The rise of the local datacentre

The relationship with your datacentre provider is more important than facility size or Tier ranking, say local users

There has been significant investment in local datacentres lately.

IBM has opened a brand new $80 million datacentre south of Auckland this year and Fujitsu New Zealand has had $80 million in funding for two new datacentres approved by Fujitsu Australia. Meanwhile Hewlett-Packard has scrapped plans to build a $60 million datacentre at Tuakau, in the Counties-Manukau region, but the company announced last month it plans to replace the Tuakau development with a refreshment of an existing Auckland datacentre, plus a review of locations for an additional site.

IBM invested in the new datacentre in East Tamaki after seeing a growing local demand, says Paul Douglas, business manager of integrated technology services at IBM New Zealand. Datacentre stock in New Zealand is ageing, as it is designed to old specifications, he says.

“Computing technology today is getting so dense and so hungry for power and cooling that you really do need a hugely scalable, hugely modular datacentre in which you can accommodate those dense requirements.”

Many local companies are recognising that running IT in-house isn’t core to their business, he says. They are increasingly getting other companies, like IBM, to provide datacentre services rather than trying to do it themselves.

Through its new datacentre, IBM offers services ranging from basic hosting to monitoring and maintenance of equipment. Monitoring services include looking after servers, storage and networking devices; security; databases; operating systems; middleware and applications. But Douglas says the offerings attracting the most interest are IBM’s local cloud-based services, called ‘virtual server services’ and located at the new datacentre.

The attraction for customers is getting part of an industrial-grade solution for a “small business price”, he says.

Open for international business

While the primary focus of the IBM datacentre is the New Zealand market, the facility is also open to international customers.

“Australia is our obvious start point,” says Douglas. “We’ve got a number of proposals with Australia-based clients, through IBM Australia, for services based out of East Tamaki.”

There is opportunity to consolidate some services currently run across Australia and New Zealand into one of the countries, and while a year ago the natural assumption would have been to consolidate into Australia, that mindset is now changing, according to Douglas. New Zealand has emerged as a compelling alternative, he says. The advantages include lower labour costs here compared to Australia; a brand new datacentre; and more modern technology, as some services have been built later here than in Australia.

Increasingly, clients are using a mix of datacentre services – they are happy to send some applications off to cheaper US providers, while they want to keep some applications in a local high-resiliency datacentre.

“One organisation could have everything from ‘super-secret’ data to ‘I really don’t care about it’,” Douglas says.

Renaissance signs with Maxnet

Distribution, services, training and retail company Renaissance has recently signed up with datacentre provider Maxnet, as Renaissance aims to run on a lean budget and rationalise across its whole organisation. Part of that plan is to outsource as much as possible, says Doug Casement, CIO of YooBee and Renaissance Group, who runs a small in-house IT team of five staff.

Last year Renaissance started using some development servers at Maxnet, simply because there wasn’t enough capacity within its own server room. The company also had some of its gear hosted with TelstraClear in its Albany datacentre, but that was quickly running out of capacity too. Renaissance is building an “engaged platform” for retail customers – a “stakeholder relationship management product” that allows customers to upload their creative projects and share them with other people in the community if they wish, says Casement.

“The idea is to build this online community, and all of it sits in the cloud.”

The company also wanted a single wide area network (WAN) across the country that would integrate back into the datacentres, wherever they were, as well as easily managed wireless zones for customers inside the retail stores.

Casement and his team looked at a number of options from, for example, IBM, Gen-i and TelstraClear, before selecting Maxnet.

While there are high-end solutions available, there are not enough local companies offering business-grade, managed, virtualised environments in the middle space, Casement says.

“We wanted a combination of co-location and a virtualised environment,” he says. “We were looking at outsourcing a network and all of our infrastructure. Maxnet was the best mix we found.”

The virtualised environment is using VMware, he says.

As part of the deal, Maxnet will replace and manage Renaissance’s entire WAN, including getting fibre to all its YooBee design school (formerly Natcoll) campuses and retail stores. Staff will automatically be recognised and able to instantly jump on the wireless network in the stores, while customers will be able to use free, but restricted wi-fi, says Casement.

The partnership with Maxnet means “tremendous” savings on capex, he says.

“It’s keeping our staff costs down – we do not have to hire people just to mind the farm, so to speak. The joy for us is that Maxnet is looking after all of our data, which allows us to sit down and look at what to do next.”

Since the YooBee design school in Christchurch has moved to Maxnet’s datacentre, communication costs for all the campuses in Auckland, Wellington and Christchurch, have reduced by about 75 percent, while performance has improved by a factor of ten, he says.

After the February earthquake, Renaissance relocated some of its core infrastructure into Maxnet’s datacentre in Christchurch.

“We had to do that because of the earthquake but it fits in beautifully with what we are doing with the rest of the WAN,” he says.

The move resulted in a redundant backup. The “operational stuff” sitting in the South Island is backed up in Auckland, and the gear in the Auckland datacentre can also be recovered to the Christchurch datacentre if needed, he says.

As part of the provider selection process, Renaissance also talked to Microsoft about its Azure offering, but with the nearest servers in Singapore and Hong Kong, the overseas communications charges are “not worth it at the moment”, says Casement.

Having a local provider was important to Renaissance, he says. However, the company is expanding into Australia and has opened a small office in New York. Maxnet has international pipes as well and based on some of its existing clients overseas, latency figures look “really good”, Casement says.

“So, we are not going to have to rush off to Amazon or Rackspace – having said that, we use Rackspace overseas for some projects, where it makes sense.”

