Quick HOWTO : Ch01 : Data Center Relocation - Justification

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Businesses that need to have a Web presence usually begin with a cheap virtual hosting provider (VHP) that constantly aim to reduce their costs via standardization. Each VHP web server potentially handles hundreds of web sites, with access to only a single type of application server, database, shopping cart, blog, web mail or message board forums software suite. Customization usually occurs through a standard web GUI interface which is usually geared towards altering the work flow features of the software and not its overall performance. Support is usually only given through instant messaging.

For a simple website with the aim of providing supplemental information to newspaper or web advertising then basic virtual hosting services, which start at about $10 per month, should be sufficient. The cost advantage of this service declines as you require additional high end services or customization. The challenge is to determine the point at which do-it-yourself self-hosting becomes more attractive than using a VHP.

If you decide to migrate to self-hosting, the next challenge is to determine the daily tasks you will need to do yourself and those you intend to outsource to third party service providers. You will constantly find yourself adjusting these responsibilities for a variety of reasons and you may even have to consider migrating your Web site between physical locations to achieve these goals.

Always remember that the decision to migrate your Web site should be strictly based on business needs. Embark on it when your service provider threatens the future growth of your company. Plan well, only use proven stable technologies, go slowly, have a backup plan, inform your customers and minimize your exposure to downtime risk at every step of the way.

This chapter will describe a number of scenarios in which physically migrating a Web site can become desirable and will cover ways of determining a financial justification for doing so. The rest of the book will cover the logistical problems of data center selection and preparation, planning, the migration itself, testing and post migration procedures.

When to Migrate From Virtual Hosting

The lack of support for customization is the VHP's greatest weakness. There are many cases in which this can become painfully obvious. Here are some typical examples:

  1. Expensive Shopping Carts: Sometimes you want visitors to be able to search your website for a list of available products by name, by category, in a particular price range or from a specific manufacturer. This requires web pages to be generated dynamically using application server software that queries a database. This can cost about $100 per month, and if you need the person to buy the product using a shopping cart, then the price can reach as much as $150 for an entry level service. In comparison, you can lease a dedicated server for $200 per month in a collocation data center and if you choose to use Linux, your software procurement costs would be negligible. Self hosting in this scenario can become desirable if you already have a capable IT staff with sufficient resources to complete the project within your budget and on time.
  2. Unpredictable Software Updates: With virtual hosting you are dependent on your service provider to provide software updates or patches to fix security, performance or functionality problems. There may be delays in completing your requests especially if you are one of many customers on a server. The service provider also has to ensure that the upgrade won’t affect any of the other websites and this can add delays. Additionally, there may be times when you need to implement software that needs to be installed external to your home directory that isn't supported by your hosting provider. Examples of this include a new database product and centrally managed server logins using LDAP. In these cases the justification for self-hosting becomes even stronger.
  3. Server Overload: With hundreds of websites on a server, you run the risk of slow response times due to one of the URLs owned by another company suddenly becoming popular. The cause of this latency is often difficult to determine, and correct especially in a shared environment where you don't have access to many systems tools.
  4. Lack of Redundancy: Many businesses rely on a web presence for the majority of their revenues and cannot afford to have extended periods of downtime. With the use of load balancing devices it is possible to spread your web hits across two or more servers. The load balancer regularly probes your servers and automatically steers traffic away from any server that appears to be malfunctioning or down. This is a useful offering if you need to take an application offline for maintenance. Many virtual hosting providers don't offer such a service to individual customers.
  5. Inflexible Security Services: You may want your applications to run on unique TCP/IP ports and be accessible only to certain IP address ranges or you may want communications with these ranges to be fully encrypted over a virtual private network (VPN). This will usually require some form of VPN or firewall service that your provider may not offer. This requirement may open a vulnerability to other web sites. For example, allowing FTP access to the virtual server potentially opens the door to unrestricted file transfers to all sites on the server that share the same IP address. This may be viewed as a security risk for your neighbors. If you don’t want to risk this type of exposure, then consider self-hosting.
  6. Restricted Supplier Management: You may require highly customized reporting or have complicated inventory listings which have to track parts, sub assemblies and finished products. There may be the need to link your shopping cart order entry system, which contains all your customers' credit card information, with the inventory system of a supplier. Your virtual hosting provider may be able to do this, but it may expose more of your business to this provider thereby increasing your risk.
  7. Poor Site Availability: All service providers need to schedule maintenance of their servers, but the time they choose may be inconvenient to you. They may also have unreliable equipment that adversely affects your site's performance and may not have adequate backups of your data in the event of catastrophic failure.
  8. Insufficient Language Capabilities: VHPs often provide technical support in only a few languages. If you can't get adequate support for billing, engineering, and customer care services in your preferred language, then an in house solution may be better. There are many other scenarios in which a VHP may become undesirable but these examples have provided some of the main ones you will most likely face.

