Datacentre Locations in Asia
Issue 41 - May 08

With massive demand for datacentre facilities across the region many real estate teams are now responsible for finding the right space for mission critical equipment. Where should they be looking?

Banks, IT companies and datacentre space providers in Asia are fuelling one of the more rapid periods of datacentre growth the region has ever seen. Andre Smit, Managing Director, Data Center Operations, Asia Pacific, Cisco says his division is currently the company's fastest growing. He believes that this growth stems from a number of factors.

First, and most obvious, is that many companies see the Asian growth story as continuing while other geographies are stagnating or in some cases receding. Datacentre growth follows business growth. Other reasons for the change, says Smit, is that the whole technology sector is changing. IT departments and the groups that support them are rearranging the way that they are set up, and real estate must now be developed to respond to this need. The new buzzword is "virtualisation", and people developing and locating space for datacentres should be in close contact with the IT departments to understand how this affects their organisation. Virtualisation (in simplified terms) involves the decoupling of location, data storage and processing. In many cases virtualisation means the consolidation of multiple existing datacentres and grouping data according to function or process rather than geography alone.

For example, instead of each separate office having its own datacentre or server space, memory might be gouped in one datacentre while processing might take place inanother. In a banking environment this might mean that even if there is a power failure where the traders are located they could simply move location and carry on working because the datacentre is on a separate power supply often many kilometres away or even in another country.

According to Smit, another factor driving the demand for datacentre space in Asia are global regulations requiring data to be stored, to a certain standard over longer periods. International companies want their entire supply chain to act responsibly towards data, to store it for a given period and to be as environmentally friendly as possible. He says that reductions in discretionary spending have meant companies are more likely to focus on datacentres, because they never describe datacentres as discretionary. Instead they are mission critical recieving attention even during rough periods.

Smit notes that Singapore is a popular hub and many other industry players agree. Banks such as Citibank have gone as far as relocating their global CIO to Singapore making it a perfect location for their datacentre space requirements. The decision on where to locate your datacentre should not be taken lightly. Charles Lee, Managing Director, Newtech, and Mr Tom Wong, CEO, Hogan, gave a joint presentation entitled Datacentre Location Site Selection in Asia at Managing Corporate Datacentre Facilities Asia 2007. In that presentation, they outlined the site selection process that they went through while looking for the best location for their new datacentre. Like many companies they first started with a set of principles for site selection. These were:

• Reliability - To assure the continuity of the daily operation of datacentre in face of peril
• Total cost of ownership - To control cost of owning,using and managing the IT infrastructure
• Service-level quality - To assure the operation up to International Standard (ISO27001/ ISO9000) both by in-house staff and service providers.

The whole technology sector is changing. IT departments and the groups that support them are rearranging the way that they are set up, and real estate must now be developed to respond to this need.

There were then four other headings under which they formed criteria for selection, these criteria were then applied to countries, then cities, and finally to the type of building itself:

Technical Factors
Technical factors, as some of the most important, were the first to be considered. These differ from company to company and on the type of datacentre to be created. For their team etchnical factors could have been adversly affected by the following factors:
. Dedicated building
. Not in earthquake zone
. Out of any floodplains, away from inundation zones of dams
. Outside hurricanes, tornadoes, typhoons areas
. Not within 200 meters of major highways
. Away from high risk area i.e. Train station, Airport, City Center
. No hazardous production facilities.

Infrastructure Factors
Infrastructure was broken down into a further four sectors including electrical, communications, water and the conditions of the site itself. The electrical infrastructure had to meet the following:
. Availability of capacity needed
. Multiple power feeds from multiple substations
. Support from utility if upgrades are needed
. Record of outages/responsiveness of utility to assure power quality.

From their communications provider they required:
. Availability of fiber from multiple carriers
. Diverse entrance facilities
. Microwave line of site
. Satellite capability.

As a minimum requirement they needed water for a 48 hour period and preferably from two sources of supply. They were reasonably certain that they would need a dedicated building to ensure the site could be securable. For this they would need land of a usable size, appropriate soil conditions and drainage.

Economic factors
Economics, as usual, played an important part. Not only would reasonable land, labour and permit costs be required but approval timeframes would also affect the economic viability of the project. After these costs were taken into account they recognised that they would have to also account for various site improvements that would vary depending on:
. Location of utilities
. Acceptable soil conditions
. Demolition and cleanup costs
. A clean toxics report with no hazardous material or contamination.

Given that datacentres are expensive to run, and they would be responsible for running the facility themselves, they needed to ensure that costs of utility operators, telecommunication carriers and ongoing site maintenance costs would not hamper the effectiveness of the facility. Likewise there could be governmental costs and risks associated with the ongoing running of the facility which fell broadly into four categories:
. Proper zoning for usage
. Acceptable permits and review requirements, procedures and timeframes
. Environmental impact requirements
. No prohibition on standby generator usage.

Site Factors
Finally site factors played a lesser, though important, part as these could be made up for if the other factors met the criteria.

Concern over site needs affected accessibility - availability of public transportation, Amenities, Recreational opportunities & reasonable housing costs so that staff working at and servicing the site would not be forgotten. Serviceability from service and vendor access perspective was also weighted as important.

The team then accessed maps and got information about these criteria on a country level. Then they focussed in on the cities that they had chosen. After Shanghai was evaluated as the preferred location, they then went about the process of studying how to improve, evaluating the gaps in various individual site's score cards.

Jane Martin, while acting in the capacity of Director, Corporate Solutions, Jones Lang LaSalle told a similar story at Managing Corporate Datacentre Facilities Conference 2006. She explained that, as a real estate service provider, the process she was required to go through for some clients was in some ways different. She said while the Corporate real estate team was essential in supporting datacentre reliability, they were also be under pressure from that client to get the real estate "deal" done. When BMW chose to set up their facility in Putrajaya in Malaysia, they identified a number of macro considerations which influenced their decision:
. Time zone - be able to respond on a 24/7 basis
. Suitable local talent - especially engineers
. Lower cost than Europe
. Energy access
. Internet access
. Relative stability.

On a micro level, technical requirements for the building could not be underestimated. These included:
. Power supply - scale and reliability
. Proximity to fibre
. Physically secure - hard and soft
.Proximity to neighbouring structures
. Raised floors - air circulation and power cabling
. Industrial pollution
. Fire prevention/extinguishing systems.

In order that these macro and micro considerations are met, whether for a small in-office or a larger built-tosuit facility, Martin emphasised that the integration of the IT and corporate real estate teams at an early stage is vital. The number of locations regionally where larger, built-to-suit datacentres are possible is increasing, with companies such as Ascendas investing significant capital to make this happen. However, as Martin points out, we should be aware that all companies have datacentres of some sort even if it is just a server room in the office. The location and protection of this asset is one for real estate to understand. As they are only getting more important. RFP

The number of locations regionally where larger, built-to-suit datacentres is possible is increasing

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