Easy Ways To Reduce Network & Data Center Buildout Costs

In this transformative economy, the search is on for new ways to create efficiency… as cliche as it sounds, to do more with less.  Looking at your data center during a move and evaluating the way the data center could be improved is one easy way realize that efficiency, right now.  The best part?  These improvements might not even cost anything!

Commonly, businesses retain the services of a single contractor to build out their space.  Call it what you like – the network closet, computer room, telephone room, or data center.  The contractor is certainly proficient in creating efficient use of space and they have, no doubt, delivered their fair share of these closets.  Let’s keep it simple, efficient, and low cost, right?

• How much space do we need in square feet?
• What type of power do we need to run to this space?
• Do we need an air conditioner in there?

As far as small businesses are concerned, those are some of the key questions that we can expect the contractor to respond to effectively.  Add the services of an outside IT contractor like ANALYSYS if you don’t have an IT department, and the job gets done.

An alternative is to retain the services of a company that specializes in building out data centers.  This is a niche within the technology business.  Here’s a story by Processor Magainze that talks about this concept of using a specialist.  In summary, what can you expect for the additional investment? 

• Confidence that your data center environment will conform to modern security, electrical, and environmental best practices.
• An environment that’s right-sized for you now, but is also scalable to what you might need in the future.
• Assistance in making your data redundant before the move, and completion of the actual transition to the new site within the timeframes necessary to minimize impact.
• A seasoned advocate before the many third parties involved with such an engagement.

What’s the problem with all this, you say?  Well, regardless of how you define the project, there’s downtime, risk involved with moving the technology, and with all these contractors and outside support personnel, it’s just downright expensive.  Who cares, it has to be done anyway, right?  Not necessarily.

Before you dig in, double check whether a buildout is necessary at all.  This is one of the first tests that should come up during the initial planning phases of your move.  You may want to consider hosting your systems in a data center facility.  Commonly called “colocation”, this concept is not a new one, however, recent innovations have made the hosted data center option affordable, much more relevant, and accessible to small businesses.

What Is A Hosted Data Center & What Goes In One?

A hosted data center is a facility designed to house computer systems for many businesses. The company that owns the data center makes money by renting physical space for computer systems, and sometimes charges for certain extras such as the amount of power or bandwidth (internet usage) consumed.

In the past, small businesses frequently used hosted data centers only for the things that were meant to be on the internet. This included systems like electronic mail servers, eCommerce sites and other web servers, and web based applications. This concept commonly known as “rack space”, worked well primarily because of the high cost of reliable internet connectivity.

That’s still true today, but the 2008/2009 economic downturn has brought new innovation to this area of the high technology industry. Server “virtualization”, the concept of running many ‘virtual’ servers on one physical server computer, substantially reduces the amount of actual space required. This reduction in space requirement is one of the biggest enablers of entirely colocated networks, and the term that has emerged to describe this practice of networking over the internet? Cloud computing.

Is Data Center Colocation Right For Me?

Using a third party data center to host your systems substantially reduces the investment you need to make into your own data center build out, or even eliminates it all together. Because you are moving your systems into a failicity that was designed from the ground up to be a professional service provider for other companies information systems, you can expect that you are moving into an environment that is highly reliable where downtime, security breaches, and other violations of industry accepted standards are unacceptable and potentially compromise accreditation.  Finally, the colocation model, practically speaking, is infinitely scalable. You have enough space, bandwidth out to the internet, battery backup power, generators, and environmental conditioning to expand to essentially whatever level of growth you need. In summary…

1. Lower up front investment
2. Highly reliable environment
3. Access to better infrastructure
4. Predictable physical security

Keep in mind however, that you are giving up complete physical control of your systems to a company that will ask for a term commitment. If you are uncomfortable with, or simply cannot have someone else manage certain elements of your network security on your behalf, the concept of a hosted data center is probably not right for you. Another major consideration is how the physical separation from these systems will impact the operation. Amongst other things this means that you need to establish an acceptable level of reliable, redundant connectivity between your premises and the data center. Also, bear in mind that as you scale your presence in the hosted data center upward or downward, you can expect a corresponding increase or decrease in monthly recurring costs. Finally, and arguably most important, you must evaluate the present and expected future financial health of the hosted data center you are partnering with, but ultimately understand that data center facilities, albeit rarely, sometimes go out of business. So let’s consider the drawbacks…

