Data Center Decisions: Build Versus Buy

Data Center Decisions “Build versus Buy” Jeff Gilmer Senior Partner 612.978.4493jgilmer@excipio.net 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center Trends2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Trend 1: Data Center Capacities Total Power/Rack - 5 kW per rack - 10 kW per rack Power Consumption - Virtualization - Application consolidation - Cloud Computing - VDI Cooling Requirements - Total load is down - Criticality is up dramatically Square Footage - Virtual servers - Storage densities - 1,200+ servers per rack2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Trend 2: Flexible Data Centers“Due to significant technology changes, flexibilityhas become a primary issue in the last five years.” Cause • Speed of developing new technologies • Acceptance of virtualization • Rapid rate of change in IT (Moore’s Law) • Speed at which business demands change  M&A activity  New product lines  Promises to Wall Street and investors Effect • Modular Systems • External Solutions • “The Cloud” 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center Assessments How do I “Evaluate” my Data Center?2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center Strategy“How do we determine our future Data Center Strategy?”Phase I – Data Center IT Operational – Operating Systems – Applications – Technology – Data Storage – InfrastructurePhase II – Data Center Facilities – Facilities Capacity and Capabilities – Power – Cooling – Fire Suppression – Telecomm – Security 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Phase I – Data Center OperationalOperating SystemsA review operating systems in order to leverage the redundancy and maximize the resourceutilization. Examples include: H/P–UX, UNIX, AIX, Solaris, Windows NT, 2000, AdvancedServer, Datacenter, Linux, Netware, etc.ApplicationsThe review will include current server applications in use, versions and the potential to consolidate differentapplications, partition or utilize alternative technologies.Hardware Technology (Servers)A review of the current server environment including server mix; Blade, Commodity and Enterprise class.It also includes a review of the potential for optimizing the current environment including; physicalconsolidation, virtualization, application stacking and life cycle management along with other options.Data & StorageStorage analysis should include local server drive storage, Data Back-up/Restoration, Data Retention, NASand/or SAN options as well as Disaster Recovery process related to data handling capabilities.Infrastructure ReviewThe LAN/WAN components and connectivity requirements along with switches, routers, firewalls , etc. 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Phase II – Data Center Facilities“Evaluate the Current Data Centers ability to meet the currentand future requirements defined by the Data Center OperationalReview.”The Facilities Assessment includes a review of all Data Center/Computerroom facilities and related equipment including: - Capacity, Environmentals and Physical Components - Maintenance Schedules - External Connectivity - Physical Security, Monitoring, Testing and Documentation - HVAC, Fire Suppression, Wiring, Power, Redundancy - Sensors, Space Requirements, Utility Costs, etc. - Data Center Facilities Staff Knowledge and experience 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Survey QuestionHas your Organization completed or updatedyour Data Center strategy including bothOperational and Facilities in the last threeyears?1) Yes2) No3) In Process 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Consolidation & Impacts to the Data Center2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Consolidation “What does this really mean?” Upfront Technical Outage Support Resource Methodology Explanation Examples Cash Risk Risk Impact Risk Impact Investment Conslidate like Immediate servers on existingCompression File and print Low Low Low Low decrease in hardware or retire workload applications Migrate applications • File and print Shift in from expensive • Utility servers workload,Re-platform Low Low Moderate Low platforms to • Itanium to typically no commodity servers. quad core decrease Consolidation of Moderate • Virtualization Increased servers as due to • Application resource equipment is changes inRolling Migration stacking Moderate Low Low cost due to replaced during OS and • Physical extended regular lifecycle App replacement timeline refresh intervals versions Initial Purchase of new Increased • P2V increase, servers with new resourceMass Refresh • 3-5 year lease High High High followed by technologies and cost during agreements tapering of migrate en masse transition support Migration of key • Web services Reduces or systems to third • B2C systems reallocates party hosting • SAASOutsourcing Low Low Low Low internal facilities to avoid • Systems with support upgrades to the data 24x7 uptime staff center requirements 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Enterprise Server StrategyYear2007 Start Action N/A 19 1 42 2 217 Dedicated 4 85 6 3 8 49 12 3 16 13 1 1 2 2 Virtual Servers 4 11 8 Instances 98 Servers 445 Totals CPUs 1,519 Instances 543 Servers Year 1: Dedicated Refesh NG Proc Demand Move to VM -5 1 -24 -50 13 -80 -13 11 -32 -1 -12 10 -23 -3 4 -3 -1 1 -1 -11 1 5 163 -96 -163 -336 -550 -96 - 445 Physical NG Proc Demand Consolidate NG Proc Demand 4 -1 1 20 -2 1 14 -2 1 1 -2 2 20 -10 9 5 -5 9 -22 -185 -22 - 543 Instances Purchase 72 9 18 99 251 99 End 19 12 157 47 4 5 1 18 261 263 699 5242008 Dedicated Refesh -12 -15 -4 -1 -32 -74 -32 NG Proc Demand 2 4 2 2 Move to VM -26 -18 -4 48 -48 -188 NG Proc Demand 7 8 7 Consolidate NG Proc Demand Purchase 32 6 38 86 38 End 19 148 25 4 1 23 309 220 523 5292009 Dedicated Refesh -9 -9 -18 -9 NG Proc Demand 3 Move to VM -10 10 -10 -20 NG Proc Demand 3 Consolidate NG Proc Demand Purchase 9 1 10 21 10 End 19 138 25 4 1 24 319 211 506 5302010 Dedicated Refesh -5 -1 -2 -1 -9 -32 -9 NG Proc Demand 2 1 2 1 Move to VM NG Proc Demand Consolidate -17 -12 -2 -31 -98 -31 NG Proc Demand 5 6 2 Purchase 10 3 1 14 36 14 End 19 126 15 25 319 185 412 5042011 Dedicated Refesh Servers Year 5: NG Proc Demand Move to VM NG Proc Demand - 185 Physical Consolidate NG Proc Demand Purchase - 504 Instances End 19 126 15 25 319 185 412 504 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Server Architecture Example High Density Example • 16 Blades/Chassis • 3kW/Chassis • ≤10kW/rack • 25 virtual servers/blade • 400 server instances/chassis 400 servers * 3 chassis/rack = 48 physical and 1,200 instancesTraditional 13 physical servers per rack = 74 racks @ 5 kW/rack (370kW) 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Survey Question“To what degree hasconsolidation impacted yourData Center, what percentageof your servers are virtualizedtoday?”1) Over 60%2) 40 to 59%3) Less than 40% 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center Capacity “How do I know when we are going to run out of Data Center capacity?”Data Center Capacity Driverso Physical Space o Rack Space, Ceiling Height, Floor Weighto Power o Main Power Feed, Facilities Draw, Actual Power to Rack, Equipmento Cooling o External, Internal, Ambient Air, In-Row Solutions, Floor Height 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

