The Arnett Group Update Podcast – What’s Driving Data Center Relocation Growth – S01E01

Join host Bennett Sherman and Arnett Group CEO/CTO, Scott Arnett, a veteran of over 250 Data Center moves along with Art Scheuber, VP of Consulting, and Dave Woodward, Sales and Marketing Advisor, as they discuss what’s driving corporations to get out of the data center business and the economic and other benefits that corporate leadership expect to realize.

Arnett-Group-Podcast-S01E01-DC-Relo-Colo-021021-Final (Transcript)

[00:00:07] Welcome to the Arnett Group update, bringing you current and relevant insights and information on today’s pressing issues in technology.

Ben: [00:00:20] Hello and welcome to the Arnett Group update. I’m Ben Sherman, and I’m joined by Scott Arnett, Art Scheuber and Dave Woodward from the Arnett Group. And we’d like to talk today about data center relocations. Scott, why don’t we start with you? What are the primary reasons that a customer in this day and age would want to relocate or co-locate their data center?

Scott: [00:00:49] Well, there’s a few reasons, Ben. One is customers are with the COVID going on right now. Customers giving up real estate. They’re getting out of leased buildings. They’re getting out of buildings that they own. And so they’re looking for those data centres to get off premise. So it’s taken them to a colocation. It could be a hybrid of things going to the cloud and going to colocation. And they’re also looking to reduce maybe some staff, reduce some complexity in their environment and get it off site and take it to a colocation where they’re going to leverage remote hands and some other services.

Ben: [00:01:26] There are also a number of compliance factors as well. Right? Whether it’s in the health care or the retail or in many of the verticals right now. There are a number of other security factors that come into play, aren’t there?

Scott: [00:01:43] Correct. So it’s access to that physical hardware. It’s how it’s audited. Audit trail, logging files, some of those types of things. So there absolutely is some verticals, some compliance pieces that taking it to colocation helps address and puts a checkbox in that audit form.

Ben: [00:02:01] Art Scheuber, When you talk to customers, are they asking you, well, hey, why can’t I just get two men in a truck or a commercial mover just to move the equipment? What do you tell them?

Art: [00:02:15] Well, we tell them that the type of equipment they’re moving is extremely sensitive and it’s very different to see something like that bouncing around in the back of a truck with a tarp rolled over it, as opposed to the specialized type of equipment and storage units that we use when we go through our whole process. Moving equipment with the Arnett group is really a entire process. The process starts with us taking an inventory of your entire systems, making sure that you go through a down and up of those systems, to ensure that they’re running. How many of us have applications we haven’t shut down in 20 years? I mean, that’s literally what you find out with a customer, that they’ve got those types of applications out there. And the next time it comes up, the systems won’t happen or won’t start up or drives that won’t come up. So we go through that whole process to make sure what we do. And in that move is something that will work when they get to the other side. The other thing is insurance. How many companies are prepared to make sure that all of that equipment is insured as we’re transporting it? And that’s something, those are just some of the things that we do that people don’t even think about.

Ben: [00:03:40] Dave, tell me a little bit about the financial aspect that comes into this decision. You’re generally now going from a capital expenditure to an operational expenditure model, and that seems to be more and more prevalent nowadays, isn’t it?

Dave: [00:03:56] Yeah, it really is. We see that a lot of companies are leaning towards the Op-Ex model. And clearly there’s a lot of advantages to getting the equipment off from us, especially if they’re in buildings now where companies are not even have any people at home, right? And they’re paying for real estate. That’s not even being used. I mean, Scott, do you have anything to add to that?

Scott: [00:04:21] Yeah, absolutely. So to your point and the COVID piece, they may not be coming back to the office. So get it. Get it out of here. And we’re giving up these buildings. Plus, they’re looking for more bandwidth. So coming out of some of these High-End data centers where there is a lot more bandwidth capabilities to handle all the remote workforce and stuff that’s coming in, there’s opportunity for new technologies to do the remote worker, those types of things. So there’s benefits from there as well. There’s of course, then the financial aspect of it. It’s covering the operational expenses versus the capital expense and the layout for the hardware, maintaining that hardware, refresh in the hardware, those types of things all come into play, as well as the cost of operating that data center, the cooling, the fire suppression, the power consumption. And as more and more new equipment keep coming into the data center in the high density, of course, the power consumption and the heat goes up. So how do you address those? So going to [akallo] helps address a lot of those challenges.

Dave: [00:05:26] Yeah, in fact Ben, we just had a call with the customer, a prospective customer last week, Scott and I did. Where they really come up against kind of a wall. I mean, what do you do if you’re in a data center now, and you don’t have backup generators or adequate backup generators, you don’t have adequate cooling and you’re starting to see outages and so forth. What’s the cost of that? It’s going to cost a lot of money to retrofit an existing data center. And a lot of times it’s just way more cost effective financially to go ahead and make the move into a colocation center at this point.

Art: [00:05:58] But then it’s also going to be could be an even bigger loss of money if they go down. Right. What is the cost per hour to the business? And that’s something that I know everybody from CISOs, chief information security officers to CFOs, to CEOs would lose sleep over.

Ben: [00:06:21] Scott, if people want more information on the Arnett Group’s services regarding data center reloads and colo’s, how would they get ahold of you?

Scott: [00:06:31] Absolutely. So email us at sales@arnettgroup.net. You can reach us at 920-261-2037 or go to our website, arnettgroup.net/.

Ben: [00:06:44] And for Scott, Art Scheuber and Dave Woodward, I’m Ben Sherman. Thanks for joining us with the latest Arnett Group update.