1. Monthly recurring costs
2. Physical separation from systems
3. Dependence upon a third party
4. Term commitment

Setting The Right Expectations Through Service Level Agreements (SLAs)

A small business that is looking to a move to the hosted data center as a way to save money will most likely end up with their systems in only one data center, whereas larger businesses may have redundant systems, also known as “hot sites”. If you are the former, take time to understand this single point of failure.  One good test is to evaluate the Service Level Agreement (SLA) the data center operator offers as part of their standard terms and conditions.  An SLA is the maximum amount of downtime the data center operator promises not to exceed within a certain amount of time. Data center providers normally offer a Service Level Agreement with at least “five-nines” of reliability. This means 99.999% uptime, or no more than about five minute and fifteen seconds of down time per year. If the downtime exceeds this amount, the service provider credits service fees back based upon a certain formula. Some SLAs offer a credit back one hour for each hour down. Expect more. You want something like one day’s credit for every hour down. This seems like a modest change, but the difference is substantial.

	What you pay for your service each month	Your SLA	Approximate Credit For A One Day Outage
	$1,000	One hour for each hour down	$32.88
	$1,000	One day for each hour down	$789.04

This may not approach the costs that your business will have sustained because of the outage, yet, consider this as one visible way the data center operator demonstrates their commitment to the customer. If all customers at the data center receive the same credit for this one day outage, that’s a loss of about 6.5% of the data center’s total annual revenue… that’s an incentive to keep reliability high.

How To Succeed In A Move To Data Center Colocation

Remeber, this story is about doing more with less, so we are going to need to ultimately save money if we are going to succeed. The best way of inventorying your costs is to do so months in advance of your move.

First, what’s the cost of building your own new data center?  Have you been able to elminate or substantially reduce these costs by going to a hosted data center?

What are the present costs of internet access? What would you need when you move your systems into a hosted data center? There is an upside and a downside to internet connectivity. Obviously, the internet access will be required less because the access from the rest of the world to your servers for services like email and websites will be eliminated – that’s going straight to the data center. However, there’s now the cost of connectivity from your office into the data center which should be redundant. Find out what the impact is going to be, positive or negative.

Do you pay for your own power? What is the present level of power consumption, and how much could be saved if the technology in your office was no longer there? Power consumption represents an often surprising cost to the business, and is frequently right behing HVAC and lighting.  ANALYSYS was able to reduce our IT related power costs by 52%, representing an annual savings of $13,000.  Here’s the press release if you would like to learn more. 

How much support does your existing network require? If the systems were no longer located on premises, could certain members on the support team be repurposed, or if you use outside IT help, would you be able to right-size the relationship? Remember, your small business still needs to maintain the systems that go into the data center, but managing complex switches, routers, and firewalls may be a thing of the past.

Can you actually eliminate certain systems entirely? For example, if you own and manage your own email server, consider hosting your email as a service with a third party. This eliminates the requirement to maintain the system yourself, reduces the complexity of the network, and normalizes costs.  Some companies are bringing

Putting It All Together

There are some best practices that, when followed, will yield a highly positive experience. Consider that any ‘improvement’ made is not an improvement if it negatively impacts efficiency of the user base. Now that your company has moved to a hosted data center, does, for example, the technical writer for your company work about half as fast as they used to because of the ten step program involved with opening or saving documents? Because the technology that empowers small business to go to the hosted data center is still somewhat new, the best practices and processes used to set up such an environment are not broadly understood. If your business has an IT department, consider encouraging that the stakeholders call for outside support and guidance at the strategy and design phases of this engagement. If your company customarily outsources its support to an IT consulting firm, ask them to demonstrate their successes with prior clients. Moving to the data center represents systemic change to the way that your business uses its technology, and qualified consultants like ANALYSYS can help this experience yield a reliable solution that costs considerably less.