Answering The Co-Location Storage Question.

As technology and next-generation storage and networking protocols drive to unite the global economy, businesses are faced with managing an increasingly complex and costly infrastructure. In parallel, the global Internet economy is pushing business information to the forefront of the battle to differentiate and succeed. Information has become a core enterprise asset.

The combination of these two pressures is driving businesses to rethink the distribution of corporate resources and to seek alternative methods to ensure the scalability of their infrastructure and the availability of their mission-critical information.

Internet Infrastructure Service Providers (IISPs) have developed to meet this demand. IISPs provide guaranteed infrastructure security, availability and scalability, and ensure performance with service level agreements (SLAs). Within storage and data management, this overwhelming demand has led to the birth of the Storage Service Provider, or SSP, a company whose expertise and resources make it uniquely equipped to guarantee the continuous availability of mission-critical information.

Data storage has become a highly complex process that demands the best enterprise-level storage technology and the highest level of technical expertise. SSPs are able to bury these complexities and costs into an integrated service, enabling corporate storage and data management solutions that meet today's extremely dynamic IT requirements. With the right storage service, businesses can quickly scale up their storage infrastructure without having to worry about the latest security protocols or long-term capacity planning. Plugging into such a storage utility allows enterprises to focus on core business competencies and dramatically mitigate the overall costs of maintaining an infrastructure at 99.99% or greater uptime.

In the past seven years, the Internet has become central to the success and longevity of virtually every business. Pacing the growth of the Internet has been the rapid growth of the co-location industry. Co-locating in Internet data centers makes sense for the same principal reason that outsourcing to a storage service provider does: the company providing co-location services can offer a more scalable, reliable, and secure environment at substantial cost savings. By outsourcing, businesses do not have to shift key resources from their core competencies to a peripheral area that is every bit as demanding in terms of skill, experience, and capital investment.

From the end user point of view, the storage decision is not an isolated one, but part of a larger decision that includes the selection of a co-location provider, a network service provider, and (in many cases) a managed service provider. Ultimately this leaves businesses with the problem of trying to select the right best-in-service combination to meet their needs.

There are four distinct levels of service within the co-location industry. At each level, the interface with the customer changes, as does the relationship between the customer and the SSP. The customer-SSP relationship and service complexity migrates from a direct buyer-seller relationship at the basic co-location level to transparent, fully integrated services.

Climbing The Internet Infrastructure-Service Ladder

The four distinct levels of service within the co-location service industry are: basic co-location services, co-location services with bandwidth, managed service providers, and hosted service providers.

From the point of view of end-customers, the SSP relationship changes significantly as they move up the hierarchy. At all levels, however, from the straight co-location center up to the structured, integrated infrastructure service, there is a clear and accelerating trend toward the outsourcing of data storage and management.

Basic Co-location

The basic categories of co-location service are businesses that provide only facility-based products, such as racks, power, and network cross-connects, and no site monitoring or egress bandwidth. Basic co-location companies, including Colo.com and Equinix, focus on offering the business consumer complete network and service provider neutrality. This means that the end business consumer is required to individually contract with every service they need to meet their requirements. The co-location company will often provide a list of the available service providers in their facilities, but they will not recommend, sell, or integrate any of these services.

While basic co-location providers rarely have direct relationships with SSPs, they generally provide references upon customer request. No reseller relationship is involved and end users deal directly with whichever SSP they choose. This gives the business customer complete flexibility in selecting a best-in-service solution but gives them no assistance in integrating that solution.

Co-location Plus Bandwidth

At the next rung of the Internet infrastructure-service ladder are companies like Level3 and UUNet, which bundle co-location space with network bandwidth. These service providers focus on providing combined data center and network access solutions for business customers. Their services will include network and facility monitoring, but will not be bundled with storage or other services. This means that the end business consumer will have to purchase, install, and manage their own server and storage architecture, or select storage service providers.

