The best partnerships in business and technology are often those where growth meets growth. Such is the case with two very unlike companies: global shipping/logistics provider BDP International and its data center and service partner SunGard Availability Services, a key subsidiary of Fortune 500 SunGard Data Systems.
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.
Which puts it precisely on plan.
Most hosted data centers are built with the greatest capital cost coming upfront, and relatively little of this might arise from the actual space that is built or leased. Data center hosting and service providers, and they are many, carefully plan against future demand to manage their expansions.
Build-out is accomplished in phases, with the bulk of initial investment dedicated to energy, HVAC, connectivity, security and fire suppression investments. Lot space for emergency generators and rooftop space for cooling units is also acquired upfront. Expansion progresses only as revenue "triggers" are met, at which point cost per square foot decreases with more raised floor space that supports margins and future ability to acquire customers at competitive price points. "It's drop, tie in and go where you save money after you get past the upfront costs," says Rob Salvatore, SunGard's director of infrastructure compliance and green initiatives.
The Uptime Institute, an organization of very large companies, has established standards for four tiers of quality and reliability that in turn dictate pricing for the hosting industry. The tiers are defined by the source and number of independent power feeds, their capacity and "density," or the resulting power per square foot of data center space. This becomes very important when comparing the specs of older and newer facilities, says Hopkins, including his own. "You can buy blade servers but you can't populate them in [an older] environment. Or, you might be able to use the technology but you can't take full advantage because of power and cooling restrictions."
While older facilities might offer 35-watt square foot density (which is measured over the entire used and unused raised floor space), new facilities can approach 10 times that figure, but even a modern Tier-3 facility with 100-watt density can't support all use cases.
Salvatore, whose job is equal parts engineering efficiency and compliance, provided a tour of the Spring Garden facility, which sits tidily but unadvertised in a busy downtown Philadelphia office district. The core of the facility's infrastructure is in its substation power source, a pair of redundant 13,200-volt power feeds already planned for expansion up to 12 megawatts. The substation is backed by a huge room with thousands of banked batteries and a pair of 2,000 kilowatt generators, with concrete pads ready for four more as expansion proceeds. No pictures were allowed or provided to show the scale of this substation, but suffice it to say that visitors are not allowed within 40 to 50 feet of the main power lines terminus, a massive two-ended bank of redundant transformers and huge circuit breakers that resembles a set piece from Fritz Lang's Metropolis.
The "green" in Salvatore's title is not just for show, as SunGard has invested heavily in energy-saving technologies. These include transformerless DC power supplies, power and energy monitoring and control with massive high-efficiency blower and impeller cooling systems based on traditional and newer technologies for risk purposes. It extends right down to the catalytic scrubbers for each emergency generator that cut polluting gases by 85 percent and cost hundreds of thousands of dollars each, though they may never be used.
At this scale, green is a mix of cost sensitivity and compliance, but also social responsibility in engineering that examined how the facility fit into and might affect the neighborhood under differing conditions.
Energy costs are an ongoing challenge to operating expense, and providers like SunGard hedge costs where energy markets exist. For colocation facilities in states with deregulated power, the company works to develop energy programs with utilities. "We take advantage of what we can, but in regulated markets you don't have a lot of levers to pull," Colesante says. While data center providers try to shield customers from energy cost swings, new contracts are negotiated with clauses that push those costs to the customer.
Engineering lessens the effect of energy price volatility. Newer data centers are not as heavily cooled as in the past and take advantage of modern hardware that safely operates at higher temperatures. "Pumping really cool air into the data center is something of the past," says Hopkins. "You take more advantage of the temperature outside to cool water and use cooler nights versus cranking up the AC." Whether it's called green or simply economic sense, data centers have become more creative in an industry where cooling accounts for 50 to 60 percent of operating power costs.
The Other "Cool Stuff"
Tight security is a given at the modern data center, and it is difficult to avoid a bit of vicarious observation that doesn't give lie to James Bond intrigue. No one unwanted gets into Spring Garden, and even unexpected VIPs might need a password for verification. Cameras and motion detectors are almost comically omnipresent and every visitor, including senior SunGard execs, wear a badge that pinpoints their exact location at all times to security staff.
Past the security desk, a floor-to-ceiling bank of thick frosted glass suddenly turns clear with a swipe of Salvatore's security badge to reveal the secured network operations center (NOC), the always-staffed room of monitors and sensors for fire systems and operating statistics for every other aspect of the operation. Another swipe reactivates the electrified glass to opaque. There are biometric fingerprint stations to back up badge IDs at every sensitive area, "man trap" corridors that cannot be opened from both ends at the same time, locked doors with enigmatic signs and more measures Salvatore is not inclined to discuss.
