IT Focus Area: Data Center
September 16, 2015
How to Navigate the Colocation Data Center Market: What Every CIO Should Know
In the early days of data center colocation, providers mainly leased floor space — using any spot that was available in large, open rooms. This leasing model didn’t make the best use of a data center’s real estate, not to mention its power or cooling. The plan simply filled empty floor space.
Colocation data centers eventually standardized their floor space with cages. They used structured infrastructure where tenants shared power and cooling. This allowed for much better use of the data center’s floor space and building systems infrastructure.
During the past 15 to 20 years, the IT equipment within data centers has completely transformed. But until very recently, many colocation facilities were still designed to meet the space, power and cooling standards of the past. Most colocation data centers still use the same 125 watts per square foot, or 4kW per cabinet, that they used more than 10 years ago. However, it’s now possible for a single IT device to consume all 4kW of a cabinet’s allocated power, even though it consumes less than one foot of vertical rack space in a typical seven-foot-tall cabinet.
As IT equipment shrinks in size and grows in density, power has begun to trump floor space. The amount of IT equipment you can house within a single cabinet is primarily dependent on the cabinet’s power and cooling capacity.
For example, by increasing an IT cabinet’s power and associated cooling density from 4kW to 10kW (a 250 percent increase), you can use more vertical rack space. This could significantly reduce your need for IT cabinets and infrastructure.
If you need 250kW of IT power capacity and your colocation data center has a density of 4kW per cabinet, you’ll need 63 cabinets at full load. With the average cabinet and its infrastructure (power whips, power strips, patch panel, etc.) costing more than $10,000, 63 cabinets will cost you $630,000. At 10kW per cabinet, you’ll only need 25 cabinets. This will cost $250,000 — giving you a savings of $380,000.
The Two Types of Colocation Data Centers
There are two main types of colocation data centers: retail and wholesale.
The wholesale model was originally designed for enterprises that required more than 10,000 square feet. It offers:
Leased data center space that you may customize (depending upon your provider) to meet your business and IT specifications.
Facilities that provide you with some dedicated and some shared building systems infrastructure.
The retail model was originally designed for companies that had IT requirements of 100- to 1,000-square-feet. It offers:
Space sold in 100-square-feet increments.
Leases for small amounts of space (typically a cage). These cages are located within large, open data centers and share building systems infrastructure with other tenants.
The Pros and Cons of Wholesale Colocation Data Centers
Until very recently, wholesale colocation data centers made sense only for companies that needed at least 10,000 square feet of data center space and 1MW of critical power. But many wholesale providers will now accommodate as little as 5,000 square feet and 500kW of critical power.
Organizations that opt for wholesale data centers are in it for the long haul. Contract terms typically run between seven and 12+ years, with many providers requiring a minimum 10-year commitment to get the best value. You can often bargain on pricing, terms and extensions, as you’re committing to a lengthy contract and have more negotiating power.
Today’s wholesale providers typically allow some customization of the building systems infrastructure, such as floor plan layout, physical security, power density and cooling. Although you can customize your space, you may share some critical building components with other tenants. For example, the upstream cooling infrastructure in a chilled-water system is typically shared over the whole building. These shared building systems may introduce added risk that you find unacceptable in today’s security-conscious world. They can also add to your costs, as shared systems lead to fuzzy math when it comes to allocating proportionate expenses.
The physical security of a wholesale data center is typically better than that of a retail data center — mostly because your room or pod will be demised and fully enclosed with drywall. No one walking through the facility can see your IT equipment as they can in a caged environment. They also can’t gain access to your room or pod by crawling under the floor or scaling fences. This occurs more than you would think.
The power densities offered by wholesale colocation providers tend to be a bit higher than those offered by retail data centers. Wholesale providers deliver 150 to 200 watts per square foot of floor space, making it possible for you to deploy more IT equipment without increasing your real estate. However, many wholesale colocation providers still standardize on 125W per square foot or 4kW per cabinet/footprint. This may force you to oversubscribe on floor space to obtain the right amount of power.
The Pros and Cons of Retail Colocation Data Centers
The three-legged stool that most often divides retail from wholesale colocation is:
Quantity of floor space — retail is usually less than 2,500 square feet.
Quantity of power — retail is usually under 500kW.
Length of lease terms — retail likes three-year terms.
If your organization doesn’t require a lot of floor space, has manageable power requirements, or likes shorter commitments, retail colocation may be a good fit. However, there are some downsides.
Unlike wholesale, retail usually has 100 percent shared building systems infrastructure — almost nothing is provided exclusively to you. If physical security, reliability, redundancy, and disaster avoidance are top of mind in your organization, sharing major building components with potentially dozens of other tenants may not sit well with you. The more you share your infrastructure, the greater your risk.
Just like wholesale providers, most retail providers only offer 4kW of critical power per cabinet. In this low-density model, you may need to lease additional floor space if you have dense power requirements. To increase your density, your provider will likely move power from unoccupied floor space under your lease to occupied floor space under your lease. The stealing from Peter to pay Paul methodology of upping density only works if your retail colocation provider can cool the higher density cabinets within their low-density design model. This can be tricky.
Retail colocation and cages are synonymous with one another. Cages range in size from less than 100 square feet to several thousand square feet. They are usually increased in 100-square-feet increments.
Retail colocation providers use cages for many reasons, including:
Less interference with lighting and fire detection/suppression.
The ability to cool large volumes of space with shared infrastructure cooling.
Cages have some downsides, including:
Less security (visual, under-floor and overhead).
Inefficient cooling as each cage occupant may orient their IT equipment differently. This can eliminate the ability to separate cool air from warm air and increase your cooling costs.
Many organizations like the shorter lease terms offered by retail colocation providers. Shorter leases give you the ability to get out quickly if your business requirements change or you are unhappy with the provider’s service.
The downside to a typical three-year retail colocation lease is that you may take more than six months to migrate into a data center, and if you’re considering getting out, you should factor in a 12-month exit process. This leaves approximately 18 months of data center operational stability.
Consider your costs and risks. If you’re unhappy and decide to leave, your exit costs will be more expensive than your entrance costs. If you stay, your colocation provider may bump your rates higher than if you’d taken a longer lease with lower and better-defined increases. Moving into and out of a data center also places risk on your IT department and your organization as a whole.
The Best of Both Worlds and Then Some
The most important thing to consider when looking for a colocation data center is whether the facility will help your company stay ahead of the trends. Consider how you want to situate your organization today, as well as how you want to prepare for the future. While current IT architecture may be fine with 4kW per cabinet footprint, the trend is moving higher. High-density applications such as cloud are quickly increasing cabinet footprint densities.
Managed services and managed hosting are also on the rise. In most organizations, IT is not a core competence. Organizations are looking to colocation for more than just floor space, power, cooling, and network connectivity. They also want the additional services that providers offer.
A new Retail+ model is emerging. Retail+ bridges the wholesale and retail gap by:
Providing private, secure suites with the flexibility of increased power and cooling densities.
Offering fully dedicated, semi-dedicated and shared building systems infrastructure.
Providing carrier-neutral networks.
Most importantly, the Retail+ model offers in-house services that you may want from your data center provider. Most retail and wholesale colocation providers offer little, if any, operational support. Retail+ offers services such as remote hands, smart hands, network assistance, migration services, managed services, and hosting.
These services, along with the infrastructure advantages listed above, differentiate Retail+ from plain colocation. You may want to consider this model when choosing your data center colocation provider.
To help you prepare for this important decision, get your copy of The Essential Guide to the Data Center Facility of the Future.