease.

a) Failure to pay rent;b) Tenant abandonment;c) Tenant failure to comply with permitted use;d) Tenant failure to provide an estoppel certificate;e) Tenant failure to meet lease terms, conditions, or agreements; andf) Tenant declaration of bankruptcy.

The lease does not identify any “event of default” that Tenant may use to its advantage. The lease language expressly denies Tenant any meaningful remediation rights in the event defaults on its four primary obligations under the lease. (See, § 7, ¶ (d) of the original lease). The lease does not provide for “outage credits” – an offering that is now standard across SLA documents executed in data center facilities.

The lease may be read to obligate Tenant to pay for improvements or replacements to any equipment listed in Exhibit A-1 to the lease. (See § 8, ¶ (c) of the original lease). This obligation would run even in situations where Tenant has not acted willfully, wrongfully or even negligently in utilizing the equipment for normal business operations. The lease may also be read to transfer title associated with personal property procured by Tenant to the Land Lord, simply by virtue of installing Tenant’s personal property on the Building premises. (See § 9, ¶ (a), § 9 (c), of the original lease).

The lease places severe restrictions on right to transfer lease rights. (See, generally, § 13 of the original lease). The lease only permits three specific types of transfer rights without prior Land Lord consent. In addition, the lease provides for a transfer tax on the Tenant in the event of any transfer. (See, generally, § 13, ¶ (f) of the original lease). To better protect itself, should condition any future lease extension on a newly drafted lease, rather than extension by amendment to the current lease.

CAM / Utility Bills

provided its 2017 CAM adjustment for its suite in the building. The CAM adjustment shows an annual CAM cost of $1.35 per sq. ft. CAM billing from the 2017 statement appeared to be in line with CAM obligations written in to the original lease. Landlord’s proposals envision an increase from $1.35 per sq. ft. in CAM to $2.16 per sq. ft. over the life of a new lease. This jump would cause an additional $22,673.52 in OP EX for



Page | 25

Despite the offer of a one-time $200,000.00 credit from towards the total cost of the lease obligations, this option appears less suitable for than the 10 year lease extension offered. It comes at a greater cost and with greater risk than the simple Landlord-Tenant proposal offered on July 28, 2017.

Figure 1 - Note, this analysis assumes a near 50% reduction of power cost, which MDI does not believe will be achieved simply through financing another generator or more HVAC equipment. Also note, MDI has not included the $200,000.00 credit offered by in these numbers, nor has MDI projected the effects of revenue sharing with the a newly established JV.

A JV between and could be warranted and may be advantageous to long term business goals. However, at the terms suggested in JV offer sheet, this option should be viewed as a non-starter. By the end of the lease term, will have fully paid for the improvements to the parcel, without owning any of the improvements outright. rent obligations would steadily increase, and it would be expected to share a portion of its existing revenues with

Space Reduction / Gradual Exit

Absent presenting a more palatable long term lease or JV scenario, best option may be planning for space reduction or a gradual exit from the building. services colo and cloud customers out of its suite in the building. While cannot simply leave the premises without defaulting on service contracts for its colo customers, it does not appear that requires all 27,992 sq. ft. of existing space to make good on its contractual obligations to customers.

may be able to reduce its footprint in the building by approximately 7,000 sq. ft., while continuing to service customers requiring a physical presence and proximity to the area. It can then take its true cloud customers to different markets, letting them serve as “anchors” in a different region or facility.



Page | 27

Figure 2 shows the average occupancy rate in the Industrial market between 2012 and 2017.

Figure 3 shows the average occupancy rate in the Industrial market between 2012 and 2017.



Page | 28

Figure 4 shows the average vacancy rate in the Industrial market between 2012 and 2017.

Figure 5 shows the average rental rate in the Industrial market between 2012 and 2017.



Page | 29

Based on MDI’s review of existing critical infrastructure systems, existing spatial use, and existing contractual obligations, we propose the following recommendations for consideration:

“Choose a direction”;

Plan to downsize the existing foot print within the building, or, alternatively, migrate to anewly built space within the building achieved via new SLA with ;

Rebalance the air distribution system in the current facility;

Install cold aisle containment throughout cabinet colocation;

Shut off multiple CRAHs;

Replace batteries as required;

Put a broker in front of negotiations with building;

Develop an RFP process for space in , , and any other markets desirable;

Complete MDI revenue spread sheet for a true look at revenue and cost associated with each client;

Renegotiate full lease terms, rather than achieving lease extension by simple amendment;

Avoid, where possible, any additional CAP EX outlay for improvement in the current suite.

is best served by negotiating with for a newly built data center space within the building that allows for a realignment of its current IT load. will likely need to prepare for paying a kw rate rather than sq. ft. rate. At the same time, should pursue an RFP process that allows for it to move its local colo business to another data center space in the area, should negotiations with for an improved data center space fail.

During prior conversations, has discussed its desire to move to sell out of a higher Tier market (N. Va. and Chicago have been discussed, and each enjoys Tier I market status). Should need to seek alternative space from the building, or with an existing provider inside the building, it would be wise to start an RFP process for different spaces in target markets. would also be served by filling out MDI’s revenue .xls, to get a better feel for the true cost / revenues associated with every one of its clients.

It has been our pleasure to prepare this Data Center Audit & Strategy Report for We are available to schedule a follow up discussion on the document and its contents once you have had the opportunity to review. Thank you for choosing MDI to perform this service.

Summary of Recommendations

Documents

RE: Data Center Audit & Strategy Report