Back To Business
While Fortune 500 companies are still likely to operate their own data centers, small, data-intensive companies of $500 million to large midsized companies up to $2 billion in revenues are likely candidates for managed services such as SunGard's. Larger companies might also lease such facilities for two or three years as swing space while private expansion is delayed or under way, or contract for backup, workforce relocation or continuity services in the event of a disaster. SunGard's total global data center and operations inventory is about 4 million square feet of floor space. This includes client pretested remote office space and mobile facilities for full-blown evacuations in the event of a major disaster. Supporting all of this is consulting and business continuity planning software that's sold into the disaster recovery customer base.
While different data availability providers offer a range of services depending on the use case, the primary topic for customers like BDP are the SunGard services that address production applications running batch and real time in production modes.
SunGard's managed services fall into three buckets. The first is full-managed services, in which SunGard takes any business application a customer may have running and provides all the infrastructure needed to ensure 24x7x365 availability, as well as monitors, secures and backs it up redundantly.
"We don't support the application per se, we support everything below the application," says Colesante. "The analogy might be that we're the plumbers and carpenters and electricians for the technology industry, but it's all about providing a secure bubble that is always up and running." Nearly all fully managed engagements run from within SunGard facilities to ensure manageability and service level agreements for recovery.
The second bucket is the aforementioned colocation services with their regional flair for customers with offices within range of the facility. In this model, customers pay for a slice of the data center based on floor space and enter into secured cubes, cages or racks housing their equipment. While the entire facility is extraordinarily secure, customers can further secure their gear with stronger lockdown options that regulations or data sensitivity might call for. Customers are also offered work cubicles, workstations and conference rooms to conduct business while working at the facility.
The final bucket is colocation with a la carte managed services on top of that, which is the model BDP International is now exploring. The menu of services includes managed backups, shared storage area network services and router or wide area network management. Loup, the BDP CIO, uses SunGard facilities in Philadelphia and Houston for failover and is looking into rack-and-stack services rather than send his staff around the world to perform menial tasks.
"If we take a 'follow the sun' approach for IT customer service, my Asia-Pacific IT staff should be able to pick up the phone, call SunGard and say, I need you to reboot a server, apply patches, whatever," Loup says. "I've got IT staff around the world doing the exact same thing in a center of excellence model we started last year, and we'd like to standardize our service offerings and service catalog."
"All about Availability"
Global businesses often run into regional regulations that require local storage of electronic data and documents, as is the case in Germany or China for example. BDP has followed SunGard's footprint to meet some of these requirements, but might engage other regional providers where it cannot.
But the biggest focus is centralization. "Now we have global applications right here to serve entities in Asia and Europe with advanced environmentals, failover and redundancies, because if we didn't, we'd have huge exposure in IT support at 2 a.m.," Loup says. "That's why we have a facility that ensures a big redundancy plan for us."
Hopkins says his role as SunGard's availability CIO is a bit different than the CIO offices he held in corporate settings because of segregated duties. "At SunGard, my advantage is I let Dave [Colesante] worry about the network, SAN and firewalls."
But unlike a CIO operating within firewalls, research and marketing firms regularly observe SunGard's and Hopkin's performance. A disaster might occur at any level from a primary server to a power grid or SAN. A hurricane can knock out a power grid for weeks, as was the case just last September in Houston. The main metrics are RPO (recovery point objective) and RTO (recovery time objective). "What has changed in the last 10 years is that businesses are intolerant of any data loss so they look for a RPO of basically zero and they want the systems back in minutes, not days," Hopkins says. "My pressure is all about availability, which is the foundation of our reputation, and today, everybody knows your availability."
BDP didn't even negotiate over downtime because the service-level agreements for a data center like Spring Garden are so patently laid out. Loup is more concerned about how BDP builds out its application strategy than he is worried about what the data center can provide. BDP recently built a new data warehouse that required large amounts of storage and processors for Cognos, Informatica and an Oracle database in dedicated racks. "We're expecting uninterruptible power with batteries and dual power sources into our cages, fully functional redundant air conditioning, fire suppression systems and broadband from multiple vendors. We already know we're getting the ping, power and pipe we cannot provide internally."
Should he need another SAN, he buys it with the full expectation that SunGard is able to support it flawlessly. "That's what we want," Loup says, "because we are not a data center company. We're a service company."
This story originally ran in Information Management Focus on Data Centers. To view the digital edition, click here.
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