Today's episode is going to focus on how we categorize, or group, the many different facets -- the many different segments or sub-sectors if you will -- of the data center industry as a whole.
Just to make sure that everyone's on the same page:
Gartner’s Data Center Definition
Gartner defines a data center as a place that “houses and maintains back-end information technology (IT) systems and data stores — its mainframes, servers, and databases. In the days of large, centralized IT operations, this department and all the systems resided in one physical place, hence the name data center.”
Now that definition from Gartner maybe a little bit obsolete. The days of everything being in one physical place are long gone -- and doing so would get your wrist slapped pretty hard if you're in facilities, IT, or the CIO role. By definition, we need to have our data and our systems spread out over multiple locations for no other reasons at least for a backup and disaster recovery, for business continuity reasons.
And frankly, any companies that are colocation providers or wholesale data center providers that are just limited to a single location usually have their growth really hampered by being just one single location.
In other words, a lot of clients won’t sign up with them at all because they don't have multiple locations, not just for load balancing or latency reasons, but more from a DR (disaster recovery) perspective.
TechTarget’s View on Data Centers
TechTarget has a slightly different definition of what a data center is.
TechTarget sees a data center as a “facility composed of networked computers and storage that businesses or other organizations use to organize, process, store, and disseminate large amounts of data.”
So that’s TechTarget’s way of looking at data centers.
Wikipedia’s Consensus on the Definition of Data Centers
Wikipedia has its own definition of a data center as well: “a facility used to house computer systems and associated components, such as telecommunications and storage systems.”
So we have three overlapping, fairly similar definitions of a data center as a place that we store data: usually in multiple locations, usually there’s storage, systems, telecommunications infrastructure, and obviously, there’s power as well. Power is a huge part of data centers. None of these three organizations touched on power.
But we know that what defines a lot of the capabilities of end-user data centers, as well as colocation providers and wholesale data center providers, has to do with how many megawatts or kilowatts of power that they can deliver at a single location.
Defining Colocation in the Context of Colocation Data Centers
When it comes to colocation, that’s also another really important area to make sure that everyone’s on the same page about.
What exactly is colocation in the context of the data center industry? Let’s look at three different colocation definitions.
Colocation Defined by CyrusOne
CyrusOne says that a colocation facility “is a secure physical site or building where data communications media converge and are interconnected.”
So CyrusOne feels that security is obviously important. Physical security is supremely important. It’s a building where data communications converge and are interconnected together. For example: where you’d have the idea of a meet me room (MMR) and being carrier-neutral -- all that good stuff.
TechTarget’s Definition of Colocation
TechTarget has a slightly different way of defining colocation.
TechTarget sees a colocation data center as a “data center facility in which a business can rent space for servers and other computing hardware. Typically, a colo provides the building, cooling, power, bandwidth, and physical security while the customer provides servers and storage.”
So it’s a little different with that. CyrusOne is in the business of selling colocation space. And it also sells wholesale data center space, if I understand their business model.
And TechTarget, on the other hand, writes about a lot of this.
So TechTarget again sees as a colocation space as a “data center facility in which a business can rent space for servers and other computing hardware.” So far so good.
“Typically, a colo provides the building, cooling (computer room air conditioning or CRACs), power, bandwidth, and physical security while the customer provides servers and storage.”
With power, it’s a big factor. And we know that colocation providers charge more, depending on how much power you need.
Colocation providers sell and provide bandwidth. And colocation providers also charge more for more bandwidth, depending on your needs.
And physical security is a given -- way beyond fences, guards, biometrics, mantrap doors.
Again, the customer provides the servers and storage.
The Wikipedia Consensus on Colocation
Wikipedia also has a definition of colocation. How does Wikipedia’s definition differ from CyrusOne and TechTarget?
Wikipedia sees a colocation center as a “‘carrier hotel’; a type of data center where equipment, space, and bandwidth are available for rental to retail customers. Colocation facilities provide space, power, cooling, and physical security for the server, storage, and networking equipment of other firms — and connect them to a variety of telecommunications and network service providers — with a minimum of cost and complexity.”
That almost sounds like a marketing communications person from a colocation provider wrote it. Let’s break that down.
So what's interesting is Wikipedia dials into the idea of a carrier hotel -- a carrier-neutral kind of facility where lots of telecommunications carriers come together.
Wikipedia is also focusing on equipment, space, and bandwidth -- which are available for rental to retail customers. Space and bandwidth certainly are. I don’t know that many colocation facilities that rent equipment-- to a certain degree, they are definitely renting some types of equipment. But most colocation customers are typically bringing their own server -- shipping their own servers in.
