Presentation on theme: "Build vs. Buy: Internet Datacenter William B. Norton – Equinix Michael Lucking – Epoch Internet."— Presentation transcript:
Build vs. Buy: Internet Datacenter William B. Norton – Equinix email@example.com Michael Lucking – Epoch Internet
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
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…
Great religious debate over ties Velcro vs. Plastic cable ties vs. String
Time to white paper what Ive 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
Internet Datacenter Model Dependence Relationship Increased Value
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
Real Estate for Internet Datacenter Issues Place to put stuff Proximity to Fiber Space Size Utility Power Facilities Yard Increased Value Relationship Scaling of Datacenter Real Estate?
Scaling of the Real Estate Model # Sq. Ft. Premium Real Estate Market (Tokyo, NYC,…) Real Estate Market (everywhere else) $/sq. ft.
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
Commitment to DataCenter 1 yr contract Vs. 10 year lease Time to Market Issue – 6 – 9 months to build
Hidden Charges Meet Me Rooms Required products: –Must buy port on switch or certain volume of BW Cross Connect Fees
Size & Finding Real Estate 100,000 sq ft in downtown DC? 10,000 sq ft in downtown DC Vs. Fiber Miles to Internet Datacenter
Infrastructure Scaling Heating Venting Air Conditioning (HVAC) Security Infrastructure Power Infrastructure Fire Suppression
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?
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
Crossover point where Chilled Water lowest per-rack solution
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 dont expect to buy or sell services at the facility.
Sample Crank of the Model: Internet Datacenter Build vs. Buy Note: Fictitious
References – Dont 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.htmlhttp://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 Centerhttp://www.as.ibm.com/asus/cwp- liushrdsvcs.html 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.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.htmhttp://dialtoneinternet.net/tour/page0.htm
Document Availability All references are in the BvB white paper Send e-mail to firstname.lastname@example.org@equinix.com
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.