<A study of the Feasibility and Potential Profitability of Small Data
Centers.
Contents.
Introduction.
What is a data center?
Operation of a data center.
History of the data center.
The operation of a data center.
Down time problems.
Market size.
Trends.
Location.
Building costs.
Revenues.
Profitability.
The advantages of small data centers.
Case study – EasyStreet.
Companies.
Conclusion.
Further links.
Introduction.
This report looks at the feasibility and profitability of small data
centres in contrast to large data centres. Despite poor profitability
and the huge capital investment needed to build a large data center,
many companies have opted for this business model. The report
discusses the reasons for the failure of large data centers and
details why small data centers have the potential for greater profit
and survivability.
What is a data center?
A data center is a place that houses computers, servers, switches,
routers and data storage equipment which is connected to its customers
via the internet. Racks of electronic equipment are wired together and
connected to fiber-optic cable networks. The equipment is densely
packed to optimise the use of space. A typical data center tends to be
a large windowless building with a raised floor under which all the
cabling is housed. The computer room contains a large number of
servers connected to the internet which are used to host computer data
off-site for business and individuals.
The services that a data center supplies can be divided into three
areas – collocation, web hosting and managed hosting. With collocation
the data center supplies space on its servers and power. With web
hosting, the customers web site is hosted on the data center’s
servers. Managed hosting covers a range of services including ASP
services and anti-virus updates.
Data centers vary in size from small operations that are owned by a
single company up to huge facilities encompassing hundreds of
thousands of square feet. Building regulations stipulate that there
must be three foot aisles between the racks of equipment. This results
in only 20-33% of the floor space being utilised. Around 20% of the
space houses air-conditioning equipment.
The history of data centers.
Data centers originated with the growth of the internet. In response
to predicted growth of one hundred percent per year, companies built
23.5 million square feet of data center space in the United States.
These data centers were built on a huge scale. The average size was
113,000 square foot. At the end of 2000 as the dot com boom crashed so
too did the data center market.
According to tier 1 research, the U.S. has 453 data centres,
encompassing 23.5 million square feet. However only 35 percent of this
space is utilised. Worldwide there are 823 data centres encompassing
42.4 million square feet with just 31 percent utilised.
http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A11476-2002May13¬Found=true
The problem with these large data centers was huge amounts of capital
were needed to build them. However there were more data services built
than were needed resulting in little demand for their services. Huge
amounts of equipment were under utilised. This meant that they were
inefficient. In addition many companies concentrated on providing just
colocation services which is the least profitable use of data center
space. With a low occupancy rate the companies could not generate
enough money to finance their debts caused by the huge construction
costs. This resulted in the closure of many data centers,
consolidation and the bankruptcy of many companies.
However not all companies had opted for operating large data centers.
The companies that survived the crash tended to run smaller data
centres. Companies like EasyStreet which started out with small data
centers and focused on customer service. It now operates a 5000 square
foot data center (see case study).
The operation of a data center.
Operating the equipment in a data center requires large quantities of
electricity. They are required to operate 24 hours a day, 7 days a
week with as little down-time as possible. This means they need a
reliable source of electricity with as few interruptions as possible.
As the servers generate a lot of heat, keeping them cool requires an
efficient air conditioning system. The air conditioning system also
needs to work 24 hours a day, 7 days a week. Failure to properly cool
the electronics results in over-heating which leads to systems
failure. Downtime can be particularly costly. For example a brokerage
firm would typically lose $6.5 million per hour.
http://asia.internet.com/asia-news/article/0,3916,161_1460951,00.html.
Therefore back up power generators are needed to keep systems running
when the electricity supply fails.
