Tier IV Data Centers & the Tooth Fairy

So my son lost his first tooth last week.  As any parent knows, this is a monumental occasion in the life of a five-year-old (and his parents).  On the night of the “big event” we finished reading our stories and our conversation turned to the impending arrival of the Tooth Fairy.  He had all sorts of questions: where does she live, how does she know where to go, what does she do with the teeth…and so on. As parents we answer to the best of our ability and wonder if what we are saying actually makes sense to a pre-kindergartener. 

Finally, with tooth securely ensconced in a special “tooth box” (with pirate motif), and tooth box securely hidden under the pillow, my son drifted off to sleep.  As I lay there I marvelled at the simple trust that young ones give their parents.  At the simple joy that they get from the act of hiding a tooth for a mythical lady to find. It brought a smile to my face.  As I stared at my sleeping, toothless wonder, I felt a little sad thinking about the day when kids “figure it out”.  They learn that mom and dad are the tooth fairy.  As the parent of older kids (and in the midst of my “second rodeo”) I know for a fact that kids survive when the learn “the truth”. My son will be just fine, but it is sad nonetheless.

Last week we lost a colocation deal.  Like most companies, we like to do a debrief with the prospect to find out what we could have done better.  Was our price too high? Was our location not good for the client? Did the salesperson commit a social faux pas?  We like  to know this data because it helps us grow as a company. 

The after-action for this account surprised me.  I have to admit, this was a first.  The prospect said that all things being equal (our price was neck and neck with the competitor that won the deal) they felt like they had to pick the Tier IV data center. 

WHAT? Tier IV! In Dallas?  My first thought was that there was a new player in town that I had missed. 

I am not aware of commercial Tier IV data centers in this market.  I mean “fault tolerant”? Active-Active? That’s Two-each, N+1 data centers in one.  I call bull.

We asked the prospect why the Tier IV data center was not more expensive than our data center. He didn’t seem to know.  All he knew was that Tier IV must be better than Tier III right?  Such a bargain he got!

So what are we to do? After some research I am aware of two competitors in the market that ACTIVELY claim and market Tier IV data centers.  Well I am not going to do much because Horizon refuses to play that game, even if it costs us deals.

The difference between my son and the “Tier IV buyer” is that when my son finds out there is no tooth fairy, he will be fine. I wonder how the prospect is going to be when he finds out he doesn’t have a Tier IV data center? 

For the life of me I do not understand why prospects don’t want to see  “one-lines” or to VERIFY what they are buying.  You want to see Horizon’s infrastructure design? Go to Digital Realty Trusts website, we have two of their data centers. No smoke and mirrors, the design is tried and true (and it works by the way). Go to Powerloft’s website, see our design there. We don’t hide it, we are proud of our products and services. We pick builders that build great infrastructures.

So son, there is no tooth fairy.  You will grow up, learn this fact, and you will still love your parents, the earth will continue to turn and you will suffer no downtime. 

Mr. “Tier IV” customer, I hope your world continues to turn and that you suffer no downtime either, because you were sold a bill of goods.

And finally to those folks marketing thier “Tier IV” data centers: you are not helping our industry one bit by misleading the consumer, big thanks from those of us doing it the right way.

Its the little things…..nothing to do with data centers

So the bully pulpit of the blog is a heady thing.  While I created this blog to talk about all things data center and cloud….I realize what millions of bloggers have realized…..This is an ideal forum to share not only my business views but my personal views as well.  And that is what this blog entry is.

This week I went data center and customer shopping. This weeks trip took me to the Bay area which is the next stop of the Horizon juggernaut. Had some meetings with prospective clients, partners and employees. All in all, a great trip and met some great people.

 Those that know me personally know that I pretty much don’t like to travel. For a decade I didn’t enter an airplane without a parachute and we sure didn’t wait in security lines to board a C-130 en route to a no-named drop zone.  So commercial travel and I don’t mix well. 

So it is with this dread/ loathing of travel that I headed off to DFW airport on my way to SFO. And, because I hate travel, my flight was delayed. Which happens to me EVERY time I fly.  It always amazes me that a squall in Seattle or snow in Sioux City can somehow make my plane late in sunny Dallas. 

So I hunkered down, fired up the laptop, plugged in the iPhone and got to work.  After about 3o minutes, I heard the sound of applause from five gates down.  My first assumption was that a plane had just landed with troops returning from Iraq.  Being a veteran myself, and because I love any man or woman who wears the uniform of our country, I packed up my stuff and decided to wander down to the commotion and thank a vet.

