Build vs. Buy: Internet Datacenter
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  • 1. Build vs. Buy: Internet Datacenter William B. Norton – Equinix [email_address] Michael Lucking – Epoch Internet
  • 2. Goals
    • Create a community white paper on issues associated with the building & scaling of Internet Datacenters
    • Identify the issues that folks should consider when making the build vs. buy decision
    • Tonight:
    • Demonstrate the document & models to date and get feedback
  • 3. Non-Goals (Out-of-Order)
    • Not to advocate building you own rack space
    • Not to advocate buying rack space
    • (Rather – document the scaling of each and the criteria involved in the decision)
    • (Warning: Tradeoffs are Religious Topics for many.)
    Background…
  • 4. Toured a lot of data centers
  • 5. Some with very Secure Fiber Access… Source: Technology Center of the Americas Tour
  • 6. Some with less so Source: Don’t Ask.
  • 7. Some Very Secure… http://www.thebunker.net
  • 8. Some Cat 5 Hurricane proof…
  • 9. Some not quite cat proof. Loading Dock
  • 10. Great religious debate over ties Velcro vs. Plastic cable ties vs. String
  • 11. Time to white paper what I’ve seen & Facilitate BOF Discussion
    • Datacenter BOF I NANOG Oct ’98 Atlanta
    • Build vs. Buy White Paper
    • Internet Datacenter Model
      • Definition of Internet Datacenter
    • Focused discussion of Each Component of the Model
  • 12. Internet Datacenter Model Data Center Operations Core Infrastructure Real Estate Network Transport Business Models Internet Service Models Content & Support Dependence Relationship Increased Value
  • 13. Internet Datacenter Model Example Data Center Operations Core Infrastructure Real Estate Transport Mkt: UA WCom Level3 AtlMedia... Transit Mkt: C&W Nacamar TeleGlobe AT&T... Value Dependence CP/e*/ASP/Support: BMA IBM Schwab Yahoo! Akamai Site Smith
  • 14. Ultimate Goal
    • Build Financial models that allow an ISP to say:
    • “ Given these parameters and our required footprint, it makes sense to build our own.”
    • Or
    • “ Given these parameters, it probably makes sense to outsource this to someone who can realize these economies of scale.”
    + + = Buy Build
  • 15. Real Estate for Internet Datacenter Issues
    • Place to put stuff
    • Proximity to Fiber
    • Space Size
    • Utility Power
    • Facilities Yard
    Data Center Operations Core Infrastructure Real Estate Increased Value Relationship Scaling of Datacenter Real Estate?
  • 16. Scaling of the Real Estate Model # Sq. Ft. Premium Real Estate Market (Tokyo, NYC,…) Real Estate Market (everywhere else) $/sq. ft.
  • 17. Real Estate Size is Important
    • Choose Too Small: Run out of space, lose economies of scale
    • Choose Too Big: Cost per Rack very high
    • Vs.
    • Right of First Refusal (some Internet Datacenters allow this)
    • Expandability of Space
  • 18. Commitment to DataCenter
    • 1 yr contract
    • Vs.
    • 10 year lease
    Time to Market Issue – 6 – 9 months to build
  • 19. Hidden Charges
    • Meet Me Rooms
    • Required products:
      • Must buy port on switch or certain volume of BW
    • Cross Connect Fees
  • 20. Size & Finding Real Estate
    • 100,000 sq ft in downtown DC?
    • 10,000 sq ft in downtown DC
    • Vs.
    • Fiber Miles to Internet Datacenter
  • 21. Infrastructure Scaling
    • Heating Venting Air Conditioning (HVAC)
    • Security Infrastructure
    • Power Infrastructure
    • Fire Suppression
    Data Center Operations Core Infrastructure Real Estate
  • 22. Heating, Venting, Air Conditioning Infrastructure
    • Controlled Humidity ~45%
    • Too much Humidity: System Failure
    • Too Little Humidity: Static Electricity
    • Air Temperature:~72 (IBM: 65-85)
    • Solutions:
    • DX Systems
    • Air Cooled
    • Water-Based
    • How do these Scale?
  • 23. HVAC Scaling Direct Expansion Air Cooled Chilled Water System HVAC Cost # Racks $1,000/ton $478/ton $250/ton HVAC System Cost: Economies of Scale DX Systems: 25-300 tons of Cooling ~ 10K sq ft or ~150-200 racks
  • 24. Crossover point where Chilled Water lowest per-rack solution
  • 25. Security Infrastructure
    • 24x7 Manned
    • Access: Biometrics, card keys
    • Video Surveillance
    Sliding Glass
  • 26. Power Infrastructure
    • Monitoring of UPS, DC Power, PDUs,
    • N+1 Redundancy
    • Power Draw?
      • 20K=500Kw
      • (Jason Colangelo, APC)
  • 27. Fuel Cells for Generators
  • 28. Fire Suppression Infrastructure
    • VESPA air sampling
    • Dry pipe, pre action water system vs. FM-200
  • 29. Infrastructure Operations
    • Operations of HVAC, Security, Power systems
    • N+1 Redundancy
    Data Center Operations Core Infrastructure Real Estate
  • 30. Transport
    • Dark Fiber Provider(s), Carrier(s), etc.