“Colocation facilities provide space, power, cooling, and physical security for the server, storage, and networking equipment of other firms.”
Of other firms - yes, that’s a key thing.
“And connect them to a variety of telecommunications and network service providers.”
Again, that’s the whole idea of the carrier hotel, the carrier-neutral meet me room kind of approach.
“with a minimum of cost and complexity.”
Yes obviously, a big part of the value proposition of colocation and wholesale data center providers is being able to do it better, at a lower cost, than end users can do for themselves.
The more time goes, and the more complex the needs are for physical security, network security, uptime, and terabytes and petabytes go up -- regardless of whether we’re talking about storage or transfer -- the more likely it is that the balance is going to continue to tip in favor of outsourcing.
Granted, there are plenty of enterprise IT data center managers and enterprise CIOs that present some fairly compelling arguments for why they keep their data center facilities in-house.
But different strokes for different folks. Different organizations have different needs and different budgets.
The focus of this podcast episode is making sure that we’re properly categorizing, properly grouping, the different parts of the data center industry -- those that actually sell to data center operators, both colocation and wholesale data center operators -- those that sell to data center end users. Again, we’re largely talking about enterprise IT influencers and decision makers.
Data Center Industry Over-Simplification, But a Good Starting Point
And then there's vendors and companies that sell to both of these groups:
- Cloud service providers and hosting providers -- They're usually renting space from one or more colocation or wholesale providers -- depending on their size, their location, and their business model.
- Managed service providers -- And then there's managed service providers that also interact with the data center operators, especially with colocation providers. But sometimes with wholesale providers as well. Managed service providers offer outsourced IT services for businesses of all sizes. They’re typically most appealing to small and medium-sized businesses that don't have huge IT teams in-house. Colocation providers and wholesale data center providers are also frequently setting up channel partner programs for managed service providers. Managed service providers also frequently participate in channel partner programs from cloud service providers and hosting providers as well.
So at the risk of a kind of oversimplification of all of this:
Think about like these three buckets
Data center operators -- You have the data center operators, both colocation and wholesale data center operators. That's in bucket number one.
Data center end users -- And bucket number two is the end users of data centers, basically enterprise IT users.
Vendors that sell to these two groups -- And then in bucket number three are the vendors, the companies, that sell to these two groups: the data center operators and the data center end users.
So now that we kind of understand these three larger groupings, what exactly are these sub-sectors, sub-facets of the mission critical data center industry -- that are worth getting our minds around to be more successful in selling to data centers? (regardless of whether we’re selling to outsourced data center providers like colocation and wholesale providers, or end users)
Asset management can be best defined as the “set of business practices that join financial, contractual and inventory functions to support lifecycle management and strategic decision making for the IT environment. Assets include all elements of software and hardware that are found in the business environment.” (Wikipedia’s definition of IT asset management (ITAM))
What are some examples of companies that provide asset management solutions in the data center space?
- Apto Solutions in Atlanta
- OceanTech IT Asset Disposition in Minneapolis
- Sipi Asset Recovery in Elk Grove Village, Illinois (formerly known as Belmont Technology Remarketing)
So these are some example of asset management companies that do a lot of work in the data center mission critical space.
Data Center Brokerage
There are also brokerage companies that work within the data center, mission critical, and cloud services industries.
Brokers sometimes act as or position themselves more as, IT consulting firms. But the big difference is that traditionally IT consulting firms get paid by their clients. Brokers, brokerage firms that work in the data center space aren’t paid by clients. Brokers are usually paid by the cloud services providers, the data center providers, or the telecommunications providers that they bring the deal to. It’s almost like a commission-only sales team.
Data center brokerages typically “assist cloud buyers with decision making by helping them evaluate, shortlist and select a cloud vendor or solution based on specific requirements. They’ll also negotiate terms and conditions, pricing, delivery, deployment and other details with a cloud vendor on behalf of a buyer. Although primarily considered a sales and marketing-oriented service provider, a cloud broker also may provide consultation, deployment, integration, and migration monitoring services.” (Techopedia)
So that’s the definition of brokerage in the data center and cloud services space from Techopedia.
What’s interesting about Techopedia’s definition: it’s zeroing in on the fact that there are definitely some brokerage firms that move up the value chain, where besides just earning commissions from bringing deals to data center operators and cloud services providers, the brokers will also sell higher level consulting.
Brokerage firms can actually assist with deployments. They can assist with integration work and migration monitoring services. But most brokers typically don’t have the IT staff or facilities staff to get involved in selling these kinds of professional services. If their firms had these talents on payroll, the firms would likely position themselves more as data center consulting firms or data center integrators.