As I got closer, I noticed an ad-hoc crowd gathering with passengers and airline employees alike moving toward the center of commotion. I realized that this was not a “returning troops” scenario. Those are quite organized  and well attended. This crowd had the makings of a mob that is slowly awakened and becoming interested in an “unusual sight”.  As each person drew close enough to see what was causing the excitement, they broke into applause, giving the applause a “ripple effect”.  I began clapping, not even sure why, but knowing something special was happening.

There was a group of the golf carts that are used to transport the elderly and infirmed in the middle of the walkway. And there were signs on the carts, but I couldn’t make them out. So I inched closer.

My first vision of what had drawn everyones attention was at once perplexing, then almost immediately, so very obvious to me. I noticed a small, stoop-shouldered black man with a cane.  Around him, poised like body-guards, were what I assumed to be his children, grandchildren and even great grand children. The man, who was 80 if he was a day, stood there with his body slightly bowed, but with his chin and head held high with pride.  It was  humility, and shy pride displayed in a single body posture.  There was pride in the eyes of the family too. 

The man was well dressed. With a baseball type cap and a jacket. On the hat and the jacket were the things that identified who this man was and what he had accomplished in his life. His cap merely said, ” Tuskegee Airman“.  Enough said.  His jacket bore the “militaria” of the places that he had been and things he had done.  It wasnt just one Tuskegee Airman, it was a couple of them, which is phenomenal considering there are so few of these heros left. 

But the story gets better. Around these heros was a group of similarly aged white ladies.  All looked to be in their 70s and 80s,several needed some help walking and ALL looking as beautiful as they did 60 years ago. These ladies were WASPs (Women Airforce Service Pilots). These unsung heros of WWII flew fighter planes to the front  for the men to take into battle. Thirty-eight WASP died serving our nation.  These brave women were not considered military and did not receive those benefits until 1977 when the President signed legislation granting them full military status and the medals and recognition that they were due.

There are only a couple hundred of these ladies left. They are every bit the hero as their male counterparts yet received none of the same accolades. 

As an amateur student of US History, a veteran, the son and grandson of veterans, I was in US history heaven. My otherwise crappy travel day was made almost perfect because I got to shake hands with and hug these great American icons. There is no real way to know at what rate we are losing our WW II veterans. Some reports say it is 1,700 a day. The census uses a formula that shows it to be closer to 1,000. A decade ago, there were 5M veterans of WWII left (out of 16M) today that number is believed to be at or below 2M. 

Seek out a WW II veteran, they are fascinating.  They are a true national treasure that wont be here in a decade.  My trip to San Francisco was fine because the whole time I was smiling to myself at the thought of those proud beautiful grandmothers and those brave grandfathers that were trailblazers long before Civil/ Womens Rights movements reached the mainstream.  Thank you sirs, thank you ma’ams, when my children and grandchildren read their history books, I will point at the picture of the WASP or Tuskegee Airmen and tell them,  “I met them. A long time ago I actually shook hands with them.”

In way of a post-script, I have since learned that those wonderful ladies were on thier way to Washington to recieve the Congressional Gold Medal from Congressional leaders.

You want SAS 70 Type II with that? (Do buyers really want wholesale data center space?)

The subject de jour is: Wholesale data centers.  Now I, for one, have been very pleased to see the marketplace stratify into a “wholesale-retail” type of environment.  As a “retailer” of data center-centric services, it is valuable to me to have the industry define the differences so that the buyer understands the value of each model.  For the longest time (almost two years….which is a lifetime in this business) we have seen two types of requirements:

1. Wholesale buyer. Typically buys by the kilowatt or megawatt of power. They typically buy 1 megawatt or more of power. He/she has their own staff. They “don’t need your help”. The preferred contracting instrument is a long-term lease.

2. Retail buyer. Smaller footprints. Typically pay by the foot and whipped power. The have some staff but need some help.  The preferred contracting instrument is the Master Services Agreement.

This model made the world fairly simple to navigate. Everyone knew what they were and what they wanted.

But over the last few months I have noticed that the end-user buyer is starting to blur the lines. And not just a little bit. I just finished reading an RFP that CLEARLY says it is wholesale, but the client is CLEARLY describing co-location (and in some cases managed) services. 

So this leads one to ask, “why do people want wholesale data center space?”. 