How Long will my Data Center “Survive”? Number of BTUs per # Tons Min BTUs Max BTUs Units TonBuilding air supply - - 12,000 - -Cooling capacity per Unit 20.0 15 12,000 3,600,000 3,600,000Cooling capacity per Unit 12.0 3 12,000 432,000 432,000Cooling capacity per Unit 5.0 2 12,000 120,000 120,000 Total Cooling Capacity 346 4,152,000 4,152,000 Typical Typical Physical Watts per BTU per Min BTUs Max BTUs Devices Device DeviceCooling demand WAN 118 135 460 (54,297) (90,495) LAN 61 77 262 (15,972) (26,620) Storage & Backup 92 427 1,455 (133,882) (223,137) Telco 42 310 1,057 (44,373) (73,955) Servers & Mainframes 701 433 1,478 (1,035,742) (1,726,237) Estimated Cooling Demand (1,284,266) (2,140,444)Less estimated efficiency loss 30% (1,245,600) (1,245,600)Available Cooling Capacity (BTUs) 1,622,134 765,956 Cooling Adequate (Yes/No/Insufficient Data) Yes Yes Cooling Redundant (Yes/No) Yes Yes Maximum Number of Servers 1,799 1,012 Minimum Cooling Required (Tons) 211 282 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center “Build versus Buy”2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center “Build versus Buy”o Are there advantages in making a long-term commitment to build a Data Center, or would we be better off utilizing a current hosted facility to meet our needs?o What do we get for our investment?o What is the best use of our money?o Do we upgrade, build new, use an external provider or Cloud Computing?o Do we address production, DR and test/development environments differently?o What is a Tier Level and how important is this as opposed to a business requirement (best practices) level? 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Survey QuestionHow do you operate yourData Center environmenttoday?1) Own your Data Centers2) Buy you Data Center services3) Use Cloud Computing 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

