DataCenterNews Asia Pacific logo
Specialist data center news for Asia Pacific
Story image

What to consider before leasing excess data center capacity

FYI, this story is more than a year old

The trend of excess capacity in the data center is encouraging business leaders to consider how it could be monetised.

That's the word according to Gartner, who says whether it is the result of virtualisation, application migration or other business events, many business leaders are considering leasing or providing the space as a colocation offering.

Leasing spare capacity effectively requires that the IT organisation becomes a colocation service provider, involving functions and roles completely foreign to it and carrying significant financial and legal risk, Gartner says.

“Business leaders are nonetheless asking their IT organisations to determine how such services could be packaged, and what revenue the business can expect from them.

Ahead of the Gartner Data Center, Infrastructure - Operations Management Summit 2016, Bob Gill, research director at Gartner, suggests how IT executives can prepare for such requests.

“Leasing data center space or offering colocation of third-party equipment may involve establishing a completely new line of business. Most enterprises will be ill-equipped to do this,” says Gill.

“Enterprise risk assessment must consider all legal risks as well as potential impacts on reputation, security, operations and the organisation. These must be understood and addressed before a business plan is considered,” he explains.

“The pricing of a packaged service must not only cover all costs and account for allowable margin, it must also be performed with competitive commercial offerings in mind,” Gill says.

“Failure to do so will negatively impact demand, and thus squander capital.

Eight-Step Approach

Gartner says IT leaders can follow this eight-step approach if asked to investigate a leasing service:

  1. Determine the intent — The enterprise's goals must be clear and agreed on by all parties, with consensus on what is being offered and why. There are alternative ways to monetize excess data center capacity.
  2. Determine the granularity of the offering — The data center may not be designed to support a sufficiently granular service. Prospective customers will have different expectations for power or cooling, area (single racks/cabinets vs. isolated areas of space) and contract length.
  3. Quantify potential impacts to the enterprise — Commercial colocation may not be compatible with the existing business model. Inviting external parties into the data center may be untenable if the security of client data or IP is paramount.
  4. Project the organizational impacts — How will the new service affect staff? Look beyond the operations of the data center itself to also consider accounting, marketing and sales.
  5. Uncover the security impacts — Seek consensus on how security practices will need to change to accommodate the presence of external parties. Consider whether the service should merit internal cages, multilevel access and human escorts.
  6. Detail operational impacts — Facilities management will need to change how they perform building and data center maintenance, extending coordination to all of the guest environments.
  7. Calculate the costs — Knowing the costs to provide a service is critical, but difficult for proposed and specific leased offerings as staff and loaded costs are often spread across the data center and other facilities operations.
  8. Create the business plan — Critical to a business plan is comparing the internal costs of provision with competitive pricing for such services. Is the enterprise looking to defray costs, break even or profit from this service? Does demand exist locally at the proposed pricing?

“The complexities and risks inherent in offering commercial colocation will confine the majority of such offerings to educational and governmental agencies, as well as vertical industry ecosystems, through 2018,” adds Gill.

