The Criticality of Standards & Compliance in Colocation – by Dan Vazquez

Colocation providers are not made equal when it comes to standards and compliance.  Some simply don’t look at standards and compliance as being vital to the success of their business.  The problem with that line of thinking is that standards and compliance are becoming increasingly more important to organizations seeking colocation services.  Today’s customers are a lot more sophisticated then even customers from 5 or 10 years ago.  Having third parties audit colocation providers helps customers feel assured that certain actions have been put in place.  For the most part; customers do not accept a colocation facility stating we are concurrently maintainable or that they meet certain physical security standards.  They want the proof.  The issue is most colocation buyers don’t have the budget for a PE, ME or EE to check the resiliency of the facility.  Also, just because a colocation company meets a standard today doesn’t mean they will meet it in the future when the standard is updated or changed.  Customers want assurance that their data and systems are safe and secure in a resilient facility.

The Different Standards

There are a number of standards and it is not cost effective for a colocation company to go after them all.  What standards are important to a colocation company?  Standards can be broken down into three basic groups.  Sustainability standards such as LEEDs or Energy Star help a potential customer to understand that a colocation company is looking to be a good corporate citizen and trying to reduce overall cost or impact to the environment.  Facility redundancy standards, such as Uptime, TIA 942, BICSI 002 for example, help a potential customer understand how resilient the facility is.   Industry, governance or internal required standards; such as, SSAE16, PCI-DSS, HIPPA, ISO 27001, FISMA/FEDRAMP, DR/Business Continuity and others are related to business requirements. Understanding what standards are important to a potential customer base could be as simple as understanding the industry or market that you are interested in.  In the colocation business a common saying is many people can say no to a deal but only one can say yes.  Not having certain standards in place can impact a colocation provider’s ability to compete for additional business or qualify on RFPs.

Not just pieces of paper – they can really help

Standards can also help the actual operations of the colocation facility.  Industry, governance, or internal required standards require self-assessments.  A colocation company has to understand what is important to their business, identify the risks to the business and put life cycle management in place.  They need to train their staff, set up review boards, have an incident process, and complete post-mortems.  An educated colocation staff is better equipped to catch and resolve problems prior to them becoming critical issues.  Meeting redundancy standards means the staff has a certain design and maintenance equipment available.  Staff can perform necessary changes to the environment and be comfortable about the outcome.  They will have certain equipment available that allows them to perform specific checks or tests and have the proper monitoring and notification in place.  A colocation company that has a number of customers or plans on having a number of customers without compliance in place will have their staff performing countless policy reviews, process reviews, and site walk-throughs with external auditors.  If a colocation company has customers that are managed service or cloud computing providers there could be countless more audits and reviews.  Many larger colocation buyers have external vendor audit requirements in place which require additional audits and reviews.  Without standards and compliance a colocation company can have staff performing audits and reviews versus maintaining or improving the facility.

Simply a must have to be successful

Standards and compliance is ‘Not a check box.’  Standards and compliance helps a colocation company be better equipped to support their customer base.  It tells potential customers that you understand their industry and that their business is important to you.  It tells potential customers that the environment and efficiency is important.  But, more importantly, it helps to protect both the colocation company and its customers.  By having staff properly trained they are better equipped to maintain the facility.  The policies and processes will be more thorough and there will be regular reviews.  As the data center industry continues to mature having a mature and disciplined process will be a must have to succeed.

About the Author:

After retiring from the United States Air Force, Dan Vazquez has spent the past 15 years in the data center colocation industry with Texas based colocation specialist CyrusOne.  Dan was one the original executives at CyrusOne and held a number of executive positions including three years as the Head of Audit & Compliance.  Dan is currently an independent data center industry consultant and provides guidance to the Kiamesha Global team and its customers on various aspects of the data center industry. 

 

Data Center Wars – Dallas / Fort Worth Part Two

In this installment of the series, we delve into the roots of the DFW data center market and what the well-established players are doing today. We want to thank David Liggitt and the datacenterHawk team (www.datacenterhawk.com) for their significant contributions to this article and series.