Power quality from electric utility suppliers is not adequate for
electronic loads. Small changes in the current or voltage can corrupt
data or crash computers. Voltage fluctuations, surges, spikes and sags
are commonplace. Instead of reliance on a local utility supplier, A
combined heat and power system (CHP) is recommended. It has lower
capital cost and lower annual operating cost, both on the order of 20
percent. http://216.239.51.104/search?q=cache:-jKKiMQinBYC:www.cool-companies.org/images/DataCenterJune.pdf+%22chp+system%22+%22data+centers%22&hl=en&ie=UTF-8
The amount of electricity required to run a data center is between
40-50 watts per square foot.
http://www.shorecliffcommunications.com/magazine/volume.asp?vol=12&story=147
This amount of energy can be cut with the use of RLX Technologies’ low
power chips and innovative design which cuts energy use by servers by
over 80 %.
Data center owners need their power supply to be available 99.9999% of
the time, or “six 9s.”
A 60,000 square foot data center needs between one and four thousand
tons of cooling capacity,
depending on its power density and design. The data center air
conditioners run all year, day and night.
Down time problems.
According to McGladrey and Pullen data, one of every 500 data centers
has a severe disaster annually. After such failures, 43 percent of
companies close their doors, and 29 percent more close within two
years.
One of the biggest problems is single points of failure, says David
Sjogren, president of 7x24 Exchange and principal with Strategic
Facilities Inc. The single points of failure that bring critical
facilities down come from several sources. These include:
Problems with initial design and construction or modifications after
original design and construction.
Misuse and abuse of systems.
Lack of standard operating procedures or improper maintenance
procedures.
Poor business risk assessment.
As in all data situations, the single point of failure often seems
insignificant — until it happens. Sjogren recommends facilities
executives carefully select architects and mechanical and electrical
engineers that are specialists in 7x24 facilities. But even in a
well-designed data center or carrier hotel, there are no guarantees
that problems won’t occur; the most robust design can be undermined by
human error. “Companies overload the power supply or add new servers
without adjusting for the additional cooling requirements,” says
Sjogren. “They don’t maintain their batteries or mechanical
components, thinking they haven’t had an outage yet, so they don’t
need to do anything.”
http://www.facilitiesnet.com/bom/Jan03/Jan03communicationsa.shtml
Energy problems
http://216.239.51.100/search?q=cache:zuit0Jlvzw4C:enduse.lbl.gov/Info/National_Implications.rev2.pdf+%22smaller+data+centers%22&hl=en&ie=UTF-8
General design considerations are described at
http://www.donelan.com/design/general.html
Data center facilities
http://www.informit.com/isapi/product_id~%7BA5D84B44-6982-4D3E-BE8F-5913102B29D9%7D/element_id~%7BB22358B7-3729-4032-9B81-790B657E37ED%7D/st~%7BBBCFF023-6CD5-4A40-884F-8DB621AF25C4%7D/content/articlex.asp
Market size.
The market for data centers is predicted by a number of analysts to
increase in the future. Forrester Research Inc. project the web
hosting business to grow to $19.8 billion by 2004.
http://www.xchangemag.com/articles/111sec7.html Independent studies
conducted by IDC project the hosting sector to grow to over $24
billion by 2005, from its current projection of $7 billion in 2002.
http://www.datacenterhub.com/news/0722savvis.shtm Probe Research and
IDC predict growth of 33% in the data center market. Probe projects
that the market for managed hosting will experience the most growth.
http://www.proberesearch.com/presscoverage/jun02-amnet-flight.pdf
There are a number of factors that are increasing demand.
Internet traffic is doubling every six months.
Innovations in technology like streaming video is more data intensive.
The risks of a terrorist attack have highlighted the need for remote
security and back-up services.
It is more cost effective to outsource IT services than to operate
them in-house.
