Choosing a Co-Location Facility

Edgio is the result of the merger between Limelight Networks and EdgeCast in 2022, which produced a company with over 20 years of experience choosing and installing their own equipment into co-location facilities.

With customers like Disney, ESPN, Amazon, and Verizon, Edgio has had to manage both explosive growth and exceptionally high expectations.

So, there’s no better source to help you learn to choose a co-location provider than Kyle Faber, Head of CDN Product Delivery Management at Edgio. He’s got experience, and as you’ll see below, the pictures to prove it.

Kyle starts with a description of the math involved in deciding whether co-location is the right direction for your organization, and then works though must-have and nice-to-have co-location features. He covers the value of certifications, the importance of redundancy and temperature management, explores connectivity, support, and cost considerations, and finishes with a look at sustainability. It’s a deep and comprehensive look at choosing a co-location provider and information that anyone facing this decision will find invaluable.

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NAVIGATE THE COMPLEXITIES OF PRIVATE COLOCATION DECISIONS

Kyle started by addressing the considerations video engineers should prioritize when contemplating the shift to private co-location. In the context of modern public cloud computing platforms, he asserted that the decision to opt for private colocation requires a higher level of scrutiny due to the advanced capabilities of cloud offerings. While some enterprises rely solely on public cloud solutions for their production stack, there are compelling reasons to explore private colocation options.

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He outlined his talk as follows:

  • First, he detailed a methodology for considering your financial break-even.
  • Then, he identified the “must have” features that a co-location provider must offer.
  • Then he related the nice-to-have, but not essential features that are potentially negotiable based on your organization’s goals.
  • He concluded with insight into how to balance the cloud vs. co-location decision, sharing that “it’s not a zero-sum game.”

As you’ll see, throughout the talk, Kyle provided practical insights to help video engineers navigate the complexities of private colocation decisions. He emphasized understanding the factors influencing these choices and making informed decisions based on an organization’s unique circumstances.

UNDERSTANDING THE MATH AND BREAKEVEN PRINCIPLES

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Kyle started the economic discussion with the concept of the economics of minimum load and its relevance to private co-location decisions for video engineers. Using an everyday analogy, Kyle drew parallels between choosing to buy a car for daily use versus opting for ride-sharing services. He noted that the expenses associated with car ownership accumulate rapidly, but they eventually stabilize.

The convenience of controlling usage and trip frequency often leads to a reduced cost per ride compared to ride-sharing services over time. This analogy illustrated the dynamics of yearly co-location contracts, where minimum load drives efficiencies and potential gains.

Kyle then shifted to a scenario involving short-term heavy needs, like vacation car rentals. He noted that car rentals offer flexibility for unpredictable schedules without the commitment of ownership. This aligns with the flexibility provided by bare metal service providers, who offer diverse options within predefined parameters. This approach maintains efficiency while operating within certain boundaries.

Concluding his analogy, Kyle compared on-demand and public cloud offerings to ride-sharing services. He emphasized their ease of access, requiring just a few clicks to summon a driver or server, without concerns regarding operational aspects like insurance, maintenance, and updates.

By illustrating these relatable scenarios, Kyle underscored the importance of understanding the economics of minimum load in the context of private co-location decisions, specifically catering to the considerations of video engineers.

NAVIGATE THE ECONOMICS OF MINIMUM LOAD

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Kyle next elaborated on the strategic approach required to navigate the economics of minimum load in the context of private co-location decisions. He emphasized the significance of aligning different models with specific data center demands.

Drawing from personal experiences, Kyle illustrated the concept using relatable scenarios. He contrasted his friend’s experience of living near a rail line in Seattle, which made car ownership unnecessary, with his own situation in Scottsdale, Arizona, where car ownership was essential due to logistical challenges.

Translating this to the business realm, Kyle pointed out that various companies have unique server requirements. Some prioritize flexible load management over specialized hardware needs and prefer to maintain a lean staff without extensive server administration roles. For Edgio, a content delivery network, private co-location globally was the optimal choice to meet their specific requirements.