The Dallas Infomart – 1950 North Stemmons Freeway

Built in 1985, the Infomart was designed to be one of downtown Dallas’ largest tech centers. This lineage enabled the distinctive seven story, 1.5 million SF facility to become a fiber connectivity nexus for over 70 carriers by the 2000s. Attracted by the high-performance connections and proximity to Dallas’ urban center, colocation providers leveraged the Infomart’s dense connectivity to serve their customers. Well-known data center and Cloud service firms such as Equinix, Cologix, zColo, Softlayer and Viawest currently operate significant data center footprints within the Infomart. Each of these providers offer a variety of colocation, managed service, cloud and interconnection services.

In 2014, the Infomart was officially renamed Infomart Data Centers due to a merger of Fortune Data Centers and Infomart Dallas. Since then, the new company has been upgrading various technological aspects of the building, with 3 MW of turnkey colocation space to be available June 2015.  With these investments, Infomart Data Centers will continue to be a relevant, thriving ecosystem within the data center market for years to come.

2323 Bryan and Beyond – Digital Realty

Less than two miles away, Digital Realty’s 2323 Bryan data center in downtown Dallas shares a similar history. Digital used their well-developed wholesale data center model to convert the 477,000 SF office building to host data centers for smaller companies. Leveraging ample fiber providers and opportunities to grow, Digital Realty has attracted notable names such as CyrusOne, Telx, Equinix, and zColo. Like the Infomart, 2323 Bryan is now one of the most connected buildings in North Texas.

In addition to 2323 Bryan, the San Francisco-headquartered Digital Realty made significant investments in the DFW market, especially in the northern suburbs of Richardson, Lewisville and Carrollton. The colocation provider acquired the former Collins Radio Campus in Q4 2009, a 68-acre site in Richardson they later named Data Center Park Dallas. The site included an on-site, private substation that Digital Realty uses to lower power costs for tenants at the park. The company is currently building a new 138,000 SF Richardson facility at 907 Security Row. Several Fortune 500 users and colocation/cloud providers such as Data Bank, Rackspace, SoftLayer, and Verizon Terremark currently call the park home.  The investment in Lewisville was also quite significant with a 2012 price tag of $123 million for The Convergence Business Park, a 168-acre multi-building campus totaling 819,000 SF of real estate. The campus tenants included robust private enterprise and a major data center operator which we will discuss later in this article.

Legacy Telecom Facilities

Several large telecom companies found sites in DFW they could develop themselves. For example, AT&T built their AT&T Internet Data Center in 2001 at the Millennium High-Technology Office Park in the northern suburb of Allen. Like their rival, Verizon has also constructed data center facilities in DFW and acquired more market share via its 2011 purchase of managed service and hosting providing Terremark Worldwide.

The standalone legacy facilities of big telecommunications firms still operate here, but with less relevance. This is due to so many carrier-neutral data centers and colocation facility options throughout the DFW market.

CyrusOne

CyrusOne’s entrance into DFW was a presence in 2323 Bryan as a safe-distance/secondary footprint offering for its mostly Houston-based customers. CyrusOne’s real splash in DFW came in 2009 when it entered into a sizeable lease at Lewisville’s Convergence Business Park (now owned, as previously noted, by Digital Realty).

Selling enterprise colocation services at Convergence contributed to CyrusOne’s post-2010 growth. This led to its purchase of 1649 W Frankford, a 650,000 SF former warehouse for Home Goods. While this massive facility also includes their corporate headquarters, 1649 W Frankford will have 400,000 SF for technical space at full build out. CyrusOne has already developed and leased multiple data halls as it continues to move further into large retail and wholesale colocation. From its modest roots as a privately-funded data center upstart and Digital Realty tenant, CyrusOne has grown into a Real Estate Investment Trust (REIT), established public company (CONE), and a dominant player in the DFW market.

More to Come

In the next addition we will be focusing on new players and service models that have been entering the DFW marketplace.  Stay tuned…