The demand for small data center services is likely to come from small
business owners as it is more cost effective for them to outsource
data storage than to build their own data centers.
http://www.bizsites.com/webxtras/yardsale.html
Gartner Inc. predicts that the IT outsourcing market in North America
will grow from $101 billion in 2000 to $160 billion by 2005 as
corporations try to lower IT spending while converting unpredictable
costs into fixed costs.
http://www.computerworld.com/managementtopics/management/story/0,10801,69126,00.html
The serverside.com predicts the end of corporate data rooms as it
becomes cheaper to outsource.
http://www.theserverside.com/resources/article.jsp?l=IT-Less-Corporation
Forrester Research Inc. estimates that about 66 percent of Fortune
1000 companies outsource their Web sites.
http://www.internetwk.com/trends/060898.htm
According to bizland many data center customers are looking for a more
intensive level of service.
http://portland.bizjournals.com/portland/stories/2001/12/10/story3.html
The events of September 11th have heightened businesses awareness of
the need for security and back-up services. After a disaster companies
need to be able to recover data and be up and running again in as
short a time as possible to minimise losses. This demand has prompted
Sentinel Properties to open a new 210,000 data center which will be
aimed at corporate clients seeking disaster recovery space. Sentinel
Properties says the demand for data center space has increased in
recent months. This has been caused by increased security concerns,
federal regulatory efforts in the financial services and healthcare
industries and bargain hunting.
http://www.carrierhotels.com/news/March2003/sentinel.shtml
Global Innovation Partners have recently been buying data centers and
reports that they’re seeing more interest from corporate users than
they’ve ever seen before.
http://www.carrierhotels.com/news/January2003/gipartners.shtml
The Asian market.
International Data Corporation (IDC), predicts that the Asia-Pacific
(excluding Japan) Internet Data Center market will grow at a compound
annual growth rate (CAGR) of 36% from US$713 million in 2000 to reach
US$3.3 billion in 2005. However, IDC also predicts that the
Asia-Pacific (excluding Japan) information technology (IT) outsourcing
marketplace will grow at a CAGR of 24% from US$4.7 billion 2001 to
reach US$14 billion in 2006.
http://www.apconnections.com/perspective/99-40.html
The Japanese market.
Japan’s data center market is predicted to reach $9.17 billion (1.1
trillion Yen) by 2005.
The European market.
European data centers are predicted to experience growth of between 50
and 200% due to adoption of new technology, the expansion of eastern
European markets and consumer demand.
http://216.239.57.100/search?q=cache:8SrO1WpvKkEJ:www.biznesnet.pl/files/meta/EDCS_1032.pdf+%22location+of+data+centers%22&hl=en&ie=UTF-8
Liz McPhillips, a Probe analyst, projects that the European market
will grow at a CAGR of about 28% over the next five years. Many
European countries have large numbers of small businesses which could
be targeted by data centers. However due to the number of different
languages spoken in Europe, data centers tend to be country specific
which can restrict opportunities.
http://www.commweb.com/article/COM20020708S0004
The Brazillian market.
The market for services of data centers in Brazil, for the year of
2002, is US$289 million, with a growth of 30% over figures for 2001.
For the following years, projected growth is approximately 40%, due
mainly to the expansion of the demand generated by the public sector.
The share of the Federal District (Brasilia) in the whole of the
Brazilian market of Information Technology is one of approximately
20%, which positions Brasilia as the second regional market of IT,
only topped by the State of São Paulo. Therefore the potential market
of Brasilia for this category of services is estimated at US$ 57
million in 2002, climbing to over US$ 200 million in 2006.
http://216.239.51.104/search?q=cache:plcr0LYnMswC:www.help-finance.com/download/0374-Eng.doc+%22demand+for+data+center%22&hl=en&ie=UTF-8
Trends.
There is greater demand for managed services. Opus Interactive has
seen a 160% increase in demand for managed services. There has been
increased interest in disaster recovery since September 11. Fortix
rapidly filled a 10,000 square foot data centre.
http://portland.bizjournals.com/portland/stories/2002/10/21/story4.html
Small to midsize enterprises are demanding security as a bigger
priority. International Data Corp. (IDC, Framingham, Mass.) expects
the worldwide market for security services will increase to $17.2
billion in 2004, from $5.5 billion in 1999.
http://www.teledotcom.com/article/TEL20010424S0005
Enterprises want mission-critical data and applications to have high,
and therefore expensive, reliability and availability.
http://www.d1asia.com.my/MarketNews/marketnews.html
Trends -study
http://216.239.51.100/search?q=cache:ZEP4DGsROPEC:www.telecom2002.co.il/presentations/amos_lasker.ppt+%22data+centers%22+trends&hl=en&ie=UTF-8
Location.