The next section discusses how migrating existing self-hosted Web site can have very different issues than those associated with migrating from a VHP.

When to Migrate Between Data Centers

The decision to migrate an existing self-hosted site to a new physical location often has very different criteria than those associated with migrating from a VHP. This is because the desire for improved services extends beyond an individual server and encompasses the entire data center facility. Here are some common reasons for considering this option whether the facility is owned by your company or provided by a third party.

  1. Poor Cooling: As a data center becomes increasingly occupied the thermal load it needs to handle becomes greater. Your service provider may not have adequate computer room air-conditioning (CRAC) units to cool the entire floor space and may be unwilling to upgrade due to financial constraints such as a lack of funding or an anticipated inadequate return on investment. There may also be cases in which your section of the floor just has poor circulation and other better ventilated locations within the facility are too small or geographically fragmented to comfortably accommodate your servers.
  2. Unstable Power: This can cover a variety of factors from fluctuating voltage, insufficient UPS backup, ignored preventative maintenance, insufficient circuits in your server area and non-redundant power feeds to your server area. In all these cases, both the status quo and upgrades of the service could threaten the reliability of your electricity supply.
  3. Insufficient Power: As servers become smaller and more powerful their demand for power can become enormous. It is now possible to install up to 80 servers in a standard 19" x 72" x 36" rack with a power load of over 20 kilowatts, that's as much as 20 microwave ovens running 24x7.
  4. Unsuitable Physical Security: You may feel that this is limited to access to your server area, but it should also include accurate entrance logs whether they be manual or electronic, video recording of physical access to your area, the use of unique keys for all cabinets and customers, and the deployment of suitable fire detection and suppression equipment. You may want to consider migrating if any of these factors don't meet your requirements.
  5. Inadequate Floor Space: The most obvious shortcoming is a lack of floor space but people often forget that, in a data center owned by the business itself, floor space used for servers could be better used for other purposes. For example, a server room located in a downtown office where rents are high may be more cheaply located in an industrial area nearby.
  6. Unreliable Data Networks: The data center you use may have a number of connectivity shortcomings. The internet service providers (ISPs) used may be unreliable, the networking gear could be poorly maintained or over-utilized, staff could be inadequately trained increasing the risk of human error, cabling work could be sloppy, maintenance work that could cause outages may be unannounced or fall outside your desired time frame, and the equipment used my be obsolete making it unable to provide desired features that could improve your site's performance.
  7. Using a New ISP: Sometimes the Internet IP addresses your site uses came bundled with the data circuit provided by your ISP. If you are forced to use a new ISP, you may be forced to change your addresses. This can be a complicated problem which will require many of the steps used in a physical relocation. It is for this reason that some IT managers may use the opportunity to consider a complete re-evaluation of the data center strategy which may include a migration of servers to a more suitable data center.
  8. High Cost: If your data center meets all your needs and yet costs more than a comparable facility nearby, then it may be time to consider your alternatives such as negotiating better monthly rates from your existing provider or simply go to the competition.

Be especially careful if the unsuitable data center is your own. Though the cost of making improvements to your data center may be much greater than the cost of moving the servers to a data center owned by a third party, the recurring costs there could be more than the ones you currently incur.

Factors That Affect Virtual and Self-Hosting

There are some relocation needs that affect companies that do either virtual or self-hosting.

  1. Data Center Consolidation: Companies often inherit data centers when they purchase other companies. Servers and Web sites can be repurposed or retired to reduce overhead costs and management complexity. Sometimes data center space can be used more productively for another purpose.
  2. Disaster Recovery: A disaster can debilitate your company especially if all your IT resources are in a single location. Catastrophes can be caused by huge events such as hurricanes, floods, snow storms, and earthquakes, or they can be more localized in cases such as hazardous spills and lightening strikes. Even the simplest things can have a huge impact. Leaking water pipes in floors above your data centers, faulty fire alarms that force complete building evacuations, employee sabotage triggered by layoffs, and overloaded circuit breakers can all contribute to downtime that could be avoided by having a failover data center.
  3. Changing Customer Demands: Increased competition and the opening of new markets can shift the demographics of your customer base. This may require the use of additional IT tools that are more efficient, less costly, have better performance or have more features. Your existing facilities may not be able to accommodate these increased demands and you may find yourself having to expand beyond your existing boundaries.
  4. Cost Reduction: New technologies and business processes can reduce many IT recurring expenses but can also require relocation of your servers. For example it may be possible to outsource some back office operations such as monitoring, backups and networking services more cheaply in another facility. Also, as mentioned before, some overhead costs can be lowered by reducing the number of data centers or servers you operate.
  5. Failed Outsourcing: Your IT business partners may fail to meet your disaster recovery, performance and cost expectations forcing you to seek alternatives such as new outsourcing providers or to take the work in-house where you have more control.
  6. Obsolescence: Outdated facilities can increase your recurring maintenance costs but they can also not meet industry standards or government regulations. In such cases relocation may be cheaper than upgrading.