Some examples of brokerage firms in the data center operator space include:
- ColoAdvisor in Livingston, New Jersey
- COLOpeople in Bonsall, California
- Datatel1 in Newport Beach, California
- StrataCore in Seattle
Data Center Cleaning
Besides asset management and brokerage, there are also cleaning companies -- that specialize in just going in and cleaning data center facilities.
A few data center cleaning companies that come to mind include:
- Controlled Contamination Services in San Diego
- Data Clean Corporation
- SPEC-CLEAN in Brookfield, Connecticut
- Sterile Environment Technologies (SET3) in Orlando
SET3 has actually come by and one of their engineers has given a talk at our local AFCOM Miami chapter in South Florida.
Data Center Construction Firms
We talked about asset management, brokerage, and cleaning. Another big part of the data center, mission critical industry are construction firms.
And there are dozens of data center construction firms that aspire to build lots of data centers; some that come to mind include:
- Caliente Construction, Inc. in Tempe, Arizona
- RK Mission Critical in Denver
- Walbridge in Detroit
Cooling is another big area when it comes to selling to data center operators and end users of data centers. There seems to be an insatiable thirst for innovative ways to cool data centers, way beyond traditional air flow. You might want to look at these companies:
- AdaptivCOOL in Milford, New Hampshire
- Ebullient in Madison, Wisconsin
- OptiCool Technologies in Rochester, New York
Data Center Design
Design is another big part of the data center industry. It takes a lot of thought to put together facilities that are energy efficient, in the right location, provide the right kind of value proposition -- designing with DR (disaster recovery) in mind -- so you’re away from floodplains and keeping cooling in mind.
A lot of effort goes into the design of data centers behind the scenes before a colocation provider is ever ready to start the marketing and sales of the space there before an end user would ever be ready to move in.
Some of the firms that specialize in design in the data center space include:
- BRUNS-PAK Data Center Solutions in Edison, New Jersey
- Leading Edge Design Group in Enfield, New Hampshire
- Total Site Solutions in Round Rock, Texas
Electrical Construction for Data Centers
Another area of the data center industry that's especially important is on the power side; in particular, electrical contracting and electrical construction.
This includes companies like:
- Atom Power, Inc. in Charlotte (While not truly electrical construction in the sense of being an electrical contractor, Atom Power is developing a solid state power circuit that's a game changer for improving the safety in mission critical data center facilities )
- Parsons Electric LLC in Minneapolis
- RAMCO Electrical Contracting Corporation in Staten Island
Data Center Engineering Firms
There are also engineering firms to keep in mind. This includes companies like:
- Bala Consulting Engineers in King of Prussia, Pennsylvania
- Environmental Air Systems LLC. in Greensboro, North Carolina
- kW Mission Critical Engineering in Troy, New York
Data Center Facilities Experts
Besides design, electrical, and engineering, data centers are physical buildings. They’re physical spaces -- facilities. And there a number of companies that can help with the interior issues that come up in the facilities part of data centers. This includes:
- Chatsworth Products in Agoura Hills, California
- Facility Gateway Corporation in Madison, Wisconsin
- Genelco in Phoenix (met some of these folks at a small mission critical conference, just outside of Phoenix in Scottsdale, a while back)
Fire Protection for Data Centers
Fire protection is another big area that comes to mind when it comes to categorizing and segmenting the data center space. Who are some bigger players in fire protection?
- Fike Corporation in Blue Springs, Missouri
- ORR Protection Systems in Louisville
- The Hiller Companies in Mobile, Alabama
Data Center Hardware
Another area that's big in data centers is the servers -- equipment -- everything that goes into the hardware. So we have
- Aberdeen LLC in Santa Fe Springs, California
- Penguin Computing in Fremont, California
- Systems Maintenance Services in Charlotte (I’ve heard from those folks a whole bunch of times about looking to grow out their partner program -- partnering with managed services providers and colocation providers. The company does third-party outsourced hardware maintenance for data centers. )
Data Center Integrators
Pulling all of this together -- there are so many different vendors and companies. Even just among telecommunications providers, there’s a lot to do and keep track of.
But with so many different assets and services that need to come together for a data center to function properly, regardless of whether it’s an outsourced data center -- like a colocation or wholesale facility -- or an end user data center.
So integrators are a big deal including
- Bick Group in St. Louis
- Delta Computer Group in Farmingdale, New York
- LDP Associates in Phoenix
Monitoring Data Centers
Monitoring is a big area as well. You’ve got to keep track of what's going on inside the data center, 7/24 365 days a year. You absolutely, positively need to keep on top of all different kinds of environmental monitoring, security monitoring, and performance monitoring.
