At the end of May, I’m speaking on a panel at IMN’s Data Center East Conference in New York City. The panel is titled “Staying Ahead of the Curve on Services (for data center operators)” and will focus its message on market demand for managed services that deliver high value for colocation and cloud computing users.

Mike Klein
Online Tech
Co-CEO

I define high value as an essential service that a service provider can deliver at a lower cost and with higher quality than their clients can build or buy on their own. For example, many colocation providers offer “rack & stack” service to rack and wire servers in colocation racks. “Rack & stack” is a good example of a “win-win” service. It is typically far more cost effective for the full-time staff at the data center to rack and wire new servers in the rack than for a client to drive to the data center to do it themselves.

“Rack & stack” services give both the service provider and the client a “win.”  The service provider uses their full-time staff that has expertise wiring thousands of servers with a process and documentation that delivers a high quality experience.  The service provider can deliver the service profitably and more cost effectively compared to their clients’ staff time and travel costs to and from the data center.

It’s much like when I hire a plumber. I may be able to do the work myself, but when I consider the cost of my time and the quality of my own plumbing work, it’s a higher value – and safer – to have the job done correctly and quickly by a professional. (My wife would agree that hiring a plumber is “win-win” for our household.)

From our experience, two of the highest value managed services a data center operator can provide are backup and managed security services.  I’ll talk about security services in a future blog post – for now, let’s discuss enterprise backup and recovery services for colocation and cloud computing.

The single highest uptake of all of the services we offer at Online Tech is our managed backup offering. I use it as an example of a high value managed service that data center operators can use to deliver a strong value to their clients with a good return on their investment in people, tools and processes – a true “win-win” service in my book.

There are a number of ways to deliver backup services. Some providers offer unmanaged backup – with a local or offsite storage target where the client loads and manages the backup software. For clients willing to take on the burden of managing their own backups, this DIY option provides the ultimate in flexibility because the client can select the backup software, schedule, network bandwidth and the amount of storage they need.

Another popular approach used by many of the commodity cloud providers is daily snapshots. This is typically a local copy of the entire virtual cloud server as a file that a client can fall back on if they lose their server. While cheap to deploy and easy to offer, our experience is that many clients shy away from this approach because:

  1. they prefer to have their data offsite to protect the data in case of a disaster at the production data center; and;
  2. the work it takes to restore a single file makes it impractical to do file-level restoration – you can only restore the entire snapshot of the whole server.

Contrary to popular belief that backups are primarily used to recover from major incidents or total loss of data, 95 percent of the time our clients use their backup to recover a single lost or corrupted file. Less than 5 percent of the time backups are actually used for a total system recovery. We’ve seen file level restoration to one of the highest demand use cases for backup services.

At Online Tech, we decided to offer a full service offsite backup product that:

  • supports file level restoration.
  • backs up offsite to a geographically disperse data center.
  • supports daily backup for severs with 10 TB+ of data.
  • encrypts all backup traffic and data at rest.
  • offers clients their choice of backup windows to run in their low work periods.

The technology investment to deliver these capabilities in this service was significant. We use EMC Avamar technology – essentially leveraging an enterprise-grade backup architecture – to deliver a full service product experience to our mid-market client base.

Obviously, the decisions of which managed services and feature sets to offer varies – and frankly depends on the service provider’s business model. In our case, we choose to deliver a full service, fully encrypted backup service for the mid-market client base we serve, many of which are in regulated industries where compliance & data security are paramount.

One point I’ll contribute to the panel at IMN is that there are a number of services that colocation and cloud computing providers can offer that deliver high value to their clients from a win-win perspective – a profitable service that can be delivered more cost effectively than clients can do it themselves. Backup is a great example of this type of service, which in our experience has a high uptake because of the value it delivers to clients. The mix of features and capabilities of these services depends on the market and type of clients that the service provider is targeting.

… and that’s where the differentiation and fun starts for those of us in the colocation and cloud computing business.


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Resources:

IMN’s Spring Forum