The reasons for relocating can be complex and should be approached carefully. The cost justification, and risk analysis for doing so can be difficult to quantify. This will be addressed in the sections to follow.

How to Analyze Migration Costs

If you decide to do self-hosting, you should also consider its consumption of your business resources, namely time, talent and money. The financial cost of the equipment is obvious, but there are resource costs related to installation, training, staff shortages, consulting, security and long term maintenance. With an existing IT staff, the strain would be less but if the company is small the price of customization could be a high proportion of your business overhead expenses thereby making self-hosting uneconomical.

If you are a small company with limited IT staff, or you have capable staff that would be better utilized expanding the business, then it may be best to adjust your requirements to fit the services offered by a virtual hosting provider. You can reconsider self-hosting in future when the customization needs of the company are more pressing. At this time create a pilot project using only the most essential customization and if successful, gradually migrate over to a production version of the pilot site. Convert your pilot to a general testing and staging area and then add modifications to the production site when you are satisfied they work.

Sometimes businesses should accept the fact that self-hosting, though desirable, may be beyond the budget and capabilities of their organizations. Switching to a more expensive fully managed hosting provider that specializes in customizations may have to be considered in such a case.

Migration cost analysis should focus on three broad areas; the potential for increased profits, expected reductions in monthly expenses and the capital outlay to carry out the migration. These are covered next.

Potential Increased Profits

Most businesses try to forecast their profit growth. As part of these plans they purchase software that can facilitate expansion into new markets or save costs and they may even consider testing the limits of existing IT resources to achieve these goals. Sometimes the driving force to invest in IT isn't profit growth, but guaranteed revenue. Calculating the potential lost profits by not investing in information systems can also be a deciding factor. This can sometimes easily be calculated by determining the impact per hour of downtime on sales and the expected amount of downtime during the financial year due to inadequate resources. Once you have this information it becomes easier to calculate the expected return on the IT investment in terms of increased profits or liberated cash flow.

Net Changes in Monthly Expenses

Net expense reductions can be calculated as the eliminated monthly costs that stem from the migration subtracted from the forecasted monthly expenses in the new facility. Recurring expenses to consider in both the new and old facilities should include the following:

  1. Maintenance Contracts: Most people primarily think of computer equipment maintenance but if you manage your own server room there will be many other maintenance figures to consider. The upkeep of CRAC units, security systems, UPSs, standby generator plants and fire systems as well as the retention of janitorial and security guard services may need to be included. You may also have to consider additional IT services such as networking, DNS and database services.
  2. Power: Electrical costs in your own server room may be directly tied to actual consumption, but third party data centers usually charge for power by the number of circuit breakers and/or power outlets you decide to use.
  3. Cooling: As power consumption increases so do your cooling requirements. Many third party data centers include the cooling cost into their power charges unless your installation requires major expansion of their facilities. In this case you may be expected to either directly contribute to the expansion or commit to a long term contract.
  4. Floor Space: In your own server room this is a fairly straightforward cost. With a data center provider you may be offered floor space as a full computer cabinet or only part of it. In some cases you may be offered an existing caged area which may not exactly meet your needs or you may have to sign a long term contract before the facility will agree to creating a custom space for you.
  5. Bandwidth: When you convert to self-hosting the cost of your Internet connection will most likely become more variable in nature as it will fluctuate with the amount of bandwidth you use each month. Appendix II discusses many of the factors in selecting a data center ISP in more detail.
  6. Staffing: Self-hosting will inevitably require additional staffing resources. You may have to hire additional employees, either as staff or contractors, or you may have to train existing staff members continuously and raise their salaries to match their new skill set. In the event of data center consolidation you may have less staffing needs too.
  7. Security: Physical security expenses will largely be covered under various security system maintenance contracts and the hiring of security guards. If you are using a third party data center, then this may be included in your floor space expenses. Data security is similar. This may be provided as a contractual service or handled by yourself; it may also be included in one or more maintenance contracts. Your budgeting should include the monthly cost of backup services, replacement tapes or other media, off site storage, software update and anti-virus services, and firewall and intrusion detection services.
  8. Travel Time: It may seem trivial, but always try to determine the cost of commuting to your new server location. Most website maintenance can be handled remotely, but when things go wrong or you have new physical installation work to do the cost of travel delays can become significant. You may decide on a cheap data center located an hour away by car but if a device begins to intermittently fail, sometimes during rush hour, the duration of outages can jump dramatically and so will the cost of lost revenue.
  9. Equipment Leasing: Migrating to a new facility may also require leasing additional hardware to accommodate the move. Some data center providers will also throw in equipment leases at favorable rates to get your business but they won't allow you to leave with the equipment should you decide to go to a competitor. It may also be a good time to renegotiate the replacement of existing obsolete equipment with newer models. This could affect your operational costs at the new location and should be factored into your calculations.
  10. Systems Development: In a virtual hosting environment the software used to make the management of your site easy is rolled into the cost of the service. With self-hosting this could become an additional expense as you may have to begin a continuing project to provide the same features to your internal users.
With the management of your website more firmly within your control you may also find yourself having to integrate its operation more closely with other business systems within the organization. This could add additional hidden expenses to the project. Always try to separate the migration savings from the additional expenses of this type of work. It is easy for a profitable change of web service providers to be weighted down by the allocation of expenses not directly related to the activity.