  • 31. Internet Service
    • ISP(s), Aggregator(s)
  • 32. Content Providers
    • Content Distributor(s), Hoster(s), Manager(s)
  • 33. Sample Crank of the Model: Assumptions
    • Both: $400/sq foot build out costs for conditioned space
    • Buy: Equinix retail price $1,500/rack used for comparison,
    • Buy: No discount for buying more or larger cages
    • Build: Building Real Estate comes in 10,000 sq foot increments
    • Both: Conditioned space includes infrastructure (power, HVAC, Security systems, etc.)
    • Both: Does not include network bandwidth, hosting equipment, managed services, etc.
    • Build: Financing of build costs is available,
    • Build: Adequate building is available, and build time (time to market) is not an issue
    • Build: Sufficient network capacity (transport and transit) is available and not an issue
    • Both: Facility population is not an issue – ignoring collocation benefits and don’t expect to buy or sell services at the facility.
  • 34. Sample Crank of the Model: Internet Datacenter Build vs. Buy Note: Fictitious
  • 35. References – Don’t Squint…
    • Ripin & Sayles, Insider Strategies for Outsourcing Information Systems , 1999 Oxford University Press
    • Greaver, Strategic Outsourcing: A structured Approach to Outsourcing Decisions and Initiatives , 1999 AMACOM
    • Frenza, J.P. , Buying Web Services , 1999 Wiley Computer Publishing, particularly Chapter 1: An Outsourcing Overview by Frenza and Chapter 5:Infrastructure and Site Hosting by Chris Bryant.
    • Norton, Donelan, Adelson, Newton, Data Center Needs Birds of a Feather meeting at NANOG 14 – Atlanta, Georgia – November 9, 1998 7:30-9PM, http://www. nanog .org/ mtg -9811/data. bof .html
    • Schroepfer, Andrew M., Communication Service Providers, Equity Research, U.S. Bancorp Piper Jaffray Equity Research, December 1999, particularly Ch 12: Facilities Hosting Providers.
    • “ What every CEO needs to know about Electronic Business”, Business Week, e.biz, Marsh 22, 1999
    • IBM White Paper: Building a shared services data center, http://www.as. ibm .com/ asus / cwp - liushrdsvcs .html , focuses on shared services enterprise Data Center
    • Murray, Steve, “Web hosting Strategies: Market Review and Forecast, 1998-2003”, IDC Report #20953, December 1999.
    • Search for “Data Center Construction” on http://www. google .com .
    • http://www.as. ibm .com/ asus / nordstrom .html
    • http://www. gruber .com/ compfac / datal . htm
    • http://www. edgemail .com/ whitepapers /
    • Dialtone Internet: http:// dialtoneinternet .net/tour/page0. htm
  • 36. References – cont’d
    • Yahoo! Directory of Colocation Providers: http://dir.yahoo.com/Business_and_Economy/Companies/Internet_Services/Web_Services/Network_Service_Providers/Hosting/ Colocation /
    • Yahoo! Directory of web hosting providers: http://dir.yahoo.com/Business_and_Economy/Companies/Internet_Services/Web_Services/Network_Service_Providers/Hosting/Web_Site_Hosting/ WhitePages / wp _0.html
    • Search for Internet Data Center on google.com:
    • AT&T Internet Data Centers: http://www. ipservices . att .com/ datatour / idc _dedicated.html
    • Web hosting directory site: http://www. webhostdir .com/
    • Exodus Internet Data Center descriptions and virtual tour: http://www.exodus.com/ idcs /
    • .Equinix Internet Business Exchange (IBX) virtual tour http://www. equinix .com
    • PSINet Colocation Product: http://www. psinet .com. hk /hosting/co_location.html
    • Flashhost data centers http://www. flashhost .com/data_center.html
    • Hosting Internet Data Center in Zaire: http://www.is.co. za /solution/hosting/IDC2.html
    • Level3 colocation facilities: http://www.level3.com/us/services/ colocation
    • Frontier Global Center (now global crossing) http://206.132.184.106/solutions/ datacenters . shtml
    • Exodus Communications  Q1 2000 Quarterly Earnings Announcement  4/20/2000 2:00 PM Pacific Time: http:// webevents .broadcast.com/ financecalls /event/index.asp? EarningsID =766& src = StreetFusion
    • Houses are designed by Geniuses & built by Gorillas , by Bob Johnson, ISBN: 1-886110-48-4
    • Facilities Operations & Engineering Reference , The Certified Plant Engineer Reference, R.S. Means Company, Inc., ISBN: 0-87629-462-X
    • Network Equipment-Building System (NEBS) Requirements: Physical Protection , Bellcore GR-63-CORE, Issue 1, October 1995. A module of LSSGR, FR-64; TSGR, FR-440; and NEBSFR, FR-2063
    • Central-Station Alarm Services, UL 827 Standard for Safety , Underwriters Laboratories, Inc. ISBN 0-7629-0067-9 , Sixth Edition ©1997
    •  
  • 37. Document Availability
    • All references are in the BvB white paper
    • Send e-mail to [email_address]
  • 38. Thanks to
    • Sean Donelan (Equinix)
    • Jason Colangelo (APC)
    • Stephen Stuart/Phil Steffora (MFN)
    • All Colo/ISPs tour facilitators
    • Jay Adelson (Equinix)
    • Josh Horn (NOTA)
    • Justin Newton (NetZero)
    • Friends at Exodus, Frontier Global Center, Level3, etc.
    • Daniel Golding (NetRail)
    • Everyone here! Please e-mail feedback.