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Data centre management in Nigeria: An overview

By Guardian Nigeria
08 April 2015   |   4:02 pm
GLOBALLY today, top companies are increasingly positioning Information Technology (IT) as a strategic asset and sometimes opt to manage their IT operations like an integrated, service-oriented business. In this paradigm, keeping costs low is an imperative. So is aligning IT investments with overarching business imperatives. With the transition to IT service management comes the need…

DataCentreGLOBALLY today, top companies are increasingly positioning Information Technology (IT) as a strategic asset and sometimes opt to manage their IT operations like an integrated, service-oriented business. In this paradigm, keeping costs low is an imperative. So is aligning IT investments with overarching business imperatives.

With the transition to IT service management comes the need for greater flexibility, server and storage utilization, and cost variability. Maturing technologies in virtualization, service provisioning and automation help address these new requirements and enable the development of agile data centers.

New sourcing models, as well as the emergence of cloud computing as a viable and secure platform for IT service delivery, promise even faster, more responsive and more cost-effective data center capabilities.
However, many organizations lack the necessary data center skills or resources to untangle and replace their complex and costly legacy infrastructures.

As such, a contemporary Chief Executive Officer (CEO) typically has to answer challenging questions, such as the “build versus buy” decision, among others, when addressing various operational requirements, especially with regards to increasing business requirements for IT infrastructure.

At what point is the tradeoff between building a data center and outsourcing the data center to a third party provider? What is required to build and manage a facility that is typically not a core competency for most companies? In essence, when does it make sense to build your own data center and when does it make sense to outsource it?

From a high-level perspective, building a data center provides an organization with total control over its facility, operations and manpower. Buying or leasing space from a shared data center can on the other hand provide an attractive business model that focuses costs on operational expenditures only and gives them the flexibility to scale operations at their own pace.

Commenting, a telecoms expert, Kehinde Aluko noted that since either approach has its own benefits, businesses need to make more informed decisions regarding the decision to build or buy data center services by putting into perspective the total cost of data center ownership and the variables that impact this cost.

Aluko posited that building a data center provides organizations with total control over every aspect of their operating environment ranging from operational policies to maintenance activities and the absence of a subscribed rental or lease agreement. One major advantage of this is the freedom to build out space for various functions as needs arise by either retrofitting or embarking on an expansion to fit perceived needs.

According to him, even low-end, non-Tiered Data Centers will require both an immediate capital outlay and recurring operations costs. The construction project itself requires months or years of planning and execution, and organisations must take into consideration the full CAPEX required for building costs. The cost of land and its associated expenses such as environmental impact assessments, building permits and government approvals are a significant investment required to kick start a data center build out.

Furthermore, professional fees will be incurred to engage design, architectural, structural and project management services on site. These costs are usually 20 to 25 per cent of total construction cost and determine the level of quality of the finished facility. The facility needs to be fitted with specialized electrical, mechanical and building management systems that are basic requirements for the operation of a data center. Installations comprise of closed circuit television cameras, electronic access control, fire suppression and detection, precision cooling, and specialized water and fuel supply systems. These systems also require sufficient redundancy to ensure that services are not disrupted during operation and all critical equipment in the data center have effective backup.

The power to support all of the installed systems accounts for 70-80 per cent of the operating expenditure required to run the data center. Typical power to the facility will be via high capacity diesel generators with inverter systems, UPS installations and battery arrays to provide backup power in the event of failure from the primary source.

In addition, an investment needs to be made towards network connectivity for the facility. The preferred mode of connectivity will be via fiber with redundant routes to the facility by a good number of network providers to ensure that the organization can fulfill its diverse connectivity requirements.

To support all of these installations, the organization has to incur additional operating expenditures for staffing, spare parts, training, insurance, diesel costs, facility and infrastructure maintenance. There is a risk associated with not building out enough capacity and facing expensive retrofits to expand, or overbuilding the data center and being faced with inefficiency issues arising from running an almost empty facility for the Day 0 requirements.

Unlike building a data center, the Chief Executive Officer, MainOne Cables, Funke Opeke, said buying or leasing data center services from a colocation provider immediately provides organizations with a predictable operational expenditure based model, which helps with financial planning and budgeting processes.

She added that the need and risk involved in spending a large upfront amount of CAPEX during construction is eliminated in favor of operational expenditures spread over a number of years.

“Buying also gives businesses the ability to add capacity quickly and only when needed without significant financial implications, which is much faster than retrofitting or embarking on an expansion for an internally owned data center. This also highlights the fact that outsourcing data center services provides better access to power and space managed by professionals who have data center operations management as their core competence. In its 2014 Data Center Industry Survey, The Uptime Institute, the global authority of data centers, estimates of 20 per cent of servers in data centers are obsolete, outdated, or unused. Yet, these servers generate huge power and cooling costs!

‘Businesses can also leverage on network cross connection opportunities available in a shared data center environment. These opportunities include connecting to other network providers, application hosting platforms, financial trading platforms and co-tenants in the same business sector. This provides collocated organizations with the ability to enhance performance and achieve business goals which might have been impossible or capital intensive due to distance limitations”, she stressed.

Opeke explained that typical costs for buying data center services are non-recurring costs for equipment setup and monthly recurring costs covering allocated space and metered power. She noted that value added services such as cross connect office space and remote hands services are usually paid for per use or determined at a pre-negotiated price point.

Indeed, as Nigerian businesses expand their participation in the global digital and online economy, in areas such as electronic banking, electronic commerce, online content distribution, e-learning and online testing, investment in ICT platforms will need to grow, and cost control while acquiring access to new technologies will be a major concern for many CEOs, not only now, but for the future. Company IT infrastructure will need to be reliable and effectively networked to handle complex transactions and at the same time have the scalability to meet demand effortlessly as more consumers transact or obtain services online.

To meet this growing need in Nigeria, MainOne, a leading connectivity solutions company recently launched its MDX-i Lekki Data Center, an 18-month project costing N7 billion. Apart from being the premier Tier III certified Data Center in West Africa; it is the most connected Data Center facility in the region, with access to fibre connectivity from all the major ISPs and telecommunications operators in the region.

By providing data center services to the open market, MDX-i has reduced the entry barrier for businesses and government agencies seeking to scale up their ICT operations, as well as technology startups and SME’s. By having the option to subscribe to such services locally, these companies can focus on their core businesses, improve productivity and focus on their business imperatives.