You need to keep track of and make sure you're meeting seating all those SLAs (service level agreements). For help, many turn to companies like:
- APCON in Wilsonville, Oregon
- INOC, LLC in Northbrook, Illinois
- TempAlert in Boston
They’re all big in this space.
Interestingly enough: there’s a blog post on one of our websites about data center environmental monitoring systems that continues to get a lot of traction and interest from end users in Fortune 1000 IT organizations.
Now, as we start to come down the home stretch on organizing, segmenting, and categorizing the different facets of the data center industry: we just talked about
- Hardware providers --- companies that sell and manufacturer hardware, as well as companies that maintain hardware
- The importance of integrators and monitoring
Power for Data Centers
A couple more parts of the data center industry that I want to make sure that you're aware: one would be power-related companies like:
- Canara Inc. in Atlanta
- ComRent Load Bank Solutions in Upper Marlboro, Maryland
- HM Cragg in Minneapolis (big in the PDU - power distribution unit -- space)
Data Center Real Estate
Real estate is hugely important when it comes to selecting the right land and building -- evaluating potential retrofits for where to house colocation and wholesale data centers on the outsourced side, as well as end user data centers.
Companies that come to mind might be:
- JLL (Jones Lang La Salle, a Fortune 500 commercial real estate company)
- Sabey Corporation in Seattle
- Site Selection Group in Dallas
Data Center Security
Security is also a huge issue for data centers -- both physical security and network security, all different kinds of ways of making sure that you control access to physical space.
If you talk with anyone that's ever worked in a colocation facility, you might heat horror stories or paranoia. But at the end of the day, clients of outsourced providers and end users demand very high levels of security. There are hundreds of companies that could help you with security-related concerns in a data center including:
- A-LIGN in Tampa (specializing in the compliance aspect of security)
- Corero Network Security in Marlborough, Massachusetts
- IDenticard Systems in Manheim, Pennsylvania
Data Center Software
Software for data centers is another big area that I’d be remiss if I didn’t mention.
For example, there’s data center infrastructure management (DCIM) software. But that’s certainly not the entire realm of software that’s useful within a data center.
But if you’re trying to get a feel for the different players and software, some you may want to look at include:
- Cormant, Inc. in San Luis Obispo, California
- Jelastic in Palo Alto, California
- Nlyte Software in San Mateo, California
Storage for Data Centers
Where do all the terabytes and the petabytes get stored?
In the data center industry, storage is a big area. So to get a feel for this segment, start with companies like:
- Bright Computing in San Jose
- DataSpan in Dallas
- Tegile, a Western Digital Brand in Newark, California
The final two categories worth digging into, when it comes to categorizing, cataloging, and segmenting the whole data center space: telecommunications and virtualization
Telecommunications for Data Centers
There are dozens of different telecommunications providers that have equipment for both within the data center and the providers that bring lines into the space -- powering the idea of the carrier hotel, meet me room, and all that good stuff.
As a jumping off point for navigating the telecommunications companies with deep specialization in the data center industry, look at:
- CloudGenix in San Jose
- FPL FiberNet in Miami
- Power & Tel in Memphis
There are dozens of companies that provide all different kinds of solutions related to telecommunications in the data center, mission critical industry.
Virtualization for Data Centers
Rounding out our look of -- starting with the ABCs -- the bigger segments and facets of the data center industry would be virtualization.
Virtualizing resources allows you to shrink more into smaller spaces -- a big trend as the cost per square foot and cooling continues to fluctuate over time.
A quick survey of who’s solving virtualization-related problems in the data center industry -- both on the outsourced colocation and wholesale data center side, as well as the end user enterprise data center side -- might include:
- Stratodesk in San Francisco
- Unidesk in Marlborough, Massachusetts
- Virtuozzo in Seattle
The Bottom Line on Defining the Data Center Ecosystem
So there you have it: our quick, informal rundown of how the data center industry is organized.
We first talked about the definitions of data centers and colocation. We talked about how you could broadly group this categorization into the operators themselves, the end users, as well as the companies and vendors that sell to these two groups.
And in this podcast episode, we’ve been talking primarily about the vendors and companies that sell to these two groups -- in this particular episode, how we categorize and group the many different facets of the data center industry.
We’re so glad to have you with us for this episode of the Selling to Data Centers Podcast.
Hopefully, this episode has given you some good food for thought on how the industry is organized and how you can better go after different opportunities that you may be currently overlooking when selling to data centers.
I’m Joshua Feinberg. And we look forward to seeing you back again next time.