I have read three large RFPs in the last month (all of which were household names) in which the following was required:

-Wholesale pricing

-Price per whip install and whip types

-Cross-connects and costs

-Helping hands

-SAS 70 Type II

-Three to five-year “lease” term

-SLAs

Ok read those again.  That ain’t wholesale.  That’s colo all the way.  Now most readers here know exactly what RFPs I am talking about. So the big question is: why do they insist on wholesale?  Since wholesalers don’t give you a SAS 70 Type II; since wholesalers don’t typically manage your telecom; because wholesalers dont typically like to do leases less than 7 years; since the protections (for the client) of the wholesale lease are not as good as a retail MSA, I can only come to one conclusion:

The reason these buyers are seeking wholesale is: price.  The implication in the market place is that you can get cheaper rent from the wholesaler.

Another reason could be the desire for metered power, but now most retailers will do that too. As a matter of fact we have created three “consumption-based” models that are better than the wholesalers traditional metered power models.

I have floated this theory to many folks across the country and there is much agreement.  So how come the broker or consultant isn’t telling his client he really wants colo at wholesale prices.  And really, that is what they want. Colo services at wholesale prices. A hybrid.

So here at Horizon we are taking our hybrid to the street. Our DC Flexspace offering actually offers pricing models for space, power, bandwidth and services that actually mirror the growth patterns and business drivers of our clients. Hybrid. Every time. 

My conclusion, the customer WANTS IT ALL. He wants brand-new data centers, he wants on-demand services, he wants to pay for consumption not extra, he wants an audit and he wants it all for a wholesale price.  He wants, “wholo”.  And guess what…

The retailer is more able to offer the client “Wholo” than the wholesaler is able to…..game on.

I wanna be Larry – “What the hell is Cloud Computing?”

Man oh man did I think that I was a smart guy.  The week that the Fed announces its Cloud strategy, we issue a press release announcing our Cloud solution. Coincidence? I think not! Brilliant and genius marketing strategy? Of course!  But not according to Larry…..

As we waded into the Cloud pond, we just couldn’t nail down a solid definition of what the Cloud was…so how could we market and sell it?  We asked our  hardware vendors, our software vendors, we read trade rags, we took an internal poll….no two answers were the same.  I started to think that “Cloud” was like “aloha”…it sort of means whatever you want it to mean at that point in time.

Its basic marketing 101:  if I cant define it, I cant sell it.  So we all but gave up. But you have to be in the game, so we plodded on.  We finally settled on OUR definition and launched our product and followed with a  press release! Horizon was in the Cloud business!  Man it felt GREAT to be on “the cutting edge” “the tip of the spear”  “the…eh” you get it. 

And then the worse thing that could happen, happened. Larry (for you folks outside of the technology world or those of you still read print newspapers, “Larry” is Larry Ellison, CEO of Oracle. Sort of like Pele, guys like Larry, Bill, John, and Michael are known by a single moniker.  Sort of like the Beatles of technology) poo poo’d the Cloud. Holy batcrap Batman, Larry makes fun of the Cloud (have a listen)! Larry says that the Cloud is” just doing more of what we have been doing”! WHAT! Are you telling me I based a whole product development and marketing cycle on a FAD? Oh man am I going to get  fired.  Larry said I am “full of crap” and “insane”…

I was worried for a few days…I hoped my friends, company, boss, investors dont find out that we put together a product and marketing story around something that Larry makes fun of.  Not good.

I had one last hope.  I needed the Federal government to validate the Cloud (and me). Only THE FED is bigger than LARRY.  Come on Uncle Sam..once again my fate is in your hands…don’t let me down.

So yesterday, I watch with bated breath for the announcement (as reported by Rich Miller at DCK) from none other than the US CIO Vivek Kundra.  Was my definition of Cloud going to validated? Would Horizon’s Cloud future go the way of Larry’s fad or were we in sync with Uncle Sam. 

VINDICATION.  Looks like the Fed and Horizon share EXACTLY the same definition of the Cloud!!! Perfect. Take that Larry!  It’s true, I AM A GENIUS!! 

Well not really. In the absence of finding a cohesive definition of the Cloud, we went to the largest buyer of IT in the world. The Fed.  Seems they have been defining the Cloud for some time. Our friends at NIST have given the Cloud tons of thought. (I have all of their presentations). In the absence of standardization, Horizon went to the mother ship of standardization…The Fed. We built our solution to the NIST definition.

And you know Larry might be right, we (including  The Fed) might be wrong. Its just marketing hype for what we have been doing all along. But you know what Vivek Kundra said? He said that this is the definition of Cloud Computing…wait for it…..from the “BUYER PERSPECTIVE”.  Get it.  It is STILL about the buyer.  We dont develop solutions that make us happy, we develop based on the “buyer perspective”.  How novel.