Kyle then began a cost analysis, acknowledging that while the upfront cost of private co-location might seem daunting compared to public cloud prices, the cumulative server hour costs can accumulate rapidly. He referenced AWS’s substantial revenue from convenience as an example. He highlighted the necessity of considering hidden costs, including human capital requirements and logistical factors.

Addressing executive leaders, Kyle cautioned against assuming that software developers skilled with code are also adept at running data centers. He emphasized the importance of having dedicated data center and server administration experts to maximize cost savings and avoid potential disasters.

Looking toward the future, Kyle advised mid-sized companies to consider their future needs and focus on maintaining nimbleness. He shared his insights into the challenges of hardware logistics and the value of proper tracking and clarity to identify breakeven points. In this comprehensive overview, Kyle provided practical insights into the economics of minimum load, offering a pragmatic perspective on private co-location decisions for video engineers.

MUST-HAVE CO-LOCATION FEATURES

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With the economics covered, Kyle shifted to identifying the must-have features in any co-location service, suggesting that certifications play a crucial role in evaluating co-location providers. ISO 9,000 and SOC 2, types one and two, were cited as common minimum standards, with additional regional and industry-specific variations. Kyle recommended requesting certifications from potential vendors and conducting thorough research to understand the significance of these certifications.

Kyle explained that by obtaining certifications, you can move beyond basic questions about construction methods, power backup systems, and operational standards. Instead, you can focus on more nuanced inquiries, like power sources, security standards for visitors, and the training and responsiveness of remote hands teams. This transition allows for a more informed assessment of vendors’ capabilities and suitability for specific needs.

THE SIGNIFICANCE OF ON-SITE VISITS

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Kyle underscored the significance of on-site visits in the colocation decision-making process, sharing three images that highlighted the insights gained from physical visits to data center facilities. The first image depicted service cabling that entered a data center. While the front of the building seemed pristine, the back revealed potential issues lurking in the shadows. Kyle stressed that some problems can only be identified through close inspection.

The second image showed a fiber distribution panel, showcasing the low level of professionalism evident in the data center’s installations. This reinforced the idea that visual assessments can reveal the quality of a facility’s infrastructure.

The third image illustrated a unique scenario. During construction, a new fiber channel was being laid, but the basement entry of the fiber trench was left unsealed. An overnight rainstorm resulted in the trench filling with water. Because the basement access hole was uncapped, water flowed downhill into a room with valuable equipment. This real-life example served as a reminder of the importance of thorough inspection and due diligence in the colocation industry.

These visuals underscore the importance of physically visiting data centers to identify potential challenges and make informed decisions.

AND TEMPERATURE MANAGEMENT

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Kyle also shared that  temperature management is particularly important to data centers. For example, Edgio emphasizes cooling speed, temperature regulation, and high-density heat rejection technology. It’s not merely about achieving lower temperatures; it’s about effectively managing and dissipating heat.

Kyle explained that even a slight temperature fluctuation can trigger far-reaching consequences, so maintaining a precise temperature of 76 degrees Fahrenheit is paramount. The utilization of advanced heat rejection technology ensures that any deviations from this optimal point can be promptly corrected, guaranteeing peak performance for their installations.

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Paradoxically, economic success complicates temperature maintenance. Over the past eight years, Kyle reported that Edgio achieved a 30% improvement in server power efficiency, coupled with a 760% surge in server density metrics. However, since the laws of physics remain steadfast, this density surge brings with it an elevated heat generation within a smaller space.

CONNECTIVITY, SUPPORT, AND COST CONSIDERATIONS

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Kyle’s discussion then shifted to connectivity, sustainability, and environmental considerations with a focus on where to place each factor in your decision-making scorecard.

Emphasizing the critical role of connectivity in businesses, Kyle noted that vendors often claim constant uptime and availability, and usually deliver this, so they differentiate themselves through their access to the wider internet. When choosing a co-location provider, all organizations should reflect on their unique requirements. For instance, he suggests that businesses intending to connect with a CDN like Edgio might require a local data center partner that facilitates data transformation and transcoding but might not need the extensive infrastructure for global data distribution.

