Data Center site selection, if you’ve ever moved your data center into a co-lo or built your own facility, you’ve probably gone through a check list of things to help determine the appropriate location. Some of the more common selection criteria involve the following;
- Power – Lots of it at a reasonable price
- Water – Same as above
- Geography & Weather – Good land that’s relatively safe from natural disasters, is low cost and maybe has some local government incentives
- Latency – Is it close enough to your customer base to satisfy performance requirements?
- Taxation – Besides tax incentives on the land, are there local labor or hardware tax incentives?
- Staff – Are there folks local to the facility that you can hire at acceptable salary levels with appropriate skill sets?
- Geographic Diversity – Disaster protection
- Network – Does the site have easy access to several network providers?
There are other considerations, of course, but generally speaking the ones listed above are top of mind when going through the selection process. Now for the wrinkle.
Network Access – The Wrinkle
I’ve gone through the site selection process many times now and generally speaking have applied a level of review and risk/reward to each of the items listed above. What’s
interesting about that review process is that the deepest most of us go on the network portion is as follows;
- Can we get network
- Is there more than one provider
- Can it be delivered to the building in a redundant manner
While the above questions are all valid and necessary, it’s important to note that the cost of providing the network to the facility over time is rarely compared to the cost of power, land, people or taxes. In fact, many of us focus primarily on the following cost criteria as our drivers for selection;
- Cost of land
- Cost of power (cents per kWh)
- Tax on hardware (hardware is generally the biggest on-going CapEx)
- Cost to build
- Cost & availability of labor
Unfortunately, instead of focusing so much on the cost of power, we should have been equally concerned about the cost of the network. You should also be worried about the lack of leverage you have when there are only one or two vendor options. The following is some short-hand math to illustrate where your costs are relative to power and networking.
Data Center Example
A 2 MW facility, with three 10 Gb point to point network connects (500 miles)
Power cost assumptions and math:
- Cost per kWh = 4 cents (.04)
- 1 mWh = 4,000 cents
- Average usage = 1.5 mWh per hour, or 36 mWh per day
- Math (not my strong suit) 36X40X365 = $525,000 (36 mWhs X $40 per mWh X 365 days a year)
Network Model & Cost assumptions:
- Cost per link 6,500 per month X3
- Math 3X6500X12 = $234,000 (3 links X $6.5K per mo. ea. X 12 mo.)
Right about now you’re
thinking, “wait a minute, the power is more than the network” and you’d be
correct. So what’s the punch line?
When you move into the average co-location facility or private data center you might believe that you can only influence the cost of network for those connections that link your data center to the rest of your company. What if you could negotiate most or all of your North American links down by 33 – 66%, just by selecting the right data center/co-lo provider? In most large businesses or enterprises the global spend on network outstrips data center power costs by a factor of five or more. So, if you’re spending $1 million a year on power, but your spending $5 million a year on network (WAN) charges, you can quickly see that a 33% reduction is big savings.
There is more to data center selection
The future of data centers, especially in the co-location and hosting markets will be heavily influenced by the associated technology eco-system. While there are a number of factors that you can’t ignore when making a decision on where to place your IT gear, the eco-system should be right at the top of your list of priorities. It’s especially important to ensure you have more than one or two providers, your ability to negotiate rates are dependent on it.
Switch takes a combination of service independence and the technology eco-system very seriously. With roughly twenty national network carriers and industry leading cloud providers all under the same roof, the customer is provided with selection, security, availability and performance that is impossible to match anywhere else.