The Data Center Frontier Executive Roundtable features insights from industry executives with lengthy experience in the data center industry. Here’s a look at the insights from Robert Woolley of RagingWire Data Centers.
ROBERT WOOLLEY. RagingWire Data Centers
Bob Woolley is Vice President of Critical Facilities Engineering and Design at RagingWire Data Centers, Inc., responsible for the teams that design, develop and engineer RagingWire’s portfolio of data centers. Bob has extensive experience in building technical programs for mission critical environments and has overseen engineering and operations at over 75 data centers throughout his career. Prior to joining RagingWire, Bob was Vice President of Operations at Primary Integration, one of the largest building commissioning and operational risk management providers. At Lee Technologies, Bob was Vice President of Critical Environment Services, running programs for Microsoft, Coca Cola, Capital One, Fiserv, and KPMG among others. Prior to joining Lee Technologies, he served as Vice President of Data Center Operations for Navisite, as well as Vice President of Engineering for COLO.COM, where he built and commissioned 27 carrier-neutral colocation facilities in 18 months. Woolley studied architecture and electrical engineering at Miami University and telecommunications management at Golden Gate University.
Here’s the full text of Robert Woolley’s insights from our Executive Roundtable:
Data Center Frontier: The recent British Airways data center outage caused widespread disruption to the airline’s operations, with early estimates placing its business impact at more than 80 million pounds ($104 million US). What are the most effective ways to eliminate these type of outages?
Robert Woolley: According to published accounts, the British Airways incident was caused by an operator at their Boadicea House (BoHo) data center. The operator improperly disconnected, and then reconnected system power in such a way that it caused a power surge that damaged some IT equipment, taking a number of production systems off line. The ascribed cause of the failure was operator error.
While human error may have precipitated the incident, it’s clear that there were other contributing factors. Facilities such as BoHo are designed to tolerate the loss of a single electrical feed, and its protective devices should prevent power surges from reaching the IT equipment. Moreover, the BoHo facility is only one of several data centers that support BA’s critical operations. Failover to a secondary facility should have occurred automatically, but didn’t.
The evidence points to a cascading series of errors that resulted in a catastrophic failure, which is typical of major data center incidents. It may be convenient to point to a single cause such as human error, but every link needs to be strong for the chain to maintain integrity.
The lesson learned from this outage is that a simple error can compound into a large scale failure. Better procedures and training could minimize future human errors, but a component failure might produce the same result in the future if other remedies are not enacted.
The root cause is only part of the story. Emphasis should be on the proper operation of the failover scheme between data centers to protect against ANY facility failure. Secondly, the design of the electrical system should preclude the ability to harm the critical load due to a switching procedure. Of course, proper training and change control methodology are also essential.
A data hall in the RagingWire Data Centers’ CA3 facility in Sacramento. (Photo: Rich Miller)
Data Center Frontier: The data center industry saw lots of active M&A activity in the first half of 2017, highlighted by Digital Realty’s acquisition of DuPont Fabros Technology is the sector’s largest deal yet. What’s driving all this consolidation? Is it likely to continue?
Robert Woolley: The data center colocation industry is relatively young, with most people pegging the start at around 1999. Since that time, the industry has seen three waves of mergers and acquisitions – New Entrants, Expansion, and Assets.
The first wave was about New Entrants. Tech companies in adjacent industries would buy a data center start-up as a way to get into the colocation industry. A great example is Exodus Communications, one of the early data center startups, which purchased Global Center in 2000 for $6 billion. After filing for bankruptcy in 2001, Exodus was purchased by Cable and Wireless. Then in 2004, Savvis bought Cable and Wireless America which included Exodus. All the transactions were based on getting into (or out of) the new colocation market.
As the colocation industry matured, the second wave of M&A started around 2010 and was about Expansion. In this wave, we saw Digital Realty buying in the U.S. and Europe, and then Asia. Equinix started buying in Europe, Asia, and Latin America. RagingWire participated in this wave when we joined the NTT Communications family of companies along with Gyron and e-shelter in Europe and Netmagic in India.
