Can you help us build a tier 5 data center?


A data center consultant K told me this story. In around 2005 or 2006 he gave a talk at a data center conference at a famous financial and resort city somewhere in Asia. A gentleman J walked up to K afterwards and introduced himself as a property developer who are looking into building a new data center. The topic that K spoke about on the stage was about data center standards and mentioned Uptime Institute Tiers and TIA942, and J said he wanted to build a Tier 5 data center.

As an aside, let me defer to other posts/websites on the design standards and Tier level/Rated/Facility class (see reference 1 and 2). Generally speaking, most define the data center design based on resiliency required up to four levels.

K was taken aback and asked if J is aware that the Tier levels tops off at IV / 4, J said he knows and he wanted to go one up better than Tier IV / 4. J shared that given the city he planned to build the new data center has not had any standalone data center facility, he wants to stand out and that city is well known to have extravagant hotels and malls and such.

The idea that build them and they will come

K is kind enough to ask J if he had done a market study and knows whether potential clients demand a highly resilient and fault tolerant data center, and J replied no he has not but he thinks that demands will rush in for his data center once it is announced that such a data center will be built. Well, maybe if you have done your study and knows where the competition for starters. But if you have not done any of the study of market demand and competition, then what you built may be over built, or way ahead of demand and will take longer than your optimistic timeframe to sell them.

I had on multiple occasions met with potential data center owner who are considering to build their first data center non first tier data center market in Asia. Surprisingly, a common central theme of their plan hinges on “build them and they will come” mindset. Today, several Asia cities are in over-supply not only in residential / industrial sectors but also the sub-sector of data center of which the over-confidence of demand will come when supply is there is one contributor to the situation. Data center facility is a huge investment, a China data center company I have known to have a data center facility in Beijing that is well sought after, but expanded in other cities which they are less familiar with and suffers losses for years, which drags down their overall finances and they are forced to sell their crown jewel at less than preferred circumstances and numbers.

Client needs and supply / demand

I have two points to make. Firstly, know your market and competition, and your financial strength. If all your competition in the market are building to get shared hosting type which only demands a UPS backed electrical supply to their IT servers, then building it to higher level of resiliency makes your data center space more pricy and will take longer to fill up, if ever. There was a few such cases in Singapore and some have folded after building a data center, and some have spent millions of dollars and the project cannot take off and are now in limbo. Many such cases also exist in China. While one case in Singapore had prevailed, they built their data center during the dot com boom but were caught in the downturn of dot com bust which had several casualties, and this one data center managed to survived through building up their data center facility on a floor by floor basis unlike the other two, thus less demand on their financials compared to the others during that period.

More prudent to match cost outlay to take-up

Secondly, the main technical infrastructure design parameter of whether to build to concurrently maintenance (aka roughly equivalent to Tier III / Rated 3 / Facility Class 3) or fault tolerant (Tier IV / Rated 4 / Facility class 4) are dependent on the demand by the client. If the target clientele are the financial institutions or those organizations that due to various reasons are reliant on IT but their system can only run on single host/system or active-passive set-up (it seems like airline ticket reservation system are like that), then it make sense. Another way is to plan for multiple level of resiliency features, i.e. share the same fault tolerant level of electrical infrastructure but flexible enough to accommodate either concurrently maintainable or fault tolerant demand of the client (although generally this will be slightly more costly than purely designed and implemented to concurrently maintainable).

Fortunately these days, there are so much information in the market and the new owners-to-be are better informed. My other gripe is those that knows a little in one particular topic of the data center knowledge and yet is so convinced of it that precludes meaningful exchange, but that is another story in future post.


Can you help us build a tier 5 data center?