And Larry is wrong. It’s not the same. The Fed is getting out of the infrastructure business. And that opens a lot of doors. The Fed getting out of the infrastructure business is opening so many more security issues that have ever been envisioned (just read the Cloud Security Alliance on LinkedIn if you dont believe me) this in and of itself will create work for all of us.

This is exciting, we are using some of the same gear, same software, but we are delivering it a pretty cool fashion. And you know what? This old grunt is glad to serve my country once again. If The Fed can save MY tax dollars and reduce their carbon footprint because my competitors and I are delivering something cool…I sleep peacefully at night.

So. Why would I want to be Larry? How cool would it be, to be so rich, so powerful, so bulletproof, that you can make fun of technology initiatives that everyone else is embracing?

Data center marketing hype – what’s real and what isn’t

Like most data center and managed services providers we invest in what I call the marketing speciality of “google marketing”. We even have a guy that I like to call “googlehead” (for all the time he spends on those crazy analytics).  One of the big decisions that we had to come up with was, “what key words to use and what should our one-line ads say”. The one-line (or two-line) ads are those ads that come up above or on the right of your “organic” search results. They are paid slots that are intended to get you noticed quicker than your competition. We were very careful with those little ads. Spent way too much time choosingthe right words that would get us noticed. Our biggest concern was accuracy. We sure didn’t want to lure anyone in with false advertising only to have them leave angry. So word choice is terribly important.

Or so I thought.

For sport (like many marketing guys) I Google ourselves or our key words occasionially to make sure that our “googlehead” is doing his job. So imagine my suprise when I Google our company and see the following message on the right-hand side bar:

“Only 2N provider in the region”   WOW. Now that is a catchy one-line ad. In the marketing world being “THE ONLY” of anything is awesome. But “only” is a big marketing word that you have to be careful with. ONLY? Really?

So for those that don’t know, the “2N provider” is referring to a data center provider. 2N, is essentially, two complete fully-redundant systems. So in this one line ad, by claiming to be the “only”, this provider is leaving unsaid the antithesis of “only”, implying that no one else has 2N “in the region”. WOW. No one else has 2N?  Not EDS, Perot, CSC, ACS, Sungard, Savvis, att? WOW. I think I would want to buy from these guys. For sure.

After all, they are the ONLY 2N provider in the region! 

We had to combat this. I gathered my marketing team, we brainstormed, whiteboarded, mindmapped, group-thinked and here is what we came up with:  we just changed our one-line ads to read “2N”. BUT WE LEFT OUT THE WORD “ONLY”. Mainly because, while we have 2N components in our datacenter, we are niether bold enough or arrogant enough to lie to the marketplace.

Garage Sales, Data Centers and the meaning of life.

So a few families on the street decided that since our North Texas temperatures had hit 100 degrees, that now was the perfect time for a garage sale/ yard sale (whatever you want to call it). Apparently we don’t do these in the winter. I look forward to yard sales about as much as I look forward to a visit with the proctologist. Days before hand I grumble, complain and gripe. But on the morning of the sale, I am a workhorse. Moving things from the garage and attic to the front yard where strangers will most likely thumb their noses at things that my family once considered important (and now are garbage) and somehow taking offense when only offered $50 for a $300 set of Ping irons. 

Once set up, my work is done until its time to load up the left-overs and head to Goodwill. So I pull up a chair, grab a cold drink and marvel at the flow of strange human characters that rifle through my junk. Garage/ yard sales become a time of great refection: why was this item or that item so important, why am I offended when they “low-ball” something that I have not set eyes on in years?  Why would someone buy this item or that “used” when you can get “new” so cheap at Wal-Mart or Target?

Its after this last thought that my mind naturally begins to wander (could be heat exhaustion) about why some people buy “new” and some buy “used”. Is “used” as good as “new”? How come my wife and I don’t go to other garage sales and buy “used”?

These thoughts, then lead my to thinking about data centers (which is what you do when you are a co-founder of a data center company). I think about data centes all the time. Almost to an unhealthy level. Then I ask myself a big question:

Why do some data center operators buy used data center equipment? How come we  don’t? Is a used CRAC unit or UPS really as good as “new”?  Do enterprises like to put their critical gear in data centers with refurbed generators? Slight worn PDUs? Really?  I have never seen an RFP that says, “used CRAHs are perfectly acceptable”.  As a purveyor of brand-new data centers built by REITs, I am not sure how one goes about buying used data center batteries. Is there a big yard sale? Seriously.