The most recent M&A wave has been about Assets. This wave has been marked with the rise of the Real Estate Investment Trust (REIT) and the view of data centers as property assets with a cost basis and a return on investment. The Digital Realty acquisition of DuPont Fabros is largely being viewed as an acquisition of data center assets – 302 megawatts in Northern Virginia, Chicago, and Silicon Valley, plus development opportunities in those sites as well as Toronto and Oregon. The recent acquisition by Equinix of 29 data centers from Verizon fits into this M&A asset wave. The disposition of enterprise data centers such as the CME data center sale to CyrusOne is also part of this wave.[clickToTweet tweet=”Robert Woolley of RagingWire: Going forward, you can expect the asset model to drive M&A activity.” quote=”Robert Woolley of RagingWire: Going forward, you can expect the asset model to drive M&A activity.”]
Interestingly a new asset type is emerging in data center M&A – customers. Because of the long term customer contracts that are typical in colocation plus the trend for a customer to grow with their colocation provider, it is possible to assign an asset valuation to individual customers. For example, Digital Realty’s pending acquisition of DuPont Fabros most likely included a valuation for DuPont’s large cloud customers such as Microsoft and Facebook. The Equinix acquisition of the Verizon data centers also included the addition of over 600 net new customers.
Going forward, you can expect the asset model to drive M&A activity. However, as the supply of available high-quality data center real estate and customer assets decreases, we will see valuation multiples increase, but there may be fewer transactions.
Data Center Frontier: What interesting trends are you seeing in data center power? Is there still room for innovation in data center electric infrastructure?
Robert Woolley: One of the most significant trends in data center power is the continued improvement in the design of electrical distribution equipment to improve worker safety. In addition to arc resistant features such as arc chutes, switchgear is now typically produced with isolated control compartments that allows test access to meters, relays and terminal blocks. Remote racking, remote switching and IR windows enable workers to maintain safe distances from arc flash hazards. Panel boards are now available with finger safe features that allow the safe installation of circuit breakers. Combined with more stringent electrical safety rules and awareness on the part of data center operators, these improvements have materially decreased the risk of operating and servicing the electrical systems.
Another trend is the gradual acceptance of lithium-ion (Li-ion) batteries as an alternative to VRLA (valve-regulated lead-acid). Prices for Li-ion batteries have been steadily decreasing to the point that, while still a higher initial cost, Li-ion is beginning to look very attractive in terms of TCO (total cost of ownership).
Li-ion also has a favorable footprint and weight advantage over traditional battery systems. It’s safe to say that Li-ion battery prices will continue to drop as the technology and chemistry improves, and production volume increases.
A lingering issue with Li-ion is the perception of fire and explosion risk, due to well publicized failures in consumer goods and certain commercial applications. Li-ion will face an uphill battle to overcome these concerns in the risk-adverse data center industry, but a good record of performance and an increasingly favorable cost/benefit should ultimately lead to widespread adoption of the technology.
The RagingWire VA2 data center in Ashburn, Virginia. (Image: RagingWire Data Centers)
Data Center Frontier: It’s increasingly a multi-cloud world. What are key strategies that data center operators and their customers can use to address multi-cloud deployments?
Robert Woolley: Twenty years ago, the choice was between a telecom data center, optimized around a single carrier and a carrier neutral data center, designed to host multiple telecommunications PoPs or points of presence. Most of us would agree that carrier neutral won. Today the choice is between a dedicated data center server environment or a hybrid deployment of colocation, cloud, and legacy in-house data centers. We believe the hybrid approach will win.
In this new hybrid world, data center providers need to make it as easy to connect to multiple clouds as it is to connect to multiple telecommunications networks. The result will take software-defined networks (SDNs) from theory into practice and ultimately business imperative.[clickToTweet tweet=”RagingWire’s Robert Woolley: Data center customers can now have full control over their cloud connections.” quote=”RagingWire’s Robert Woolley: Data center customers can now have full control over their cloud connections.”]
Using SDN, the data center provider delivers direct connections to top cloud providers. We are also seeing this network used to connect to software as a service (SaaS) applications and an ecosystem of on-net buildings and service partners. With this approach, data center customers have full control over their cloud connections. They can turn up, turn down, and change individual connections at any time without involvement from the data center provider. Reporting is in real-time and on-demand.
Interestingly, multi-cloud deployments have ended up delivering a different value proposition than originally conceived. Multi-cloud was once thought to be a strategy for driving down pricing to razor thin margins. Instead, multi-cloud has become a best practice for delivering scalable and flexible on-demand capacity for applications that require that type of computing. For more stable applications, dedicated servers are proving to be more cost effective and reliable.
The hybrid computing model delivered in a colocation data center that meets the requirements for uptime and scalability provides the best of both worlds.