There are a number of factors that need to be considered when locating
a data center.
Physical requirements like the distance to fiber-optic hookups, access
to a power source and customer or co-location access are vital.
http://www.bizjournals.com/washington/stories/2000/09/25/story5.html
Risk factors like natural disasters which could cause system failure
need to be minimised. Events like floods, tornadoes, hurricanes,
earthquakes, and lightning need to be taken into account. Other less
frequent natural disasters include events such as volcanic eruptions,
tidal waves, mudslides, forest fires, dust storms or drought. Areas to
avoid in the U.S are the east of the Rocky mountains and the great
lakes area (tornados), the east coast (hurricanes), west of the Rocky
mountains (earthquakes).
City locations are more likely to have more power outages due to over
loading than rural areas. The closer you are to a substation the less
likely you are to have power outages.
http://www.facilitycity.com/advice_example19.asp
Companies need data centers that are located a reasonable distance
from their main facilites to ensure that all their information is not
destroyed in a terrorist attack.
http://www.carrierhotels.com/news/February2003/gaoreport.shtml
Areas like Washington and San Jose are overbuilt with data centers
which seriously impacts on occupancy rates. BCE’s data center in the
Washington area is only 5 % occupied.
http://www.proberesearch.com/presscoverage/jun02-amnet-flight.pdf
Kirk Killian, a senior vice president at Partners National Real Estate
Group - a commercial real-estate broker that specializes in
data-center procurement for financial-services clients - says that
many firms are now seriously considering building data centers based
"well outside of the tri-state area." Investment banks and brokerages
are weighing this option, he says, in an effort to protect the
critical information - such as trade records - they route to data
centers on a daily basis. The goal, says Killian, is for firms to
maintain the integrity of their data centers in the event of a
disaster equal to, or greater than, Sept. 11. "When costs are a
secondary issue and ultimate reliability is the goal, really the best
strategy is to have two active-data centers in the same area, plus a
third data center in a remote area ... . This is a great way to backup
your data center, but also very expensive," he says.
http://www.wallstreetandtech.com/story/mag/WST20020904S0009
Finding a location which is underbuilt with data centers yet has a
high number of small businesses that can be targeted would prove a
more profitable business model.
In the U.S. California has the highest number of small businesses.
Relera has identified Cleveland, Las Vegas, Salt Lake City, San
Antonio, and Sacramento, California as underserved markets.
http://www.internetweek.com/story/INW20010315S0002
Raven Technologies believe that there is demand for data centers in
Baltimore City. http://baltimore.bizjournals.com/baltimore/stories/2002/04/29/story6.html
Calgary has the most small businesses per capita of all major Canadian
cities. http://216.239.51.104/search?q=cache:AzbVL1MmiJsC:www.cfib.ca/legis/alberta/5150.pdf+%22has+the+most+small+businesses%22&hl=en&ie=UTF-8
Companies like Telus have built a data center there but most operators
have targeted Toronto. http://thewhir.com/features/telus0820.cfm The
fastest growing areas for small business are Alberta and Ontario.
Brisbane has the highest number of small businesses per capita of any
of the state capitals.
http://australianit.news.com.au/common/print/0,7208,5600296%5e15316%5e%5enbv%5e15306,00.html
Fermanagh district council area has one of the highest numbers of
small business in Northern Ireland.
http://www.northernireland.gov.uk/press/eti/020724b-eti.htm
Korea has rapidly growing demand for data centers
http://www.datacenterhub.com/news/0722inkra.shtm
Building costs.