I buy used cars so I do see some logic in buying “used” but you know what? My used car is still “used”. I really only know what the dealer tells me about the history of the vehicle. I don’t really know for sure. Is it the same with used data center gear? You just have to take the dealers word for it? 

We lose deals occasionally to data centers that purportedly built their data centers with used gear. How do I counter that? My generators came of  the factory assembly line, and have impeccable maintenance records and know everything that has ever been done to them. Do the other guys  know? As the marketing guy, how do I sell against this? Put out a sign? Run an add?  I think the only real answer is that the enterprise buyer has to ask. Just ask the providers you are looking at: how old is this gear? Did you buy it new? Can you GUARANTEE the maintenance records are accurate?  Do they still make parts for the gear? 

Well, I am pretty certain I wont figure it out, just like I wont figure out why a guy gave me $5 for a 15 year old pair of jungle boots. But I do think about it.

So Mr. Enterprise data center buyer, I have this wisdom for you: no matter how clean and new those jungle boots look, I still had my feet in them and walked through Central American swamps and monkey poop in them. They are “used”.

Would someone please tell me what a data center is?

Since our last press release (last week) in which we spell out our growth plans, you would be amazed at the number of calls I get from folks with “data centers” for sale all over the country. More times than not I get this comment, “We can build it out however you want….”  Maybe I am an idiot, but isn’t a data center, by definition, “built out”? 

In my mind, a data center is cold-air, raised floor, redundant power chains and big fat telecom pipes. Right? But maybe I’m wrong (it does happen) so I decided to wander around “outside the wire” and see how the industry defines a data center.    First off my unofficial, unscientific research boggled my mind. Did you know that CoreSite has over 1,000,000 square feet of data center?! CoreSite, the artist formerly known as CRG West, tells us that they have over a quarter of a million ft of data center in Boston alone! Damn, that is a lot of cold air.

I have a competitor here in Texas that according to what I read in thier press releases has almost half-a-million square feet of data center!!

Then there are the brokers: ” Underground data center space available, 2,000,000 feet”, “300 watts per square foot data center”, “data center available, build to suit”.  For petes sake, we don’t have a data center shortage, there appears to be tons of it out there.

I decided to see what my wholesale data center partner (Digital Realty Trust) had to say about “data centers”. Digital has Turn-key data center. I KNOW what this is…its what we use. Digital Realty has a product called a “power based building“.  That’s funny, they don’t call them data centers, they call them shells. Wonder why they differentiate? Maybe because they know there is a difference between a shell that COULD be a data center and a data center.

How about DuPont Fabros. What do they call a data center? Their website tells me that ACC5 is a 360,000 square foot building with 176,000 square feet of raised floor? Wonder why they differentiate? Wonder why they differentiate? Maybe because they know there is a difference between a shell that COULD be a data center and a data center.

Or maybe its because Digital and DuPont are publicly traded and have to tell the truth? Maybe?

So my competitors have one definition, my wholesale partners have another definition. I wonder how Tier 1 Research would define a data center? Maybe we  can ask those guys to write an industry accepted definition?  I did read a nice paper from IDC in which they define five types of data center. Know what five types have in common? They all have cold-air and some sort of backup power chain.

So here is my definition of a data center: a place where servers go that has really cold  air and lots of redundant power.

Here is my definition of what a data center is not: a shell building, or shell space in a large building that might have a data center in it.

OR….we could just say that Horizon Data Center Solutions has over 200,000 feet of data center (the gross size of our two buildings!)

 Wow. Makes me feel ….small. I mean 37,500 square feet is ….small by these standards. This requires more investigation.

iPhone is VooDoo

Well I made the leap. I now have an iPhone. I will admit it…I don’t understand it. It is black magic and voo doo all rolled into one. How did I live without this mircale? I can acutally see a website and view a document! Blackberry? Cya! Windows Mobile? Buhbye!  So what does  this have to do with the data center business? Not a damn thing. But it is so cool it is bound to make me more productive!  But imagine my suprise that one day into an iPhone I read on the iPhone Blog that Charlie Miller is going to hack the new iPhone at the Black Hat conference.  Damn. But the “good” news is that apparently you can hack the Windows Mobile phone I just ditched. Guess I dont really care.

Pass the headcount up

Ok, I am moving outside the wire. Headcount of 1. I am heading out alone. The comments that you read here are mine. Just mine. They don’t reflect the views of anyone but me. My sights are set on rummaging through the mire that technology has become. This mission will not involve taking prisoners. I will engage as I see fit and most often, will engage with suprise and violence of action. Blogs! Finally a way for the closet critic to have a voice!