Speed is where margins increase in Data Center Solutions

Rich Miller at Data Center Knowledge has a good post on the value of a millisecond for competitive carriers.

More Speed, at $80,000 a Millisecond

January 24th, 2011 : Rich Miller

A panel at last week’s PTC ’11 conference in Honolulu provided a glimpse at the startling economics on the shifting frontier of low-latency trading. The difference in pricing between the fastest route and runners-up can be dramatic, according to Will Hughs, president and CEO of Telstra Americas.

“On the Chicago to New York route in the US, three milliseconds can mean the difference between US$2,000 a month and US$250,000 a month,” Hughs said. “The financial traders will pay a premium.”

This data fits well with what I have been telling some clients that speed is where margins increase.  Federal Express expanded its capacity by buying a bunch of 727 from United Airlines cargo operations.  In the conversation with a United executive and FedEx executive, the United person was so glad to get out of the cargo business.  FedEx was charging $3.60 a pound, United $0.20 a pound.  A big difference if you sell next day delivery (speed vs. capacity).

image

Note most are focusing on low latency financial trading.

That premium illustrates the value proposition for the network operators who can provide those extra milliseconds and microseconds. That’s why we’ve seen new fiber builds like Spread Networks’ recent trenching of a route connecting  key trading hubs in Carteret and Secaucus, which could also provide some customers in an Equinix data center in Secaucus with faster routes to exchanges in Chicago. Meanwhile, Hibernia Atlantic has announced plans to build a trans-Atlantic submarine fiber optic cable that will provide faster connections between New York and London than any available today. These illustrate how capacity isn’t the only metric driving fiber economics.

But, you know where else the money is?  Gaming.

However, online gaming demands low latency so as not to disadvantage players with low latencies due to highly varied ping times among fellow players - for this reason, game server applications generally favor players with lower latencies by determining the data relating to a player as known to the server, and allowing players to act on that, not the data as known by the fellow player's client.

Low latency is currently a hot topic in the capital markets, particularly where trading based on algorithms (Algorithmic Trading) is used to process market updates and turn around orders within milliseconds. Low latency trading refers to the network connections used by financial institutions to connect to stock exchanges and Electronic communication networks (ECNs) to execute financial transactions. With the spread of computerized trading, electronic trading now makes up 60% to 70% of the daily volume on the NYSE and algorithmic trading close to half of that. Trading using computers has developed to the point where millisecond improvements in network speeds offer a competitive advantage for financial institutions.

Low latency is also being discussed in the advertising community, as a form of advertising that responds rapidly to consumer inputs, often from tweets.

And as this wiki post mentions, advertising is a big area too.

Not a bad market group to go after – Securities trading, Gaming, and Advertising.

Thanks Rich for an informative post that helps me prove my point that speed is worth a bunch of money.

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What is missing from prediction of Top 5 Green Data Center Trends in 2011? Words of wisdom from a conversation with Olivier Sanche

TriplePundit has a post on the Top 5 trends in Green Data Center in 2011.

Top Five Trends for Green Data Centers in 2011

By Kathryn Siranosian | January 18th, 2011 3 Comments

Last year, Triple Pundit took an in-depth look at how companies are greening their data centers.

Now, it’s time for us to revisit that issue and ask, “What’s new?”

What’s the list of top 5?

1. Continued emphasis on efficiency –with a twist.

2. Improving business flow through virtualization and cloud computing.

3. Modularity.

4. Innovative design and design integration.

5. Continued evolution of certification and regulation.

But does this list really help you green the data center?  Something is missing.  Something more important.  Then, it came to me as I am researching stories for a eulogy I’ll give for Olivier Sanche’s memorial service.  A method that Olivier practiced – a passion to drive for a complete system that works and is better than the rest.  Which now that I am writing this makes sense why Olivier fit in Apple’s culture and admired Steve Jobs when he read about the company 20 years ago.  Olivier had the same passion for data centers that Steve Jobs has for consumer products.

Read this story shared by Nic Bustamente on a conversation with Olivier Sanche.  You’ll get the idea.

I was lucky enough to meet with Olivier a few weeks before his passing. We conversed about many issues. I was always amazed how he ably wore so many hats. Many folks in the industry wear one or a few hats, but Olivier wore them all so well. We fondly discussed typical data center guy stuff – outages, uptime, maintenance, design, construction – it went on for hours. Throughout the discussion he never seemed to tire. Olivier was ten years my senior, and I was starting to wear out. It was both embarrassing and humbling. I was battling bronchitis, (which later developed in to pneumonia) but we kept talking!  He continued asking me pointed and highly in depth questions. I was honestly starting to get pretty physically tired, but he was so mentally engaging I didn’t want it to end, and he kept me on my toes. It always amazed me how enthused and lively he could be with his energy – his questions and the discussion kept me going. We started discussing our various company’s positions and learned that later on that month we were due to meet up again at an industry event. We talked about how many in the industry present the same thing every year, how things don’t change too often, or as much as we would like. There are very few folks in this world who drive real change, and even fewer who embrace it. Of those among us who are agents of both, Olivier was one who you could always count on to do so intelligently and thoroughly, but most importantly, without ego. His was always a passionately genuine and humanistic approach. I am glad we had the opportunity to talk one last time, and I will always cherish the final experience.

I have a hard time thinking about it, cause every time I do I start to honestly cry. I didn’t think in a million years we would have to say goodbye like this.

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What is missing from prediction of Top 5 Green Data Center Trends in 2011? Words of wisdom from a conversation with Olivier Sanche

TriplePundit has a post on the Top 5 trends in Green Data Center in 2011.