The cost of building a data center depends on the level of security
offered. The most secure buildings are the most expensive to build. In
its basic form costs start at approximately $150 per square foot. For
high security facilities the build cost rises to approximately $550
per square foot. The recently built Sentinel for example cost
approximately $320 per square foot.
http://www.carrierhotels.com/properties/sentinel/index.shtml Details
of average costs for building data centers can be found at
http://www.planet-tech.com/documents/HaverhillReport/html/Part%20III.htm
The facilities offered by high security data centers are discussed at
http://216.239.51.100/search?q=cache:zFvnlteMVCgC:lab1.jarvisgroup.net/newimage/brochure.pdf+%22data+center%22+%22construction+costs%22&hl=en&ie=UTF-8
According to Morgan Stanley Dean Witter, the average building cost of
a $300 per square foot data center breaks down as follows:
Power, cooling and electronics 60 %
Computer systems 10 %
Security 10 %
Other 20 %
Operating costs.
Operating costs are typically $250 per square foot. According to
Morgan Stanley Dean Witter these costs are broken down as follows:
Rent 19 %
Utilities & misc. 9 %
Network 70 %
Operations and other 25 %.
http://216.239.51.100/search?q=cache:K8-y7sPsY6MC:www.envirotech.com.hk/eng/project_eng.htm+%22data+center%22+%22500+sq+ft%22&hl=en&ie=UTF-8
Currently data center space costs $800 per square feet including
construction and equipment.
http://www.redherring.com/mag/issue107/579.html
5000 square foot data centre built in Austin at a cost of $4 million.
http://www.utexas.edu/coc/journalism/SOURCE/j331/misc/internet1999/web823.txt
Cost of over $600 per square feet
http://www.designbuildmag.com/Jan01/telecom1231.asp
Detailed costs
http://www.planet-tech.com/documents/HaverhillReport/html/Part%20III.htm
The costs of a variety of data center projects carried out by Rancho
Sante Fe Technology are given at
http://www.rsft.com/success/mainjs.html
For example:
600sq ft data center - $225,000 - $375 per square foot.
2500 sq ft data center - $670,000 - $268 per square foot.
2800 sq ft data center - $360,000 - $128 per square foot.
3000 sq ft data center – $590,000 - $196 per square foot.
3500 sq ft data center - $648,000 - $185 per square foot.
3500 sq ft data center – $1,070,000 (mission critical) $305 per square
foot.
8500 sq ft data $2,144,000 - $252 per square foot.
7000 sq ft data center – $1,268,000 - $181 per square foot
12000 sq ft data center - $1,025,000 - $85
12000 sq ft data center - $1,500,000 - $125
30,000 sq ft data center - $12,500,000 - $416 per square foot.
The costs incurred need to be looked at case by case as each data
center is unique and is built to different specifications. The price
of the 600 square foot data center does seem high in comparison to
other facilities however it did have special design requirements which
pushed up the cost. It was built with no raised floor but with all the
cables run overhead in a grid system. It also was designed as a remote
facility.
The 30,000 sq ft data centre has the highest construction costs but it
includes 2x redundancy (for example, three generators providing one
function), for each system (fire suppression, power distribution, all
transmission media, etc.).
Revenues.
Tier 1 Research data shows that average annual revenue for pure
co-location services is $216 per square foot. Tier 1 estimates that a
data center running at full capacity needs to generate $808 per square
foot in its first year to break even. Managed services can generate up
to $2,500 per square foot.
http://www.redherring.com/mag/issue98/1210019321.html
Profitability.
The greatest level of profitability can be achieved by offering
managed services. Hosting is less profitable than managed services.