Kyle then addressed the significance of remote support, especially during initial installations where a swift response to issues is crucial. While tools like iDRAC and remote Out-of-Band server access provide control, Kyle highlighted the importance of real-time assistance during other critical moments, such as identifying server issues.

Addressing costs, Kyle acknowledges its pivotal role in decision-making, a sentiment particularly relevant given the current technology landscape. Kyle urges a balance between cost-effectiveness and quality, drawing parallels between daily personal choices and those made in professional spheres. He references Terry Pratchett’s boot theory of economics, emphasizing the inevitability of change and the need for proactive lifecycle management. “Even the best boots will not last forever,” Kyle paraphrased, “and you need to plan lifecycle management.”

A FEW WORDS ABOUT SUSTAINABILITY

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Kyle urged all participants and readers to consider sustainability, transcending its status as a mere buzzword. “Sustainability is more than a buzzword,” he declared, “It is a commitment.”

He illuminated the staggering energy appetite of data centers, exemplified by Amazon’s permits for generators in Virginia, capable of producing a remarkable 4.6 gigawatts of backup power – enough to illuminate New York City for a day. Kyle underscored the industry’s responsibility to reevaluate energy sources, citing the rising importance of Environmental Social Governance (ESG) movements. He emphasized that organizations are now compelled to report their environmental impact to stakeholders and investors, emphasizing transparency.

When considering colocation facilities, Kyle recommended evaluating their sustainability reports, which reveal critical information from energy-sourcing practices to governance approaches. By aligning operational needs with global responsibilities, businesses can make conscientious choices that resonate with their core values and forge meaningful partnerships with data center providers.

GET INTIMATELY ACQUAINTED WITH THE UNPREDICTABLE

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While you should perform a comprehensive needs analysis and service comparison to choose your provider, Kyle also highlighted that data centers are intimately acquainted with the unpredictable. Construction activities, often beyond the data center provider’s control, persistently surround these facilities.

The photo above, taken a mile away from a facility, exemplifies the unforeseen challenges. A construction crew, possibly misinformed or negligent, drove an auger into the ground at an incorrect location, inadvertently ensnaring cabling, and yanking dozens of meters of fiber from the earth.

The incident’s specifics remain unclear, yet the lesson is evident – despite meticulous planning, unpredictability is an integral facet of this landscape. As Kyle summarized, “It’s a stark reminder that despite our best plans, unpredictability has to be part of this landscape, so always be prepared for the unexpected.”

NO ONE-SIZE-FITS-ALL SOLUTION

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In closing, Kyle addressed the intricate decisions surrounding ownership, rental, and on-demand data center services, emphasizing that there’s no one-size-fits-all solution. He presents the choice between owning servers, renting them, or opting for on-demand cloud services as a complex tapestry woven with factors such as the unique average minimum load and an organization’s strategic objectives.

Kyle cautioned that navigating this intricate landscape demands a nuanced perspective. The decision requires a well-thought-out plan that not only accommodates an organization’s goals and growth but also anticipates the evolving trends of the industry. This approach ensures that the chosen path resonates seamlessly with an organization’s aspirations, offering stability for the journey ahead.

GO FROM A PURE OPEX MODEL TO A CAPEX MODEL

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Before wrapping up, Kyle answered one question from the audience, “ How does someone begin to approach a transition? Is it even possible to go from a pure OPEX model to a CAPEX model? Any suggestions, ideas, insights?”

Kyle noted that when you assess an OPEX model, you’re essentially looking at linear costs. These costs offer a clear breakdown of your system expenses, which can be projected into the future.

While there might be some pricing fluctuations as public cloud providers compete, you can treat entire segments as a transition unit. It might not be feasible to buy just one server and place it in isolation, but you can transition comprehensive sections in one concerted effort.

So, you might build a small encoding farm, allowing for a gradual shift while maintaining flexibility across various cloud instances like AWS, Azure, or GCP. This phased approach grants greater control, cost benefits, and a smoother transition into the new paradigm.

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