For the core datacentre and WAN, one of the key factors was that Maxnet took the time to understand the business and “what we were trying to do”, Casement says – “taking into consideration what we wanted to outsource, what we wanted to keep in-house and also to stay within our budget.”

At the end of the day, it’s not the one-off price that is important when choosing a provider, it’s the ongoing partnership with that provider, he says.

“It’s a bit like going on a date – you’ve got to be compatible with the company, its staff and culture.”

Size could also be a consideration.

“To be blunt, we are a reasonably large fish in Maxnet’s pond so they are going to look after us.”

The size of the datacentre wasn’t as important – “it’s not how big it is, it’s how you use it”. Renaissance also had the Tier system in mind, but it wasn’t a deciding factor, says Casement.

“It certainly pays to shop around, but you can’t go blindly on the Tier system,” he says.

“If you are completely paranoid, and that’s not a bad thing to be when you are putting stuff in a datacentre, you need to look at the entire support chain, right down to the quality of the fuel that goes into the backup generators.”

Geekzone keeps it local

Technology community website Geekzone is using Datacom as its co-location and network provider. For a long time, Geekzone was co-located with ICONZ, says Mauricio Freitas, Geekzone’s founder and administrator.

“It actually started as a shared server with a small shared hosting provider called SiliconBlue, which was later bought by ICONZ and moved to Auckland,” he says. “At some point the volume, both in traffic and database transactions, made it a requirement for us to move from this shared server environment to our own servers.”

Having a local datacentre provider is vital to Geekzone.

“Our analytics tell us that 55 percent of our traffic is from New Zealand and about 70 percent of this local traffic comes from Auckland,” says Freitas. “Having servers in Wellington would add unnecessary hops to the majority of our readers, and having servers overseas would add to the international latency. Also, having local servers allows our local readers to reach the site even if their ISP’s international links are down or overloaded.”

The size of the datacentre wasn’t a consideration for Freitas when selecting a provider. Good service and connectivity was more important.

“We looked at Intergen in Wellington, which is not the largest but has a nice infrastructure,” he says. “But because of the Auckland numbers we decided to keep the services there.”

Freitas believes in being closer to customers, mainly because of speed.

“Also having a provider with good services infrastructure for the occasional support you will need; having security [and] network consultants [available] at any time is a valuable resource.”

Having a good relationship with your provider is also an imperative, says Freitas. You need to be able to trust that provider will have the solution to your problems, as well as ideas to help your business.

Outsourcing saves money for Origin IT

IT services provider Origin IT has been hosting customer services out of Orcon’s datacentre on Auckland’s North shore for the last four months. The company uses Orcon’s facility, including air-conditioning, redundant power and generators, while it puts its own cloud equipment in the racks, says Laurence Taylor, Origin IT’s professional services technical manager.

Previously, the company ran its own datacentre. Rising costs were among the top reasons to move to Orcon, he says.

“It’s very expensive to maintain a datacentre and have all the staff with the correct training. It’s a large undertaking that is not core to our business. Our business is providing IT services, it’s not setting up generators, power systems and big air-conditioning units,” Taylor says.

Origin IT looked at a few datacentre providers in the mid-market space but chose Orcon because “they had what we wanted, ready to go, and were well-priced”, he says. It was also a good cultural fit, he adds.

Origin IT delivers services to the mid-market and Orcon’s datacentre met the company’s requirements concerning redundancy, resiliency and SLAs. For that reason, the datacentre Tier system wasn’t a major consideration for the company. Taylor says most SMBs in New Zealand aren’t prepared to pay for that level of service. They want redundancy and uptime but they are not prepared to go to the extremes, he says.

Origin IT chose to go for a local provider mainly because of connectivity. The company needs to be able to offer good, fast connections to customers, he says. An offshore provider would not have been able to provide the same performance. It would also have been more expensive and Origin IT would have lost some control over the services, says Taylor.

When selecting a datacentre provider, “don’t go overboard”, he says. He recommends looking at the history of the datacentre.

“If they haven’t had an outage in four or five years, it’s probably going to be a hundred times better than if you had your own little datacentre in your building.”

“You can have the best, most expensive datacentre in the world, but it only takes one human mistake to take down a whole environment,” he adds. “It’s only a piece of the puzzle; it’s not the whole picture.”

Datacentre migration talks

When IBM opened the doors to its $80 million datacentre in May this year, Greg Farmer, then IBM GM for global technology services, was confident demand for it could exceed current capacity in the next 18 months. However, IBM doesn’t “talk about it in that way” anymore, says IBM’s Douglas.

“I think there is a strong possibility we would absolutely be doing that,” he says. But the company is not planning to build the next module just yet, he says.

Farmer has since moved to an Asia-Pacific role within IBM.

There is a lot of “excitement” around the new datacentre, judging from the potential clients IBM takes for tours around the facility, says Douglas. While he can’t reveal how many customers are currently using the facilities, there is “absolutely a lot of interest” in it, he says. “What I can say is that my team can’t keep up with the RFPs,” he says.

“I get the feeling that the marketplace says, ‘you have got a building now, you have better fill it’, but we don’t have that view.”

IBM’s vision takes more of a long-term view, he says, and the “big conversation” right now is talking to future customers about datacentre migrations.

“A huge amount of our efforts now are going into migration [discussions],” he says.

Customers come in all sizes, says Douglas. The datacentre team is working with large clients with huge IT infrastructures, but also medium-sized and small customers.

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