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Data center outsourcing management: A closer look at IaaS and DCaaS

Modern organizations are increasingly reluctant to commit in-house resources to business computing. The underlying issue may be inadequate staffing or inexperience with deploying or supporting new computing resources. The data center may have also reached practical limits of power, cooling and space, making further expansion impractical. Or perhaps changing business strategies favor IT outsourcing management as a means of shifting capital expenses to operational expenses.

Regardless of the driving forces, an organization has numerous outsourcing management alternatives available. The two most popular alternatives are Infrastructure as a Service (IaaS) and Data Center as a Service (DCaaS), sometimes dubbed "colocation providers." Both alternatives serve unique niches and present distinct tradeoffs that businesses should understand before engaging an IT outsourcing provider.

IaaS vs. DCaaS
To appreciate the tradeoffs involved with IaaS and DCaaS, it's important to understand what each offering provides. DCaaS is fundamentally the same as a colocation provider – a third-party business provides a raw facility with space, power, cooling and (perhaps) some rack space. A client would then lease some portion of that space, and then provide the servers, switches and other hardware needed to implement the new location. Often, the DCaaS provider will assist the client in customizing the space to accommodate unique needs, such as 10 Gigabit Ethernet fiber connectivity, high-density

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cooling or other resources.

"You look at the SLA [service-level agreement], the HVAC technology [and] the power outage history, but there's also the design and build function that needs to be checked," said Pete Sclafani, chief information officer and co-founder of 6connect Inc.

Just because a data center facility looks modern, it must still provide the networking and other underlying infrastructure that meets your needs. Sclafani urges prospective clients to ask questions and verify that the resources they care about are readily available to them in the DCaaS facility.

By comparison, IaaS facilities already provide all of the servers, storage and other networking hardware, and clients are merely leasing a portion of those provider's computing resources to run applications or workloads. In addition, an IaaS provider may offer a comprehensive menu of value-added services for the client, such as monitoring, reporting and so on. While a DCaaS client is primarily concerned with the provider's facility, an IaaS client is mainly worried about the computing resources that the IaaS provider is delivering.

Although the differences between IaaS and DCaaS may seem minor at first glance, the paradigms result in unique tradeoffs that a client should consider carefully before selecting either outsourcing alternatives. The principal advantage of DCaaS is a level of "ownership" and customization – a client uses their own hardware, and the provider can customize the space to meet that client's unique needs. The space can also be constructed with sensors and controls that allow the client to monitor and react to changes in the computing environment. For example, a temperature alarm in one virtual server host can allow the client to decide when and where to failover the workloads and schedule service on the troubled server. When the provider and client work together to identify those needs from the start, the result can be quite effective. Overlooking those needs, however, can lead to client problems and dissatisfaction with the provider.

The challenge here is for the prospective client to ask the right questions, understand their needs and communicate effectively to the DCaaS provider. Sclafani recounted an example of a DCaaS client that underestimated the cooling load of their blade architecture. This created intense hot spots that the DCaaS provider did not know during the design and build phase.

"When they built it out, they used a certain average [cooling] without taking really intense hot spots into account," Sclafani said. "The customer ended up having to space out those servers to accommodate the facility, versus being able to use their initial rack layouts."

The situation is different for IaaS, where the provider deploys and maintains all of the computing resources. Clients don't need to buy, deploy or maintain the infrastructure, and resources can easily be adjusted by doing little more than selecting from a menu of available options. This provides significantly more agility and automation for clients. This approach works well when it is more important to focus on running workloads rather than installing hardware, but there is a distinct loss of control over the computing environment that may disturb some clients.

"They have an SLA with me, and it's their butt on the line, so they're not going to hand over the keys to me," Sclafani said. "They say ‘We're the chauffeur, you stay in the back seat.' "

As an example, in your own facility, you could manage the HVAC and try higher inlet temperatures. You can do neither when working with an IaaS provider (without violating your SLA).

It's important to note that there can also be a difference between DCaaS and colocation providers. A colocation provider may be leasing space from a larger facility. While this allows some colocation providers to cater to smaller businesses, the provider may not be able to guarantee the SLA they are offering you, because the actual SLA is limited by the agreement between the colocation tenant and the building's landlord. For example, it's impossible for a colocation provider to offer clients five nines, or 99.999%, of uptime when the building owner is only guaranteeing four nines of uptime to the colocation tenant. The point, said Sclafani, is to know your provider and ensure that they are able to meet the SLA they're offering.

Outsourcing management considerations and choices
Understanding the subtle but important differences between IaaS and DCaaS is just the beginning. The real issue is deciding which IT outsourcing management strategy is best for your particular situation. In most cases, opting for DCaaS is cheaper, easier and faster than attempting your own data center builds, especially when dealing with facilities in multiple locations. The customization available with DCaaS deployments also allows clients to define the role of each facility. For example, one DCaaS facility may be built out for disaster recovery, while another location may be tailored as a primary site, and so on. However, a client will need some level of data center expertise to make best use of a DCaaS (or even a colocation) provider.

The benefits of DCaaS are completely absent from IaaS facilities, where you basically have no alternative except to use the servers, networking and other hardware supplied by the IaaS provider. This can actually be an advantage -- good IaaS providers will host gear in multiple locations, allowing you to choose gear that is "first available" or pursue markets in particular locations. And there are other benefits to IaaS, including relatively low financial commitments, so there is no equipment to buy and long-term leases to sign; just start using the services and pay for what you use.

In most cases, the IaaS provider supplies the latest equipment for best performance. "You're not using [just a bunch of disks] that are five years old. You'll typically be on a really nice full-featured [storage area network] with redundant controllers – stuff that would cost you hundreds of thousands of dollars to procure yourself," Sclafani said. "But you get it for pennies on that dollar because you're able to leverage it as an operating expense."

Clients that prefer to focus on workloads rather than data center hardware can get tremendous value from IaaS providers.

When weighing the choice between IaaS and DCaaS, remember to consider the availability of support. DCaaS deployments typically offer little more than facilities support (power and cooling), but take time to ask the IaaS provider about their support capabilities and response times. Knowing where to call for support – and just what is and isn’t supported – can have a tremendous affect on client satisfaction and outsourcing success over the long term.

Sclafani cautions prospective adopters to read the fine print on IaaS contracts, know what support is provided with the contract and what support functions might only be available as additional services.

Negotiating the best contract
Regardless of whether you're selecting an IaaS or DCaaS offering, there are contractual obligations to contend with. There are several considerations that might help improve your deal – or at least avoid disappointment later on.

One area that is often overlooked is credits (or "compensation") for breached SLAs. When an SLA is in place with a vendor, you cannot reasonably expect compensation for lost revenue or damages. In all cases, you cannot expect any more credit than the amount of money that you spent on hosting for that billing period. Contract terms and credits should be reviewed and discussed with providers in detail before signing off on any deal.

When dealing with IaaS providers, a client with modest computing needs can sometimes strike a better deal by opting to use slightly older servers or other equipment. The fact is that IaaS providers are always buying the latest and greatest equipment, and the payback period for new equipment is usually quite fast. Clients that can choose to employ older servers sitting in the provider's static inventory (even just six months or one-year-old) might net some savings. Go into negotiations willing to ask questions and learn the areas where a provider can be flexible.

Remember that DCaaS providers are often not as flexible since they are merely providing space, power and cooling. There is far less room to negotiate with a DCaaS or colocation provider, but you may be able to save some long-term costs by opting for longer commitments, if that makes sense for your IT outsourcing needs.

This was first published in April 2011

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