Colocation is the least profitable market segment. Aberdeen Group
analyst Dana Tardelli says the margins on managed hosting run in the
30% to 40% range, while hosting margins run between 20% and 40%, and
the margins on colocation are in the single digits.Those low
colocation margins may have been the undoing of some early data center
operators, particularly those that did not also operate their own
networks.http://www.proberesearch.com/presscoverage/jun02-amnet-flight.pdf
Cable & Wireless, a British telco, now boasts a usage rate of 44
percent--in part because it bought some of Exodus's best and most-used
facilities. Other firms, like Digex, Inflow, NaviSite, and Rackspace
Managed Hosting, are either profitable now or are about to turn the
corner to profitability, according to Tier 1.
Using technology that it developed in-house, the data center provider
Rackspace, in San Antonio, has sold 60 percent of its capacity and
became profitable in February 2001. However, the company reached
profitability only after reaching a capacity usage rate of 50 percent,
according to Lew Moorman, chief marketing officer at Rackspace.
Several other startups, like Consonus, Colo Solutions, Webvisions,
DataOne Asia, Agilera, and Telehouse, are close to rates of 45
percent, according to Tier 1.
Data centers are also trying to break even by reducing expenses. Cost
cutting measures include using management software in place of
technical support staff or installing smaller more power efficient
equipment that is easier to manage.
http://www.redherring.com/vc/2002/0423/datacenters.html
Many data centers are 10 % to 20% full or less. Broadwing with three
data centers in Austin, Cincinati and Newark, Delaware only achieved
high occupancy rates of 55%, 85% and 100% respectiavely by
consolidating customers from the closure of eight data centers.
http://www.proberesearch.com/presscoverage/jun02-amnet-flight.pdf
The advantages of small data centers.
The high energy requirements of large data centers mean that when they
are built, account needs to be taken of future electricity demand.
This requires a huge capital investment of substations, transformers,
back-up generators, power lines and systems that can take the future
load. If however occupancy is low, the data center is less
competitive. It may be many years before it can achieve 100 percent
occupancy. Advances in technology may mean that by the time it has
achieved a full rate of occupancy much of its equipment may be
outdated. In addition. if new technology emerges that cuts energy
requirements the data center has effectively wasted money on providing
the infrastructure for high electricity loads.The past has shown that
companies that opted to build large data centres have been crippled by
debt as a result of high building costs and low occupancy rates.
Small data centers represent a more profitable model and can be run
more efficiently than large data centres. They can rapidly achieve 100
percent occupancy in contrast to the rates of around 30 percent for
large data centers. A small data center operating at 100 percent
occupancy can more quickly recoup building costs. Updating a small
data center as technology advances will also be cheaper in contrast to
a large center as there is less equipment to replace. As demand grows
for more space, further centers can be built. The companies that
survived the dot.com crash are those that chose to opt for smaller
data centers. This is the strategy that has helped EasyStreet to
achieve success (see case study).
New technology is emerging on the market which means data centers can
be housed in smaller spaces. Miniaturised racks have been developed
which instead of holding 42 servers they can now hold 336. This
reduces the space needed by a factor of 8. However it does raise the
need for better cooling systems.
It therefore makes sense to build smaller data centres that can be
efficiently run with 100 percent occupancy.
Analysts Gartner recommends building smaller data centers with more
robust functionality and better infrastructure. They report that
companies that have taken this approach have in general fared better
than those who sacrifice quality for quantity.
http://news.com.com/2009-1033-257431.html?legacy=cnet
The speed at which a small data center can attain high occupancy can
be seen by looking at Fortix. It started with a 5000 square foot data
centre that in 2001 was only 30 % occupied at the end of the summer.
By October it had reached 95% occupancy. This was achieved with the
launch of their new back-up service. On September 6 the company sent
out a direct-mail circular which instead of the usual 1 to 2 percent
response received a 10 % response which the company puts down to the
heightened response that security products are now receiving.
http://portland.bizjournals.com/portland/stories/2001/11/05/focus2.html
Case study.
EasyStreet
Address: 9705 SW Sunshine Court No. 400, Beaverton, Oregon 97005.
Telephone:503/646-8400
Website: www.easystreet.com.
Founded in 1995.