Subtracting the net change in monthly expenses from your profit projections will provide an overall expected monthly cash flow from the project. This then can be used to justify the one time capital outlays required to get the job started.

Capital Outlays

There are a number of one time costs that will be encountered at the beginning of the migration that you will have to account for. These include the following:

  1. Leasehold Improvements: You may have install the infrastructure to support your web site being moved to the new location if you don't have it already or if it's not supplied by your new hosting facility. This could include additional power, cooling, fire systems, backup systems, UPSs, computer cabinets, racks and shelving, fencing, patch panel cabling, standby generator plants, cameras, keyless entry systems and raised flooring to name a few.
  2. Transportation: The cost of physically moving should also be included. You could use a professional moving firm or you could rent a truck. In the latter case you may also have to rent secured shelving, on which the computer equipment will be placed, and mount it in the truck. You may also be forced to rent or buy boxes in which to transport your equipment and other miscellaneous items.
  3. Overtime: Most web site migrations are usually done after business hours at night and on weekends which may require the payment of shift premiums or additional vacation time to compensate your employees for the inconvenience of the working on the project.
  4. Staffing: In the event of data center consolidation you may be faced with increased staff costs due to layoffs or rapid attrition which may demand unexpected re-hiring costs. Relocation or expansion activities will also increase staffing costs due to the need for increased numbers of employees.
  5. Contractor Fees: Contractors may not just be used to install leasehold improvements but they could provide services specifically for the move. These could include project management and data migration and recovery skills your organization may not already have.
  6. Training: This is a frequently over looked expense that is often rolled into monthly costs, but you may require your staff to get several foundation training courses to allow them to handle the new tasks they will be expected to achieve. Some people will treat it as a recurring expense, others may want to account for it as part of the moving cost.
  7. Equipment Acquisition and Temporary Leases: If you are moving between data center providers you may be faced with incompatible equipment at the new location. For example, the data backup formats used at the old and new facilities may be different forcing you to lease a tape backup unit just in case you have to restore data in the event of a server failure during the migration.
You may also be forced to use new servers which may add unexpected problems. The software you currently use may be incompatible with newer technologies or you may not have any remaining staff that knows how to reinstall your existing software on the new hardware. This could force you to purchase brand new versions of the software before you can proceed.
  1. Cleanup Costs: You may have to restore the original server area to its original condition. This could require the removal of racks, cabinets, raised flooring, power feeds and networking gear. You may have to get professional cleaning help not just from janitorial services, but also from technical professionals who are capable of decommissioning IT infrastructure.
  2. Penalty Fees: Some contracts have early termination fees and these may apply to some of your IT infrastructure. Be aware of the cost and plan your migration to possibly limit the extent of your obligations.
  3. Movers Insurance: You may have to insure some of your equipment against damage that could occur during the relocation. This may add further delays and costs.

Once you have an idea of the capital investment required for the migration, you can compare it with the expected returns in the form of monthly savings or increased profitability. If the return on investment is better than the interest you can get at a bank, then the project is probably worthwhile. Even if the project has marginal profitability, it may be justifiable on the basis of making your company more responsive to market pressures especially if you are moving from a VHP.

This type of financial analysis is often ignored and yet it is so important in making a reasonable decision to switch service providers. The extra time it takes to do it could save your company thousands of dollars in the long run.


The decision to migrate your Web site can be difficult. You have to weigh the benefits of increased control, improved flexibility and reduced costs with that less complicated management and technical skill requirements. Whatever you choose to do, plan carefully. Always get a professional opinion, even if it's informal, and always be aware of the potential risks of the decision you make. If you decide to do it, Chapter 2, "Data Center Relocation - Preparation", will provide a lot of guidance in completing a successful project.