Unexpected Benefits of Multi-Tenant Data Centers During a Network Crisis

Chad Rodriguez, Vice President of Network & Cloud, Stream Data Centers

The COVID-19 pandemic has forced companies around the world to shift to a remote workforce requiring instant access to robust network resources enabled by the cloud. Pre-COVID-19 demand forecasts are now null and void, giving rise to an analysis of the new norm that includes sectors and industries forced to accelerate their cloud and digital transformation initiatives while at the same time managing the massive increase in current system workload. Even non-technical users recognize the additional burden businesses have placed on basic systems like email, messaging, VPNs and videoconferencing. These services orchestrate and underpin the collaboration that’s so essential to day-to-day activities.

Big, Fast Growth Got Bigger and Faster

Even before the 2020 pandemic, the rapid adoption of cloud services by enterprise and public sector users was incredibly impressive. Without belaboring the well-established benefits of cloud adoption, it’s clear that the ability to acquire IT services on demand, and scale resources up or down as needed is hugely important and has become even more crucial in today’s uncertain working environment.

The Impact of Physical Environment on Data Traffic Capability

As with the rapid adoption of the cloud, the growth of the multi-tenant data center (MTDC) industry has been fueled by well-documented financial advantages over internal facility models — including lower total cost of ownership (TCO) and more predictable budget forecasting for data center costs. Customer costs within a MTDC are generally “linear” versus “chunky” costs due to large component upgrades with internal data center facilities. Other benefits include defined contract terms that limit risk of obsolescence by matching equipment refresh cycles, reduced staffing complexity and defined performance-based service level agreements. Ultimately, these benefits mirror the cloud’s main benefit — giving MTDC clients predictable, reliable access to critical facilities on an as-needed basis.

Network providers who augmented their architectures to support customers deployed at large multi-tenant data centers were well prepared for the surge in services created by the pandemic.

The Fresher the Network, the More Resilient the Response

One often underappreciated benefit of MTDC facilities is the quality of network services available within a modern data center’s network and communications ecosystem. In a traditional in-house enterprise data center, the owner/operator orders network from the carrier(s) built into their facility and uses these services for several years with few changes other than volume. The carrier typically does not have to invest significant additional capital into the network equipment deployed on-site as there are no other customers to serve and no new types of services delivered.During normal times with predictable growth, this type of deployment works well. The past few months, however, have challenged the capacity of carrier deployments at in-house enterprise data center facilities. Carriers face the challenges of managing the transition from a scenario where previously stable and predictable customers suddenly need four to six times the volume of current services, while managing demand for new services. This challenge is exacerbated by the need for physical equipment upgrades that require sending carrier technicians to operate within the in-house data centers at a time when employee movement is difficult or restricted.

Chris Bair, Senior Vice President of Sales and Leasing, Stream Data Centers

One of the unforeseen benefits seen by MTDC customers during this crisis is the ability for the majority of network services and carriers located within these facilities to rapidly deliver additional service offerings and capacity to users within the data center campus. Much like infamous bank robber Willie Sutton, who claimed to rob banks because “That’s where the money is,” carriers and network service providers have long recognized that multi-tenant data centers are important to serve because “That’s where the users are.”  In addition to the revenue opportunity, the ability to deploy on a large MTDC campus drives significant savings and operational efficiencies for carriers. Carriers located in large MTDC campus environments see significant intra-network benefits — network optimization, cost savings and better resiliency.

Network Resiliency without the Hotel

Starting about the time of the deregulation of telecommunications in 1996, U.S.-based communications, network, content and cloud providers have utilized “carrier hotels” as critical aggregation points for providers to exchange traffic over physical (cross-connects) and logical (peering) networks. Carrier hotels remains critical to network delivery in almost every major metropolitan area and they remain ideal locations for high volume users to acquire carrier and network services today. Carrier hotels also have their detractors, often for economic reasons (rent and interconnection fees can feel exorbitant for some end users) as well as for the inherent risk of carrier hotel as a single point of failure in a major market.

For the reasons discussed above, network provider equipment that is deployed within large MTDC campuses is sufficiently robust for delivering significant resiliency and scalability without the need to deploy within a carrier hotel. To enhance performance and reduce single points of failure, sophisticated end-users and smart network providers deploying at an MTDC will often create routes that avoid the local carrier hotels, thus creating additional resiliency for all the provider’s customers within the campus.

There are other technologies and service providers that drive scalable/resilient network options to non-carrier hotel MTDC campuses. Fortunately, there’s no shortage of cloud enablers to facilitate quick scaling, enhanced security and intelligent network traffic distribution for the evolving digital-era architectures. Customers no longer need to deploy at a carrier hotel or run individual network elements to a variety of disparate locations to see the financial and operational benefits often associated with deploying in a traditional carrier hotel.

Network Exercise, Network Muscle

Network providers who augmented their architectures to support customers deployed at large multi-tenant data centers were well prepared for the surge in services created by the pandemic. Network and carrier service providers who over the past 18-24 months were able to keep pace with the changes in volume and services attributed to the increase in connected devices, rise in content, and demand for increased connection speed were ready for this surge. Much like a gym, large MTDC campuses created an ideal environment for critical carrier and network service providers to stay supple and grow strong by being in an environment that required them to exercise their equipment. This gave them the ability to adapt and overcome while remaining a critical part of our nation’s ability to stay productive and safe during the COVID-19 pandemic. 

Chad Rodriguez is Vice President of Network and Cloud, and Chris Bair is  Senior Vice President of Sales and Leasing,  for Stream Data Centers.