The Rapid Journey of Colocation and Cloud Re-location

By April 2018Uncategorized

The Rapid Journey of Colocation and Cloud Re-location

The Rapid Journey of Colocation and Cloud Re-location

The transformation to colocations and cloud has been touted as being dramatic, somewhat controversial and an earth-changing direction! Sure, there is a lot to consider going down the colocation/cloud path. But, getting away from the numerous new buzzwords created being associated with this, just what are the real touch-points, the real underlying issues that accompany such a move that are oblivious to the end users.

Back in 2009 at a Data Centre conference in Hong Kong, I provided the closing address as conference Chairperson and noted to the audience ‘watch this space’ for the following emerging trends; Solid State Storage devices (SSD) and Cloud Computing.

At that time, the cost in Singapore was around 18-23 cents per kWh compared to Australia’s around 8 cents per kWh. Due to privatisation of our energy generation and supply in Australia, that cost is now up to 28 – 30 cents per kWh, plus annual rises, for instance in 2018 which ranges from 10-12%. Yet today in Singapore it has remained very much the same at around 21-22 cents. So, with rises of over 400% in Australia over the space of 9 years, we can see why technology must advance to address these issues and for strategising the way data centres are built and used these days. Hence, the move to colocation and cloud services.

The late 90’s and early 00’s saw the advancement in network bandwidth, making it possible to provide reliable and fast network speed to account for the rapid exponential grow of the size of data. Particularly with the rapid and expanding uptake of smart device technology, social media and the ‘need’ for much higher resolution images across the private and commercial sectors.

From 2012, the colocation/cloud sector has taken off in all directions adding a number of new challenges such as competition within the operators themselves, the public cloud and some providers business strategy that solely focus on winning the business of wholesale space as compared to retail space buyers.

What are the reasons for heading down the colocation/cloud path?

Whether public, commercial or private, colocation facilities are built for a purpose. These facilities provide heightened power, cooling, generators, network topology, redundancy, back-up process, access and security systems to a Tier 3 or Tier 4 standard. They will have robust management, operational and legal standards in place with guaranteed and agreed Service Level Agreements.

An organisation’s compute environment can grow considerably, thus quickly becoming quite complex and problematic to manage. Have someone else manage your physical compute requirement and those that can take advantage of a cloud’s SaaS (software as a service) offering will reduce the complexities and problems when leaving to another’s management. This leaves the organisation with the ability to focus on their core business.

The first and most crucial touch-point of a colocation/cloud environment – Network connectivity and bandwidth.

Network topology and design have become far more secure, providing a ‘peace of mind’ and confidence to the end user with dynamic bandwith and consistency. It has become much more agile and with smart scalable layout design, additions and removals as growth inside the data centre changes, occurs without disruption to the business. It must be able to meet your current and future needs.

The second touchpoint, and people may disagree with me here, but as someone who has designed and built data centres and been responsible for the management of a number of data centre facilities over many years, scalability and flexibility of the data centre infrastructure is paramount. Is the data centre going to be able to meet your physical needs in 5 years time? Ten years time?

To either host your compute environment or to host your applications and data, the physical infrastructure needs to have components of scalability, flexibility or modularity.

Do you combine with others to build your own colocation? Or do you find a commercial provider? It is critical, like in most things, to perform a thorough due diligence.

From 2005 to the end of 2008, I was brought in and employed by the University of Melbourne to sort out their data centre needs. Cutting a long story short, I designed a Type 1/Tier 3 facility that was constructed. In 2007/2008, we embarked on the prospects of further expanding down the colocation path with other universities. As such, I was one of the principals of the Victorian Universities collaborative data centre steering committee. The three Universities involved were the University of Melbourne, Monash University and RMIT (The Royal Melbourne Institute of Technology).

The purpose was to: –

  1. Rationalise and combine into a single facility
  2. Reduce the carbon footprint through further improved DC design and the shared use of the most up-to-date energy efficient technology
  3. The ability to cut escalating energy useage and costs, thus indirectly providing a greener environment was able to be achieved
  4. Construction cost would be greatly reduced by millions of dollars
  5. The overhead of managing and maintaining several other facilities would also be greatly reduced
  6. Reduction in staffing

Reduction of staffing is one of those controversial areas with the colocation or cloud relocation option. It is a simple fact that staff requirements from three different organisations would not be required to manage one facility since a single management group would be created. The savings in salaries alone would potentially exceed $1 million dollars annually. My initial basic considerations was for a data centre to be flexible, scalable and modular, thus enabling it to expand without rebuilds or adds on. Therefore, the data centre could grow to the needs of all stakeholders without disruption.

Some basic agreed high-level goals were established:-

  1. To save money for all parties
  2. Improve service levels by improving the data centre infrastructure
  3. To learn from each other
  4. To establish a mutually beneficial partnership, perhaps leading to further joint projects and more savings

Venturing down the private, self-managed colocation path required extensive consultation, planning, and negotiation. Some of the key areas addressed on top of infrastructure, network and power as previously mentioned, are as citied below.

Different considerations are required compared to engaging with a commercial provider:-

  1. Respect for differing stakeholder business processes
  2. Internal and combined Service Level Agreements
  3. Security and access control
  4. Geographical location
  5. Dispute resolution
  6. Operational management and escalation procedures
  7. Agreement severance
  8. Cost charging regime
  9. Change management both individual and combined
  10. Governance structure

It is important to note the governance structure is different when engaging with a commercial provider.

Late September 2009 saw the availability of the first stage of the data centre for network establishment, testing and commissioning. From January 2010, relocation of systems to the facility commenced.

This colocation/cloud arrangement is internally managed and not outsourced to a third party provider, giving internal control and management via a legally binding collaborative agreement between the three universities. There are a number of benefits to this approach, such as removing a number of unknowns from a commercial option.

Craig Brew, Managing Director of IPP Consulting noted the ‘uncertainty’ by a commercial provider might be, for instance, sold to a foreign entity, system redundancy reduced to save cost, market share is dropping and there are no plans to develop the product to meet new standards, the company is about to go into liquidation which meant you may lose your service – and potentially your data as well.

Apart from power, some other considerations are; commercial provider financials, SDLC planning, infrastructure redundancy, infrastructure lifecycle status, network communication redundancy, reliance upon third-party software, hardware and services themselves, ownership structure, market share, and viability, guaranteed Service Level Agreements.

The first important consideration to make before embarking on any project like this is to ask yourself, why? Perform a business analysis and cost analysis comparison and then undertake a comprehensive due diligence process. After that, ask yourself again, is this going to be of a strategic and financial benefit?


Keen to know more about what the Global IT Infrastructure professionals are concerned with? Join 500 senior executives and hear from experts like Spencer Denyer at the World’s first ever event for Data Center, Cloud and Connectivity buyers – the Global Selection Convention 2018, organised by W.Media.

See how hyperscalers, banks, government, ecommerce, etc. make their decisions differently. As well as key datacenter and cloud providers showcasing their global footprint and expertise at our unique thought leadership sessions.

If you wish to visit any of the data centers in Asia, feel free to reach out to our event concierge team to plan an itinerary for you. Email or call +65 3159 3210 for more information.


Spencer Denyer

Chief Editor, W.Media

Power Partners

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