Businesses that bundle co-location and network bandwidth generally resell SSP services to meet this demand. Thereby, the co-location provider can increase revenue per square foot without dealing with the complexities involved in provisioning a storage service. The customer deals directly with the SSP with which the co-location center has a reseller relationship.

Within this environment, the customer has to use the data center space and bandwidth of the co-location company, but it is free to individually select and use any managed service provider, so long as the service is deployed within the facility. Subsequently, the business customer must negotiate and manage separate SLAs and will be sent monthly invoices for each service they contract for.

Managed Service Provider

At the third level of the Internet infrastructure-service ladder are companies like SiteSmith and Exodus. These businesses provide all Internet infrastructure services that a business needs under a single (combined) service level agreement and with a single monthly invoice. These service providers focus on tailoring a solution that meets the customers needs by integrating best-of-class technologies or service provider partners. Typically, the managed service provider will have its own "brand" of co-location and network services.

Within this environment, the customer is given the option of several packaged solutions and can choose to select other services from an a la carte menu of available service providers. However, at the end of the day, the business customer has to manage only one service organization (SLA, invoice, NOC, etc.) for their entire solution.

While Managed Service Providers want to own the relationship with the customers for all services, they recognize that storage is extremely complex, expensive, and requires specialized storage expertise. SSPs are better able to keep pace with the evolution of the underlying storage technology and will integrate the solution with the managed service provider to ensure a single service-management interface.

Hosted Service Provider

The Hosted Service Provider, recognized by businesses like LoudCloud and Intira, is different from the Managed Service Provider in that it provisions customers onto a "standard" infrastructure; including co-location space, network capacity, server capacity, monitoring, and the storage infrastructure.

Businesses that use the Hosting Service Provider will be placed onto a ready-made service infrastructure and can scale use of the entire system on demand. In this case, customers are not presented with a best-of-breed solution tailored to meet their specific infrastructure requirements, nor do customers have a choice over which SSP to use in their solution. Within the Hosted Service Provider segment, storage is integrated into a package that is totally seamless and transparent.

Selecting The Right SSP/Co-location Solution

As information becomes the core business asset, the question is not whether businesses will leverage an outsource partner; the question is which infrastructure components will they outsource. The complexity, cost, and expertise required to maintain just one of the infrastructure components (network access, co-location, security, server, storage, content distribution, monitoring) is overwhelming for most businesses. Even businesses whose core competency is the infrastructure (i.e. Exodus), have discovered that they must select outsource partners to enable a truly enterprise-grade solution across the hoard.

Tomorrow's Fortune 1000 list will be led by businesses that have embraced this change and selected outsourced infrastructure partners as the foundation of their globally integrated solution. Where a business in the past selected its technology vendor because it was a trusted brand with proven reliability and an established record of customer service, today's business is selecting technology service providers. However, the decision hierarchy in selecting a service provider has the same credibility issue as in the past: select an infrastructure service provider that leverages proven technology with substantial depth in experience and a focus on customer service.

In selecting a co-location service, pick one that offers the flexibility to meet your immediate requirements and the breadth of coverage and experience to change as your business changes. If you know the types of service providers you need and would like complete control over each, you may choose a Basic Co-location Service. However, if you require a service designed specifically for your business requirements and managed by a single provider with a single SLA and one monthly invoice, your best choice may well be a Managed Service Provider.

Because managing mission-critical information securely and reliably is so vital to a business's success, the choice of a storage service provider is fast becoming one of the more important outsourced solution decisions an enterprise will make. To get that optimum solution, you need to ask tough questions. What level of uptime is guaranteed by the SSP? How flexible and scalable is the technology my data is going to reside on? What data security safeguards are in place? What kind of monitoring is in place? What measures are in place to protect against human error? A close look at these and other critical issues can do a lot to protect both your company and your peace of mind. By selecting the right SSP and co-location solution, you can get a scalable storage solution that has the flexibility and capacity to grow as fast as your business itself.

Jason Schaffer is the vice president of marketing at Storage Way (Fremont, CA).