BDP International and SunGard both have remarkable expansion stories. SunGard's Availability Services division has grown to offer managed and colocation services for production environments as well as disaster recovery, business continuity, remote and mobile office facilities and consulting throughout a global network that includes more than 40 data centers.
BDP International is market leader among privately held freight logistics and transportation management firms. From dozens of North American offices and owned units or partners in 120 countries, BDP serves scores of blue-chip clients like Bayer, DuPont, J&J and Heineken with ocean/air/ground transportation, warehousing, logistics management and other services.
The story is an anomaly to businesses suffering under the current economic climate. It is about a $1.6 billion freight solution provider that went from a dozen to more than 100 offices in a short span of years meeting a data center provider with years of 20 percent growth that today buys or leases thousands of feet of floor space years before it is ever put to use. And while BDP is just one of thousands of SunGard customers, their relationship tells a broader story about the data center industry.
A "Typical Client"
BDP International has spent more than $60 million on technology infrastructure, and the visible centerpiece is called BDPSmart, a global communications and information system that advises, alerts and manages shipping from the customer warehouse through shipping nodes and on to destinations through a Web interface.
BDPSmart is a complex amalgam of back-end transaction infrastructure, "a one-of-a-kind knowledge tool," said BDP Mexico Executive Director Mauricio Boy. Boy was speaking for just the latest in a long series of BDP acquisitions that have come among spurts of growth bringing more systems and applications to the mix.
"When you buy a company and expand globally, you're accumulating a lot of specialized applications," says Michael Loup, CIO at BDP International. "As a service company, we focus on building custom solutions for customers so we can get really big companies to do business with us. You end up building an application to handle a need and all of a sudden you've got applications and servers everywhere, so you're always thinking about centralizing that and building global applications."
Thus did BDP's production environment meet a match in SunGard's data center services. More than 10 years ago, BDP had outgrown its corporate office data center, an internal build-out that suddenly looked puny next to the company's ambitions.
BDP's original engagement with SunGard was for colocation services, in which BDP's own staff would enter a secured, leased area, "rack and stack" and maintain its gear in a better facility than it could build itself - a highly secure, redundantly powered and cooled data center.
That BDP offices were physically within city blocks of SunGard's original Philadelphia-based facility was important. "The limit for colocation customers is 50 to 100 miles," says SunGard Availability Services CIO Don Hopkins. "If you think about it, nobody is going to support a colocation services provider they can't reach quickly."
By 2003, BDP's growth had exploded again and now called for at least some of SunGard's remote-managed services as BDP inherited more and more transportation management systems, the logistics industry's equivalent of enterprise resource planning (ERP) systems. "Now that we were getting all these transactions, we wanted to start putting out better technology products for our customers and go from reporting to visibility over the Web, supply chain, event management, data warehousing, better reporting, things that even our large customers can't do by themselves."
BDP's decision to simplify and use SunGard facilities and selective managed services would free its own IT resources to build applications that in turn will supplement or replace parts of their customers' infrastructure. To support this momentum, at the time of this story, BDP was moving its equipment to take up a yet larger space in SunGard's third and most modern Philadelphia facility in the city's Spring Garden neighborhood.
"BDP is a typical customer in that they were expanding as a company and needed additional space, so we gave them more than they immediately needed at Spring Garden with the thought they'd keep growing," says Dave Colesante, SVP and general manager of SunGard managed services.
The Data Center Model
SunGard has more than 10,000 availability customers, but to understand BDP's attraction to colocation and managed services is to understand the growth model for building and managing modern hosted data centers.
The prime metric for a data center service provider is the scale needed for profitable operation. Colesante's remark about BDP's expected growth is a linchpin of demand for data center services, which despite economic conditions, are still growing at percentages from high single to teen to 20-plus digits depending on the service offered. Tier1 Research, a subsidiary of The 451 Group, reports that third-party colocation utilization is at about 85 percent of capacity today in a highly underpenetrated market. Hindering growth, tight lending markets are putting a damper on expansion plans (see related interview).
This is important to the data center industry, since heavy capital investment is required to provide top-quality infrastructure at a cost that easily beats any thought of building captive corporate data centers. The SunGard Spring Garden facility we visited (we were not allowed to take our own pictures), is not among the larger facilities under construction, but at 125,000 square feet (more than a soccer pitch or two American football fields including end zones), has consumed a large downtown office floor and $27 million. About 19,000 square feet, well less than one-third of planned space has been built out with raised floors, security and energy, and sits mostly unoccupied.