By: Martin Banks, Associate Analyst - Datacentre & Mainframe, Bloor Research
Published: 3rd August 2009
Copyright Bloor Research © 2009
The development of wholesale datacentres, led in no small part by German company, e-Shelter, is opening up a real potential to be the platform on which a hierarchy of businesses develop that will greatly increase the granularity of services available to users as components of Information Exostructures. Based in Frankfurt it has actually been in the market for some 10 years, where it has built up a number of European datacentre facilities. The largest of these is the Frankfurt campus, with three main buildings offering some 50,000 square metres of lettable datacentre space. A new UK facility, offering 37,000 square metres of lettable space, is now under construction in Saunderton, just outside High Wycombe.
The key to the wholesale datacentre business model is another occurrence of the Buy-versus-Build equation: in this case with a total concentration on the provision of the utility services—floor area, energy provision, airconditioning, site security and the rest—rather than the systems that occupy the space. This is at the heart of what is needed to provide high availability and high reliability datacentre services, and can succeed on the basis of providing not only the capex investment but also the specialist management and technical skills needed to run it. The question for potential customers then becomes straight forward: does buying access to such facilities provide acceptable (or better) levels of service availability, reliability and security at a better price than building datacentres from the ground up.
The majority of current e-Shelter customers are major corporates and financial institutions, where results of the buy:build equation can be finely balanced. For smaller businesses, however, the 'Buy' option is the only game in town, and the wholesale model opens up the opportunity for service providers to be building increasingly granular levels of service intermediation, so that even the smallest business can start to utilise Cloud-based services and build Information Exostructures. So a large wholesaler like e-Shelter will find itself not only providing facilities management for global corporate businesses but also companies acting as service distributors' running large hosted services. Their market will not only be end user businesses but also the companies offering a wide and growing range of general and more specialised managed services. These will range from those providing both IT capacity and its full management through to small service providers that target a specific market sector. It will also include a growing range of SaaS-delivery service providers.
On top of that will ride the service aggregators, which will probably become the dominant Service Brands of the future.
The drivers pushing growth in the datacentre market are as one would expect—economics, regulatory controls, and technology developments. The economic arguments include the build:buy equation as well as reduced capital and operational costs. Increasing pressure on businesses to meet ever more stringent governance and compliance demands are pushing businesses to prove they meet regulations, while the technical arguments largely revolve around the cloud, at least in its widest context. This is particularly the case with corporate users, where scaling up to meet growth requirements is an issue. There is also a need to keep in step with the new big datacentres that the likes of Google are building. The result is a traffic growth rate equal 40% Compound Average Growth Rate in exabytes/month, and little tail-off in the growth rate is expected: surveys have shown that 69% of large corporates say they will need datacentre expansion within two years and many of them are now looking to source that availability outside of the internal infrastructure.
The new Saunderton facility will be comparable to the company's main Frankfurt campus, consisting of four buildings offering a cumulative 37,000 square metres of lettable space divided into individual suites. Power will be brought into the new site from two different points on the National Grid, Cowley and Amersham. The supply requirements will start at 20MVA, but will rise during 2011 to 100MVA. The company considered various green options for energy supplies but planning restrictions precluded them. Solar energy cannot be used because that much glass is not allowed in a greenbelt. It could follow the bio-fuel route because of the truck movements of feedstock (10,000 truck movements per year needed for 10MW output) and there are objections to wind turbines, particularly the number required. It will be seeking green suppliers, however, and will be paying a percentage of the energy costs to local government to help fund local efficiency projects. There will be 37,000 square metres of letting space available and the buildings will be as harmonious with the environment as possible. For example, they will feature grassed roofs and the sides will be wooden to look like barns. Security will be up to MOD List X standards.
The first building will be ready for occupancy by the end of 2010 and it is expected that it will require 5–6 months set up time from contract to operational production environments for new customers. The typical lease duration on a datacentre suite will be 10 years.
The costs involved are significant, but demonstrate the company's attention to detail. The rule of thumb on building a datacentre with 10,000 square metres of useable space, with dual 1.25kVA power supplies, user choice on back-up power supply (for example static or diesel), user choice on air-conditioning services, and multiple options on communication network suppliers is approximately £100 million.
As a guide, the company's first major datacentre campus, in Frankfurt, cost approximately €250 million, and the facilities there are, it has to be said, very impressive. Security, for example, is strictly applied to whatever level customers require. This is physical security of the campus and the suites rather than digital security, which is the responsibility of the customers. This includes the provision of armed personnel who accompany visitors to ensure their behaviour. It is a sobering thought, when viewing parts of the campus infrastructure not normally accessible to customers or visitors, that the guard is probably there to shoot you if necessary.
Every service in the e-Shelter campus is provided on the basis of N+1 sourcing. For example, in the Frankfurt campus there are not only two primary electricity feeds from different parts of the Euro Grid but also three huge transformers for the dual feeds into the datacentre suites. There are three different forms of air-conditioning services provided and two different forms of back-up power supply, including a large room of UPS batteries and a three container-based standby diesel generator sets. A choice of 15 different network services provide connectivity. It also has the highest level of certification against lightning strike it is possible to attain.
The main market for wholesale datacentre services is currently the large enterprise user looking for expansion space or where they can locate a high availability/high reliability service at sensible cost. Some use the facilities for service expansion and additions while others use it as a data replication site. Being on the outskirts of Frankfurt—a major financial centre—it is close enough to provide the synchronous data replication services needed for business continuity requirements, as well as asynchronous replication services. The new facility at Saunderton will be near enough to London to provide similar services.
The company estimates that some 30% of Saunderton's capacity could well be taken by Cloud-based service providers rather than large corporates, but by continuing to pitch the facilities offerings at the high demands of the latter group, it is also providing a platform on which large service providers can build offerings not only for mid-sized end users but also other, smaller service providers, giving access to facilities and management services they could not contemplate on their own. This opens the way for far greater service granularity—down to the one-man-band service provider—and a new intermediation of service provision.
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