Number of employees: 37
EasyStreet Internet operates a 5,000 square foot facility in Portland,
Ore which is 60 percent occupied and profitable. The company has
doubled its data center facilities from a 2500 square foot center. It
has been in profit since 1997. In 2000 they earned $5.4 million in
revenue. http://portland.bizjournals.com/portland/stories/2001/02/12/story3.html
http://portland.bizjournals.com/portland/stories/2001/07/09/newscolumn3.html
In 2001 their revenue was $6.4 million.
http://stacks.msnbc.com/local/vcolptld/m189146.asp?cp1=1 In 2002 their
revenue was down about 5% on the previous year.
http://www.sao.org/newsletter/pdfs/apr03/linda_woody_0403.pdf
The company has a customer base of 3000 local business customers.
http://www.easystreet.com/newsletter/nl4_01.html
EasyStreet’s success has been achieved by starting small and not
expanding too quickly. In contrast to many other businesses at the
time they opted to initially build a small data center. Their data
center was built out in stages. They have concentrated on offering a
high quality service and new services. Expansion has been funded
through their growth. The company targets small businesses. In the
Portland-metro area there are 50,000 businesses. Around 95% are small
to medium-sized. Approximately half of Portland’s businesses have less
than five employees. Many of their customers are small businesses with
less than 10 employees. They have been successful by employing a local
sales force and networking locally via the local Chamber of Commerce
and business events.
http://www.carrierhotels.com/news/March2002/imntier2.shtml
EasyStreet offers a range of hosting and access services.
For DSL, small business services they charge a set up fee of $40.00.
Monthly charges start at $29.95 rising to $79.95. For a Corporate
Connection package they charge a set up fee of $199 and monthly fees
of between $99.00 and $189.00.
Colocation prices start at $150 per month.
http://www.easystreet-pro.com/colo.shtml
They also offer a range of managed services.
http://www.easystreet-pro.com/manage.shtml
EasyStreet’s Pro services costs $3000 to set up and $61,560 in yearly
fees. Their service offers a cost effective solution for companies.
Their site details a comparison of onsite and offsite costs. For a
company using two servers running Microsoft® Internet Information
Services (IIS) and SQL Server, processing 1.544 megabits per second of
traffic, it would cost $10,423 to build their own in house data
service. Running costs would total $98,467. A company using this
service would save $7,423 in building costs and $33907 in yearly
running costs. In addition the EasyStreet service offers greater
reliability. The companies in-house system would have 99.5%
reliability (down time 2 days per year) whereas EasyStreet offers
99.99% reliability (down time 53 minutes per year).
http://www.easystreet-pro.com/build.shtml
Marketing strategies.
One of the successful marketing strategies used by EasyStreet is
hosting "customer appreciation" breakfasts for top customers. Six to
eight customer are invited to breakfast which gives EasyStreet the
opportunity to thank them for their business and to discuss their
customer’s needs. The intention is to expand the level of business
with their exisiting customers and to ensure that they retain their
business through customer satisfaction.
http://portland.bizjournals.com/portland/stories/2003/05/05/newscolumn1.html
The EasyStreet data centre.
http://www.easystreet-pro.com/data.shtml
Profitability.
Based on a revenue of $6.08 million in 2002. EasyStreet is generating
an income of $1216 per square foot of data center space. Assuming
costs of $250 per square foot. This gives an operating profit of $966
per square foot.
Other companies.
Opus
Offers internet access, web hosting, collocation and managed hosting
services.
