24 Jul 2013
When it comes to information processing facilities, many Australian businesses are failing to protect their most critical asset, according to new research from Colliers International.
David McEwen, Colliers International Director of Consulting, said three quarters of organisations host their data centres in office buildings despite the threat of catastrophic operational risks.
"Hosting data centres in an office building is a serious threat to business continuity," he said.
It's astounding to see such a high proportion of business leaders failing to invest in protecting the technology that drives their operations, especially with growing reliance on technology in the workplace, the emergence of enterprise-ready cloud solutions and the rapid growth we've seen in cost-effective colocation options over the past two years."
"Organisations are at significant risk of losing revenue and jeopardising business operations if they host their computer systems in-house, with businesses reporting over half a million dollars in lost revenue from a single 90 minute incident. An important lesson learnt in the wake of wild weather events such as last year's floods in Brisbane and New York is that an in-house data centre significantly increases the risk of financial and physical loss," he said.
"Forty per cent of enterprises without an adequate disaster recovery plan go out of business within five years of a critical infrastructure failure. When the data centre is physically separate from the staff, the loss of the office is much less devastating to the business."
Mr McEwen said it's not just headline-making natural disasters that leave in-house data centres at risk. Office buildings come with risks beyond a business's control. "As an office tenant you have minimal control over the environment supporting your IT operations," he said. "You're reliant on the performance of the landlord's facilities manager, whose focus may not be on insuring the performance of your computer room, particularly out of normal business hours. Temperature fluctuations and power interruptions could significantly impair your server equipment.
"Other tenants can also compromise the safety of your in-house data centre; for example a kitchen flood on an upper floor can inundate your computer room."
Most computer rooms in office buildings only make Uptime Institute's Tier 1 standard, so statistically they can expect an average of 29 hours of unplanned outages each year. In a professionally managed facility users can expect downtime of less than two hours, with most colocation centres designed to achieve a Tier 3 resilience rating. Some facilities are reporting years of continuous operation without unexpected downtime.
"Another advantage of getting your data centre out of the office building is that you greatly reduce the cost of moving office at the end of lease," Mr McEwen said. "Your building selection is no longer limited to expensive office stock that has the capacity and resilience to support an in-house computer room."
Colliers International's research revealed that risk reduction is the primary driver for businesses that choose to host their data centre externally. This is followed by cost reduction, the appeal of professional data centre management and the flexibility to scale up and down as organisations' IT footprints change.
"It's not just a choice of hosting computer equipment in an in-house computer room or third party co-location site", said Mr McEwen. "Organisations are turning towards migrating specific applications or infrastructures to cloud services providers".
"Developing a data centre strategy requires a sophisticated understanding of the opportunities, costs and risks of the various options, balanced against the organisation's IT footprint and risk tolerance," he said. "Migrating systems between data centres is generally a complex exercise and it is important to understand the full costs to avoid surprises."
With substantial investment in third-party colocation data centre facilities over the past two years, it's a buyers' market. Uptake is being led by larger organisations, with a range of manufacturing, transport, finance and banking organisations turning to third-party colocation arrangements. Growth is also being driven by regulatory changes in the public sector, with both Federal and State governments enacting plans for their agencies' data centres to be migrated into third-party sites.
"Heads of IT across every sector need to think about why the Government is doing this, and consider what this investment in third-party colocation facilities means for their own business," said Mr McEwen. "Organisations need to be looking at professional data centre management as an option. What would happen to your business if it lost its critical information, applications and systems for even one day?
"When you're looking into options, it can help to have an independent consultant in to assess your situation and provide strategic advice around your hosting arrangements and discuss options, costs, migration strategies and industry benchmarks."
Colliers International's Technology Solutions team specialises in data centre strategy, migration and fitout, having delivered projects for some of Australia's largest institutions.
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