“Buying (Sourcing) a New Data Center”The decision to buy Data Center ServicesThe benefits of sourcing DC services include: o Typically the lowest up front cost option o Implementation can occur quickly o The Client can take advantage of already implemented policies o The option provides for technical and business flexibility o It does not require a long-term commitmentThe disadvantages typically are: o Typically higher long term cost o Will require some conversion to providers requirements o May not provide a long-term solution o Control of the facility is by the provider 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center Services Maturity Model“As the Data Center Services mature, the ability to provideservices on an “As Needed” basis to the end user clientmaximizes efficiencies and is typically more cost effective.” Collocation Managed Outsource Cloud Basic Services Advanced Services 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Colocation “Power and Pipe”Vendor Responsibilities o Building Facilities o Security: 24 x 7 security and alarm monitoring o Power: AC and DC power with emergency generators o Cooling: HVAC redundant design with air distribution o Fire Detection: Detection and suppression technologies o Cabinets and racks o Network: WAN bandwidthClient Responsibilities o All assets owned by Client: server, network, and storage hardware o Resources to support all hardware, OS, and applications o Tape backup and rotation responsibilities o Disaster Recovery responsibilities o Monitoring and Service Desk capabilities 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

“Managed Services”Vendor ResponsibilitiesSame as colocation plus the following services: o Implementation and support of hardware and OS o Performance monitoring of all hardware o Tape backup and rotation responsibilities o Updates, patches, log maintenance, troubleshooting, security o DBA support to triage and perform routine maintenance o Managed Networking: user access, firewalls, IDS/IPS, anti-virus o Virtual infrastructure Management: utilization, failover, performance o Standardized support processes: continuous process improvement o Service Desk integration (single service desk at the enterprise level)Client Responsibilities o All assets owned by Client: server, network, and storage hardware o Resources to support applications o Disaster Recovery responsibilities 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Outsource Services “People, Processes, Product”Vendor ResponsibilitiesSame as Managed Colocation plus the following services: o All resources are provided by vendor o Assets are owned and responsibility of the vendor o Processes and methodologies to manage IT operations o Software support for the commodity applications o Application performance metrics and reports o Multi-level Disaster Recovery plan o Service coverage is 365 x 24 x 7 o Help Desk is the vendor’s responsibilityClient Responsibilities o Custom applications, (test, development, support) o Custom DBA work (new enhancements, development) 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center “Cloud Computing”“Services are Sourced via the Internet” Traditional IT Structure Service Sourcing Structure Cloud Computing Applications Software As a Service Operating Systems Platform As a Service Mainframe, Servers Internet Data, Storage, DR Infrastructure As a Service WAN, LAN, Network Data Center Client Facilities 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

“Building a New Data Center”The benefits of owning and building include: o Typically the lowest cost long-term option o If the strategy includes consolidation of other DC’s return on investment can be as soon as four years but less than ten. o The Client owns and controls the facility o The Client can make independent decisions without impact to other vendor provided requirements.The disadvantages typically are: o Significant upfront initial investment o Long-Term process which may require an interim solution o Requires a long-term commitment o May not offer the technical and business flexibility 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

“Build versus Buy Cost Comparison” 10-year Projected Costs New Data Center Collocation Managed Services Outsource$600,000$400,000$200,000 $0 Year 10 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 The cost to build becomes more cost effective around year seven. 2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Questions & Answers Jeff Gilmer Senior Partner 612.978.4493 jgilmer@excipio.net2012 Excipio Consulting, LLC. All Rights Reserved. This document is proprietary and confidential and may not be duplicated, redistributed, or displayed to any other party without the expressed written permission of Excipio .

Data Center Decisions: Build Versus Buy

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