2337 NW York Street
Portland, OR 97210
Toll Free: 888.300.6787
503.972.6690
Founded 1995
New 1000 square foot data center opened in 2002.
http://www.opusinteractive.net/tour.asp
http://portland.bizjournals.com/portland/stories/2002/05/27/newscolumn3.html
CCC Network Systems Inc.
http://whitepapers.informationweek.com/data/detail?id=990475680_700&type=ORG&x=1102037099
Tec Latino
http://www.teclatino.com/portfolio/
ISP Planet
http://www.isp-planet.com/hosting/2002/smaller.html
Rackspace
http://www.nwfusion.com/news/2003/0421carrrackspaceqa.html
http://www.rackspace.com/index.php
http://news.mysanantonio.com/story.cfm?xla=saen&xlb=110&xlc=959703&xld=110
Digex
http://www.digex.com/
Wireless data centers
http://www.crmdaily.com/perl/story/9852.html#story-start
Construction co.
http://www.bizjournals.com/sanfrancisco/stories/1999/11/01/newscolumn2.html
Conclusion.
Demand for data center services will continue to grow in most parts of
the world in the next few years. The most profitable business model is
a small data center (5000 square foot or less) that offers managed
hosting services to small business customers. Managed hosting commands
the highest prices in the data center market and therefore represents
the most profitable use of data center facilities. One of the crucial
factors affecting profitability is the ability to attain full
occupancy in as short a time as possible. Small data centers are able
to achieve full occupancy at a faster rate than large data centers,
allowing them to operate at maximum efficiency in a shorter time. As
the EasyStreet business model has shown, cultivating good customer
relationships is an important key to success. Networking is the most
effective way of recruiting new customers. Crucial to keeping clients
is avoiding down time which can be extremely costly for customers.
This means which implementing efficient systems with virtually no
chance of failure.>
<Additional links:>
<Data Center Ventures – conference>
<http://events.venturewire.com/>
<"Best Practices In The Data Center", M. Levin, W. Goeckel. (EMI, Vol
18, 2, p. 35)> ‘ What are the world class data centers doing to
operate more efficiently and cost effectively than their peers? This
article presents a description of best practices for many areas of the
data center. It discusses how a data center's size, technical
configuration and workload affects achievement of best practices.
Surprisingly, even some very small data centers have learned how to
operate so efficiently that outsourcing vendors can't touch them.’>
<http://www.disaster-resource.com/articles/99bibli1.shtml>
<Interview with Data Centers Now.>
<http://www.webhostnews.com/exclusives/DCN_Jason_Britton.shtm>
<Data centre trends – interviews with 300 CEO’s.>
<http://216.239.51.100/search?q=cache:5dBflwxUXd0C:www.wehavethewayout.com/UniSys%2520Package%2520Research%2520Report.pdf+%22data+centers%22+trends&hl=en&ie=UTF-8>
<Market analysis>
<http://www.whmag.com/content/0201/financial/print.asp>
<Report – customer expectations.>
<http://216.239.51.100/search?q=cache:gqEbSNfZWIYC:www.intel.co.jp/idf/us/fall2002/presentations/DES199PS.pdf+%22micro+data+centers%22&hl=en&ie=UTF-8>
<Smart cooling>
<http://www.internetnews.com/infra/article.php/2034141>
<Proliferation of small data centers in Japan.>
<http://www.tarifica.com/press/view_release.asp?pressid=7>
<Colo>
<http://www.bizjournals.com/washington/stories/2000/12/18/story6.html>
<Colo building mini data centres.>
<http://siliconvalley.internet.com/news/article.php/565341>
<Peak 10>
<http://www.carrierhotels.com/news/February2002/peak100208.shtml>
<Mini data centres>
<http://www.ayalaport.com/ayl_press.php?oid=38>
<Balance of power.>
<http://216.239.51.100/search?q=cache:SwqtA3CK-QoC:www.hpl.hp.com/techreports/2003/HPL-2003-5.pdf+%22data+centers+%22optimum+size%22&hl=en&ie=UTF-8>
<Equipment.>
<http://www.rackable.com/>
<Search strategy:>
<"1000 sq ft data center">
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%221000+sq+ft+data+center%22>
<"data center" location>
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22data+center%22+location>
<"demand for data center">
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22demand+for+data+center%22>
<"easystreet" million "data center">
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22easystreet%22+million&as_q=%22data+center%22>
<Hope this helps.> |
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