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Data Center Sourcing Process For Cost Savings
Companies operating outsourced data center sites may save up to 50% by renegotiating contracts or switching providers, especially if they haven't updated in the last 18 months. Factors influencing costs include geography, provider capacity, and technology requirements. Engaging in a formal RFQ process can further enhance savings, and various 'free' services can assist with this process.
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Data Center Sourcing Process For Cost Savings
- 1. DATA CENTER COLOCATIONSAVINGS OPPORTUNITY If you are operating an outsourced Data Center site and have not renegotiated your contract in the last 18 Months you have an opportunity to save up to 50% Proposed Presentation Notes: Silicon Valley IT CIO Forum Spring 2013 Santa Clara Marriott Bill Kohnen
- 2. Data Center SourcingStrategies • Geography Drives Center Cost • Big variations prices from companies perceived as high end and others with little real difference • Capacity of a given provider in a location • Do you need physical presence near data center? • Technology at a specific site • Required configuration • Who and where? • Savings 10% • Reduction of floor space and optimized power savings of 30% • Potential Savings of 50% • Potential savings of 30% or more Provider Location Support Strategy Hardware and Configuration Best Total Cost Solution Considers Conclusion: Many companies cut outsource data center cost in half
- 3. Region Cost perrack Washington DC 2700 Bangalore New York San Francisco Santa Clara 1400 Seattle New Jersey Oakland Chicago Phoenix 950 Virginia Dallas 800 Jacksonville 550 Cost Per rack by region Best Total Value Locations
- 4. Range of PricesBetween Providers illustration $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Washington Seattle High Average Lowest 16 % 16% 53 % 28%
- 5. Make your currentprovider answer immediately • Options to reduce and improve your cost and performance • Does current provider have limitations that prevent optimization? • Ability to Compete with lower cost regions • Competitiveness relative to other providers. • Past, Present, Fu ture Provider Location Support Strategy Hardware and Configuration Best Total Cost Solution Considers
- 6. You should reviewyour Outsourced Data Center Costs Data Center Cost often makes up largest portion of IT operations budget. Data Center space has become a commodity. If you have not changed providers recently big opportunity to save up to 50%. If you chose to switch it is common industry practice for your new provider to give you additional incentive to move. Even if you stay with your current provider going through a formal RFQ process will allow you to negotiate a reduction. There are “free” services that offer to manage the rfq process for you. They get paid a commission by the data center companies. The planning and cost to do a formal RFQ and make visits to potential new places are worth the effort and commissions will go to you as further savings.