Related stories
Top stories
Story image
Cloud infrastructure
HashiCorp's cloud provisioning tool Terraform gets upgraded
Major improvements to HashiCorp Terraform software will help users to consistently provision and manage any cloud, infrastructure and service.
Story image
Digital Transformation
Equinix invests in Indonesia with a $74m data centre
The centre will be strategically located near the largest internet exchanges to meet the country’s growing digital needs.
Story image
Cloud
Microsoft and Auckland Transport announce Azure Cloud agreement
Microsoft and Auckland Transport (AT) have announced an agreement that looks to boost agility and innovation while also reducing costs and improving sustainability in transport services.
Story image
Cloud infrastructure
Who is HashiCorp, and why your cloud journey will be impacted
We investigate the fast-growing San Francisco vendor that is transforming how enterprises approach cloud infrastructure.
Story image
5G
Mavenir integrates cloud-native 5G offerings with Google Cloud infrastructure
Mavenir has integrated its cloud-native 5G products with public cloud infrastructure on Google Cloud, expanding the company’s ‘One Network, Any Cloud All Software’ strategy.
Story image
Data analytics
COVID-19 relief innovation takes 2022 SAS Hackathon crown
In COVID-19’s wake, more than 287,000 MSMEs joined JakPreneur, a collaborative government platform that links entrepreneurs and stakeholders
Story image
Data Centre Cooling
The world is heating up, but data centres should keep their cool
With the world heating up, the challenge of keeping data centres cool becomes more complex, expensive and power intensive.
Story image
Sustainable IT
Equinix partners NUS to use hydrogen tech in data centres
The partners will develop hydrogen fuel technologies for green data centres in tropical climates, and for use in Equinix’s global network.
Story image
Storage
Seagate announces next gen advanced storage arrays
The new Exos X systems feature up to twice the performance of the previous generation and enhanced enterprise-class durability, the company states.
Story image
Edge Computing
NTT launches Edge-as-a-Service to accelerate automation
"Minimum latency, maximum processing power, and global coverage are exactly what enterprises need to accelerate their digital transformation journeys.”
Story image
Artificial Intelligence
ASUS Servers announce AI developments at NVIDIA GTC
The Taiwanese multinational now offers NVIDIA-certified servers with H100 Tensor Core GPU and AI enterprise software suite.
Story image
Network Infrastructure
Vertiv launches solutions to better manage edge computing
Vertiv has introduced new power and cooling solutions for the edge of the network, including the addition of lithium-ion models to a leading on-line UPS family.
Story image
Software Defined Wide Area Network
Axiata, Versa Networks partner for enterprise SASE in Asia
Axiata has partnered with Versa Networks to deliver Secure Access Service Edge (SASE) technology to rapidly digitalising Asian enterprises.
Story image
Data analytics
Srisawan Hospital to enhance patient experience with InterSystems TrakCare
The new Srisawan Hospital in Bangkok has chosen InterSystems TrakCare to help create enhanced patient experiences and promote further digital engagement.
Story image
Software-as-a-Service
Cloudera launches all-in-one data lakehouse cloud service
CDP One makes it faster, easier and less risky for businesses to move to the cloud and migrate existing workloads to a modern data architecture.
Story image
Gartner
SnapLogic named Visionary in two Magic Quadrant categories
SnapLogic has announced that it is the only iPaaS (Integrated Platform as a Service) vendor to be named a Visionary in two Magic Quadrant categories.
Aws Marketplace
Learn how to implement a backup and recovery plan for a new generation of Kubernetes-based modern applications
Link image
Story image
Optical Networking
NEC predicts AON as a next-generation infrastructure
NEC's open optical transmission devices support multi-vendor configurations, allowing customers to procure and combine equipment from multiple vendors.
Story image
Digital Transformation
NEXTDC opens $1b+ next gen sovereign data centre in Sydney
Australian data centre as a service provider has officially opened S3, its largest Sydney development to date. 
Story image
No-code
Eradicating ‘App Fatigue’ and retention problems through implementing no-code ITSM
Almost always, simplicity is best. Intuitive designs and practical workflows are the keys to preventing fatigue.
Story image
Superloop
Stellar financial result after major strategic moves by Superloop
We get a glimpse under the hood at the financial results from 2022 for the connectivity giant Superloop.
Story image
Data Centre Maintenance / Management
Schneider Electric backs new Leading Edge data centre in Australia
As a result of the new project, regional Australian businesses and communities will likely have greater access to distributed cloud networks.
Story image
Digital Transformation
Nanyang Technological University Singapore builds digital brand presence
Leveraging the customisation features of Sitefinity DX, non-technical users could upload content and create design pages and boost work productivity. 
Story image
Network Management
Data is growing at breakneck speed, but are we optimising its value?
Data lies at the heart of digital transformation, as every digital touchpoint translates to a data point. In this digital-first world, data is being created everywhere today – at breakneck speeds.
Story image
5G
Worldwide 5G mobile data traffic exploding - report
"With 5G, there is a wider range of deployment scenarios, forcing vendors to provide comprehensive solutions to support every need."
Story image
Sustainable IT
New report calls for tighter guidelines on data centre sustainability
A new Cushman & Wakefield report is calling for water consumption and carbon emissions to be measured in addition to power usage.
AWS Marketplace
Whitepaper: A practical guide for mitigating risk in today’s modern applications
Link image
Story image
Hyperscale
Growth in hyperscale data centres to increase shortage of IT workers
New Zealand's tech worker capacity is set to come under increasing pressure as the number of hyperscale data centres grows.
Story image
Digital Transformation
NTT launches its Cyberjaya 6 data center in Malaysia
NTT expands its hyperscaler footprint in Malaysia with its sixth data center facility, supporting the growing digital economy.
Story image
Multi-cloud
VMware advances multi-cloud management with VMware Aria
Managing apps and infrastructure in a multi-cloud, especially public cloud, and multi-technology environment is complex.
Story image
Melbourne
Equinix invests $23m to expand ME2 data centre in Melbourne
Equinix has completed the second phase expansion of its ME2 International Business Exchange data centre, located in Port Melbourne.
Story image
Software-as-a-Service
Honeywell launches Data Center Suite for business outcomes
Honeywell has launched its Data Center Suite, a portfolio of outcome-based software offerings to help data centre managers and owners.
Story image
Data Protection
Cloudflare brings Data Localisation Suite to more APAC businesses
This allows any business in these countries to service their data locally while benefiting from the speed, security, and scalability of Cloudflare’s global network.
Story image
Startup
Zetaris is changing the way we think about data virtualisation
Zetaris was launched on the Microsoft Marketplace and Ingram Micro Cloud Marketplace in Australia in 2020 and has since expanded into nine global markets.
Story image
Microsoft
VMware extends collaboration with Microsoft for enterprise workloads in Azure
Mutual customers will have the choice to purchase Azure VMware Solution through the VMware Cloud Universal program.
Story image
Cloud
SoftIron announces its newest flagship offering, HyperCloud
SoftIron has announced HyperCloud, the world's first full turnkey, completely integrated and supported Intelligent Cloud Fabric and the company's newest flagship offering.
Story image
Data center
Australia’s data centre pioneer still leading after 22 years
We look at the fascinating success of Macquarie data centre's over its 22 year life span and how they continue to innovate in a highly contested sector.
Story image
Data Protection
iseek secures Queensland Government data centre contract
iseek secures the Queensland Government's core network data centre as-a-service contract after a competitive procurement process undertaken by the CITEC.
Story image
IT Automation
Juniper Networks announces expansion of Apstra Software with Apstra Freeform
The newly announced Apstra Freeform technology will give customers the ability to manage and automate operations for data centers regardless of the architecture.
Story image
Update
InterSystems releases updates to its IRIS data platform
Provider of next-generation solutions InterSystems has announced a series of new releases to its award-winning InterSystems IRIS data platform.
Story image
IT infrastructure
Bentley Systems announces finalists for the 2022 Going Digital Awards in Infrastructure
The company says that this annual awards program honours the work of Bentley software users who are advancing infrastructure design, construction, and operations throughout the world.
Story image
Machine learning
Oracle announces MySQL HeatWave for Amazon Web Services
MySQL HeatWave is a service that combines OLTP, analytics, machine learning, and machine learning-based automation.