Top Five Trends for Green Data Centers in 2011

By Kathryn Siranosian | January 18th, 2011 3 Comments

Last year, Triple Pundit took an in-depth look at how companies are greening their data centers.

Now, it’s time for us to revisit that issue and ask, “What’s new?”

What’s the list of top 5?

1. Continued emphasis on efficiency –with a twist.

2. Improving business flow through virtualization and cloud computing.

3. Modularity.

4. Innovative design and design integration.

5. Continued evolution of certification and regulation.

But does this list really help you green the data center?  Something is missing.  Something more important.  Then, it came to me as I am researching stories for a eulogy I’ll give for Olivier Sanche’s memorial service.  A method that Olivier practiced – a passion to drive for a complete system that works and is better than the rest.  Which now that I am writing this makes sense why Olivier fit in Apple’s culture and admired Steve Jobs when he read about the company 20 years ago.  Olivier had the same passion for data centers that Steve Jobs has for consumer products.

Read this story shared by Nic Bustamente.  You’ll get the idea.

I was lucky enough to meet with Olivier a few weeks before his passing. We conversed about many issues. I was always amazed how he ably wore so many hats. Many folks in the industry wear one or a few hats, but Olivier wore them all so well. We fondly discussed typical data center guy stuff – outages, uptime, maintenance, design, construction – it went on for hours. Throughout the discussion he never seemed to tire. Olivier was ten years my senior, and I was starting to wear out. It was both embarrassing and humbling. I was battling bronchitis, (which later developed in to pneumonia) but we kept talking!  He continued asking me pointed and highly in depth questions. I was honestly starting to get pretty physically tired, but he was so mentally engaging I didn’t want it to end, and he kept me on my toes. It always amazed me how enthused and lively he could be with his energy – his questions and the discussion kept me going. We started discussing our various company’s positions and learned that later on that month we were due to meet up again at an industry event. We talked about how many in the industry present the same thing every year, how things don’t change too often, or as much as we would like. There are very few folks in this world who drive real change, and even fewer who embrace it. Of those among us who are agents of both, Olivier was one who you could always count on to do so intelligently and thoroughly, but most importantly, without ego. His was always a passionately genuine and humanistic approach. I am glad we had the opportunity to talk one last time, and I will always cherish the final experience.

I have a hard time thinking about it, cause every time I do I start to honestly cry. I didn’t think in a million years we would have to say goodbye like this.

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Google, Amazon, and Netflix comment on uptime 99.999%

NYTimes has a post on uptime.

99.999% Reliable? Don’t Hold Your Breath

By RANDALL STROSS

 

AT&T’s dial tone set the all-time standard for reliability. It was engineered so that 99.999 percent of the time, you could successfully make a phone call. Five 9s. That works out to being available all but 5.26 minutes a year.

The author was able to get Google.

As for moving to 99.999, well, that may never come. “We don’t believe Five 9s is attainable in a commercial service, if measured correctly,” says Urs Hölzle, senior vice president for operations at Google. The company’s goal for its major services is Four 9s.

Google’s search service almost reaches Five 9s every year, Mr. Hölzle says. By its very nature, it is relatively easy to provide uninterrupted availability for search. There are many redundant copies of Google’s indexes of the Web, and they are spread across many data centers. A Web search does not require constant updating of a user’s personal information in one place and then instantly creating identical copies at other data centers.

Amazon

One of those services, the Simple Storage Service, or S3, allows companies to store data on Amazon’s servers. “We talk of ‘durability’ of data — it’s designed for Eleven-9s durability,” says James Hamilton, a vice president for Amazon Web Services. That works out to a 0.000000001 percent chance of data being lost, at least theoretically.

And threw in a Netflix blog post.

One thing that Google and other companies offering Web services have learned to do is to keep software problems at their end out of the user’s view. John Ciancutti, vice president for personalization technology at Netflix, wrote on the company’s blog in December about lessons learned in moving its systems from its own infrastructure to that of Amazon Web Services. He said Netflix had adopted a “Rambo architecture”: each part of its system is designed to fight its way through on its own, tolerating failure from other systems upon which it normally depends.

“If our recommendations system is down, we degrade the quality of our responses to our customers, but we still respond,” Mr. Ciancutti said. “We’ll show popular titles instead of personalized picks. If our search system is intolerably slow, streaming should still work perfectly fine.”

Watch for availability to be marketed more.

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Three Data Center Rating Systems: Uptime, LEED, CEEDA

ZDNET has a post summarizing the three data center rating systems out there  - Uptime, LEED, and CEEDA.  The author summarizes the current rating system hype.

How does your datacenter rate?

By David Chernicoff | January 20, 2011, 11:39am PST

Many businesses looking at building new datacenters announce that they are planning on achieving certification for their new datacenter by an external authority that will evaluate their datacenter and grant a specific status or award to the facility. When the new datacenter gets such a status or award, the company will send out press releases, tell stockholders, and use it in their promotional material, if applicable. But the standard for the current crop of rating entities are consistent only across their own ratings, and there are more groups doing this than you might realize. Here’s the current crop of high-end standards and awards applied to datacenters.

One of the most popular out in the public is LEED, and the author pops that illusion .

Leadership in Energy and Environmental Design (LEED)

This standard, run by the US Green Building Council, you might be surprised to learn, is not a datacenter standard per se, despite all the press over the last year on datacenters achieving high LEED awards. The USGBC defines the standard as “a nationally accepted benchmark for the design, construction, and operation of high-performance green buildings.”  And while a datacenter needs to work hard to achieve LEED awards, the basic metric is not designed to rate a fully optimized datacenter.

Does your marketing group tell you to get a LEED rating?

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